The article is about:
- The first wave bitcoin
- Long-term trend
- Fundamental cost
- Forecast of bitcoin
The first wave bitcoin
What will bitcoin be worth in 10 years? Since his birth in 2008, Bitcoin has seen a lot. At the end of 2009 for $ 1 it was possible to purchase several hundred cryptographic coins. And recently the Bitcoin took off almost to $ 4500, one “digital coin” became 3.5 times more expensive than the troy ounce of gold. A hundred dollars invested in 2010, today would have turned into several million. But how long can the crypto currency grow?
In all of history, Bitcoin tripled in price due to a sharp increase in demand.
The first wave occurred in early 2013 – the time of the banking crisis in Cyprus, when financial institutions temporarily stopped work, electronic transfers were not made, and there were no cash in ATMs. Because of the paralysis of the financial system, the authorities of the country have withdrawn part of the bank deposits. This could spur interest in Bitcoin, which was not controlled by the authorities.
Later in 2013, Bitcoin again accelerated growth due to demand from China. His rate on some Chinese exchanges was several times higher than outside the country. Crypto-currency attracted the growing middle class because of the lack of alternatives, Guillaume Babin-Trumbley, executive director of the Bitcoin Embassy in Canada, believes.
“It is very difficult for Chinese people to invest abroad. They have a bubble in the real estate market, a bubble in the stock market, and one of the highest savings rates, “Forbes quoted Babin-Trebleley as saying.
As a result of another rush in November 2013, the Bitcoin rate for the first time exceeded $ 1000, but went down to decline after the Central Bank of China banned financial institutions from conducting operations with the crypto currency.
In total, from the beginning of 2013 to the highs of the year, the Bitcoin rate has increased more than 80 times.
The third time Bitcoin took off in price after in March 2017 the Central Bank of Japan recognized the crypto currency as legal means of payment, and in May, the rating agency Moody’s downgraded China’s credit rating, for the first time since 1989.
If you do not take into account three peaks, the Bitcoin graph is a parabolic curve (the red line in the previous graph). This is largely due to the limited supply of Bitcoin. The code of the crypto currency limits its emission – in total 21 million coins can be issued. And the number of new “digital coins” is halved every 4 years.
As of January 1, 2017, 76.6% of the possible volume of Bitcoin was produced, as of August 1 – 78.1%. According to calculations, the maximum amount of crypto currency will be reached in 2033.
Demand for crypto currency remains high. Bitcoin is increasingly distributed among ordinary people and is used in business.
On the map, the countries that authorized Bitcoin to be legalized are marked green, the countries where they are discussing this issue are colored yellow, countries that are opponents of the crypto currency.
Quotations of Bitcoin are certainly subject to the influence of emotions. However, the cost of crypto currency can also be estimated in the framework of the classical economy. In a simplified model, the minimum price of a single Bitcoin should be equal to the cost of electricity required to produce it.
Everything is arranged as follows. Approximately every 10 minutes. in the world is extracted through the so-called “mining” of 25 “coins” Bitcoin. They are divided proportionally to the conducted computing operations. At the same time, each “miner” is interested in increasing the computing power of its equipment in order to increase earnings. But with the growth of market participants, the share of each in profits is reduced. In general, the extraction process makes sense to continue until the costs exceed the profit.
As the total capacity of the system increases, so does the cost of electricity required for the production of one Bitcoin.
We can assume that, other things being equal, Bitcoin will rise in price in the long term, despite possible periodic recessions. In 10 years the cost of one “coin”, according to various estimates, can reach $ 100 thousand or $ 131.6 thousand, or even more.
However, you should be careful and take risks into account. After the unexpected separation of Bitcoin, no one can be sure that this will not happen again. Some experts even believe that the Bitcoin code can be hacked. Then its value will drop to zero.
Bitcoins are virtual money, they can be transferred from a purse to a purse.
The system does not have a center, each bitcoin-wallet stores copies of the database of all transactions. Each new “block” with the data is “attached” to the previous one using complex algorithms. The system is securely encrypted for changes, but everyone can view its contents.
At the heart of bitcoin and other crypto currency is the block database, a distributed database that contains information about all transactions conducted by system participants.
Forecast of bitcoin
Bitcoin has been buried 130 times since its appearance. The first “obituary” appeared in 2010, when the crypto currency was only 23 cents. However, bitcoin did not die, but, on the contrary, became the most famous crypto currency in the world. His supporters say that bitcoin (and some other crypto-currencies, for example, the etherium) is just gaining momentum and “will stay with us for a long time”.
It is unlikely that analysts will be able to formulate an accurate forecast of the bitcoin rate for the next five years. But almost all of them believe that in the shortest year. This will contribute to various factors: internal and external. These include the development of the platform itself, the availability of competitors, partner services, and the relevance of mining.
In total, 21 million bitcoins are in circulation. If the usual money is issued from time to time, then this emission of this crypto currency has occurred only once. The statistics are as follows:
- 16 million bitcoins have already been mined.
- 5 million still subject to mining.
The subsequent emission is not provided, therefore the volume does not change in any way.
What happens when all the bitcoins are mined? In fact, the above statistics can be traced in many official sources, but it is false. The bitcoins really amount to 21 million, but this figure is just an approximate forecast. As such, the original issue was not.
This digital decentralized currency is not produced by anyone. It is formed by itself each time a new block with its hash is created. The task of the miner is to create such a block and get a reward for it. It is measured in bitcoins, and the size depends on the total number of blocks obtained earlier. For example, earlier the amount of remuneration was 50 bitcoins, in 2016 – 25.
It is predicted that in 4 years it will be halved – up to 12.5 digital coins. But here lies the biggest catch. The number of miners only increases, and, therefore, the extraction is much faster. Blocks are formed much faster, so the revision of the reward can occur much earlier. Forecast of the bitcoine course depends on emission.
According to forecasts, as early as 2018 it will be the same 12.5 bitcoins. How will this affect the course? It will only increase. Such activity the user and the desire to engage in further mining speaks about the demand for crypto currency. If there is a demand for it, and the number of bitcoins is limited, then the price of the coin will grow.
Emission occurs additionally, that is, by itself – with each successfully composed block. Most likely, until 2030 the issue will stabilize. Mining may lose its popularity, coins will cash in and actively use. For reference: the initial amount of issued bitcoins was only 50 digital coins, and not 21 million.
What will bitcoin be worth in 10 years? In a world that is becoming more digital and virtual every day, bitcoin has become the first currency to guarantee the owner its safety. There is no threat of default or cancellation without the owner’s knowledge. Let’s imagine that a billion people in developed countries will buy bitcoin for a thousand dollars for the safety of their own funds. Then the cost of one bitcoin will be 47.6 thousand dollars. And given that access to most of the coins has already been lost, bitcoin could well cost a hundred thousand dollars.