Bitcoin will see major developments in 2016

In 2015, the blockchain, the underlying technology of Bitcoin, attracted the attention of many financial institutions. The potential of blockchain to transform the financial industry has been recognized. And industry insiders believe that the importance of Bitcoin itself will also be recognized again. "

Introduction: According to an article published in the online version of Wired magazine, in 2015, the underlying technology of Bitcoin, blockchain, attracted the attention of many financial institutions. The potential of blockchain to transform the financial industry has been recognized. Industry insiders believe that the importance of Bitcoin itself will also be recognized again, and 2016 will be the year for the development and growth of Bitcoin.

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Bitcoin was once thought to change the world, but then failed to do so. Now, the virtual currency has a new opportunity.

You've probably heard it before. In 2013, everyone thought Bitcoin was the next big thing. Then Mt.Gox, the world's largest Bitcoin exchange at the time, went bankrupt. Everyone thought Bitcoin was dead. Commentators are usually more absolute than the truth. Despite the failures of sites like Mt.Gox and Silk Road, digital currencies never died. Now, Bitcoin is booming again. Some industry insiders think this will be the year Bitcoin goes mainstream.

Bitcoin is not a currency controlled by a central government, but is distributed among independent computer networks around the world. Regulatory barriers have slowed the development of Bitcoin, especially in the United States. However, such problems are being alleviated, and New York State regulators have become a pioneer. The most important point is that Bitcoin provides a cheap and easy way to help people transfer funds, especially when they need to transfer money across countries or retailers accept online payments.

The price of Bitcoin is currently $434, far lower than the $1,216 at the end of 2013. But what really matters is not the price, but whether people use Bitcoin and whether the frequency of use is increasing. The latest data shows that daily Bitcoin-based transactions are increasing, and the frequency of use is setting a historical record. In December last year, the average daily number of transactions more than doubled year-on-year.

But a lot of "usage" is just speculation, as holders believe the price of bitcoin will rise. Bitcoin observer Tim Swanson explained that many transactions are just users transferring their bitcoins from one place to another. But according to Coin Base, the world's largest bitcoin exchange, about 20% of the activity on its network is used for payments, or as a currency. Coin Base operates 2.8 million bitcoin wallets worldwide and helps major retailers such as Dell and Overstock process bitcoin payments.

Bitcoin has received more attention in recent months because its underlying blockchain technology could revolutionize the trading of stocks and other financial securities. A blockchain is a database that runs on a large number of independent computers. In the case of Bitcoin, blockchain technology monitors the transfer of funds. But in reality, the technology can monitor the trading of any valuable asset, such as stocks, bonds, futures, and even real estate and vehicles. Many companies, including Nasdaq and Overstock, are developing new systems to use blockchain in this way. However, this does not rule out the possibility of using Bitcoin as a currency.

Last September, several companies in the financial and banking industries invested in Bitcoin startup Chain. Companies involved in the investment include Nasdaq, Citi Ventures, Capital One Financial and Visa . Chain CEO Adam Ludwin said that all of the company's investors are its business customers or potential business customers. In other words, Chain may help them develop Bitcoin technology. Companies like Nasdaq believe that Bitcoin is a way to trade stocks and other financial securities. However, Ludwin said that his investors are also very optimistic about the prospects of Bitcoin as a currency.

“The technology that we are developing and that most of our partners are working with is blockchain,” he said. “It’s a technology that can distribute many different types of assets. You’re going to see networks that can handle not only currency transactions, but other types of financial instruments.”

Chain isn’t the only company doing this. For example, Coinbase just launched the first Bitcoin debit card in the U.S. This will help Bitcoin go mainstream in a new way. The company said that more than 7,500 people have applied for the card since it was launched in late November. Through the debit card, they have spent more than $50,000 in Bitcoin.

It's not a huge number, but the important point is that any place that accepts Visa will accept Coinbase cards. Coinbase hopes that this will encourage people to spend more on Bitcoin, rather than just speculate on it. If this is achieved, more merchants will start accepting Bitcoin. Relatively speaking, the transaction fee for using Bitcoin is much lower. And if more merchants participate, a virtuous circle will be formed.

Adam White of Coinbase noted that in 2015, blockchain technology broke through the limitations of digital currencies. Many observers believe this is a "major turning point" for Bitcoin, which is transitioning from an online currency. However, White pointed out that 2016 will be the year when the outside world realizes that digital currencies can still change the world.

He said: "We will return to Bitcoin. In 2015, many financial institutions, banks and opinion leaders said, 'It's not about Bitcoin, it's about blockchain.' But this is not true." (Viking)