Note: This article is translated from Chinese (Chinese recognition of BTC).
The reason many investors have reservations about Bitcoin is that it prevents consumers from using the encrypted currency: Bitcoin is not the mainstream. Although Bitcoin is borderless because it is not issued by any government, it has not yet been widely used.
The ongoing developments are likely to soon make Bitcoin the talk of the day. Bitcoin and other encrypted currencies will become mainstream academic research projects in the next decade, but developments suggest that this may happen much earlier.
The dominant use of Bitcoin, the next chapter in the history of money, may create new opportunities for start-ups to develop related products and services during growth, listing and mergers. Moreover, these opportunities will enable individuals to invest in Bitcoin itself as a currency, and the emergence of a mainstream of Bitcoin and other encrypted currencies may transform our dollar-centric society into a diversified payment system. Such changes will have social and economic implications. Investors looking for opportunities will be well on track to drive Bitcoin into the mainstream.
How does bitcoin become mainstream?
This development will focus on three basic areas.
Technology that supports faster and cheaper transactions
The frequent criticism of special currency is the limited scalability of transaction recognition, which limits the speed of payment processing. New technologies are emerging to address this problem, including SegWit protocol upgrades (which use Bitcoin's transmission tool Bitcoin Block Chain) and Lightning Network solutions to make payment confirmation more effective.
Great breakthrough in shortcut performance
With the advent of the Bitcoin wallet, Bitcoin will soon become a convenient tool for consumers to pay with debit cards, credit cards or Apple. With Lightning Network support, these devices have fast performance like Rawtx and Eclair. In a few years, consumers may use this technology as well as mobile phones.
Public investment vehicles
At present, the only way to invest in a variety of venture start-ups to develop Bitcoin applications is to own relevant private equity. Nor does any public exchange invest in Bitcoin as a currency, foreign exchange, rising or falling dollars, pounds, euros, roubles, etc. However, a joint venture is serving bitcoin and other bitcoin functions including transactions.
Bakkt, which owns the New York Stock Exchange and works with Microsoft and Starbucks, will be set up this fall as a subsidiary of the International Exchange (ICE) to create a comprehensive access to Bitcoin for investors, businessmen and consumers. The ICE, which operates the world's two largest commodity futures exchanges, the ICE American Futures Exchange and the ICO European Futures Exchange, has a unique and powerful position in obtaining regulatory approval.
The involvement of the ICE is expected to help clear barriers to regulators'investment in the Bitcoin, and the Exchange Trading Fund (ETF) will facilitate individual investors. The Securities and Exchange Commission of the United States has rejected various applications for approval of Bitcoin ETFs, but well-known companies in the form of ICEs are expected to have a significant impact on such applications. A key reason for this is that Bakkt will be the security custodian of Bitcoin and other encrypted currencies. (After the launch of the Bitcoin ETF, large trading businesses may boost demand for the currency and may push up the value of the currency.)
Another factor that ultimately eases regulatory approvals is that government acceptance of encrypted currencies is growing rapidly. South Korea, Malta and Switzerland passed encryption regulations, prompting the U.S. House of Representatives to hold hearings to learn more about encryption.
Bitcoin has broken the barriers, and Microsoft, Expedia and Intuit accept bitcoin payment. KFC customers in Canada can now pay in bitcoin, and Kodak has announced its own encrypted currency, the Kodak currency. When a chain of fried chicken stores and an established manufacturer went into encryption, it was far from the environment of suspicion and rejection that Bitcoin had experienced since it went public in 2009, and despite undeniable improvements in its credibility, that condemnation continues today.
Just last spring, Warren Buffett severely denounced Bitcoin as "rat poison," a charge he may now reconsider in view of the prestigious status of the serious authority of the ICE. Buffett's New York stock exchange is a tool for Buffett to make profits. Similarly, Jeffrey Shiller, a prominent Yale economist, may now wish to reassess his prediction that Bitcoin will join the garbage heap of failed alternative currencies. Ultimately, society's acceptance of encrypted money will be accompanied by personal style concepts and expressions that depend on what one's purpose is, what this means, and their online identity.
The development of digital money and related technology is changing with each passing day, which not only attracts the attention of technical media, but also attracts more and more attention from finance and even mass media. Mastering these developments is crucial to the formation of knowledge bases involving investment strategies. Eric C. Jansen (CHFC) is the founder, president and chief investment officer of Aspen Cross Wealth Management (AWM), a registered investment consultant based in Westborough, Massachusetts. AWM provides bitcoin and encrypted currency education services for its retail investors and manages several thematic portfolios, focusing on block chain innovation and disruptive technologies.