A lot have been said about Bitcoin since its evolution in 2008 and especially in the past one year as it moves through several phases. Globally, wherein players like Alibaba and Baidu have banned its usage, and American online retailers like Overstock are accepting it as a payment mode.
Verotel, the Internet payment service provider for high-risk merchants, announced that it has started to accept Bitcoin payments with BitPay, the world’s leading merchant processor for virtual currencies.
In India, despite of RBI’s warning against risks associated with the virtual currency, new exchanges like Unocoin in Bangalore and Bitquick, which allows allows users to buy Bitcoin via NEFT, RTGS, or IMPS transfer and cash deposit have been setting up. Also, there has been seen a rise in number of communities such as BuySellBitcoin, CoinMonk, MadOverCoins, Laxmicoin and so on, trying to promote VCs, educate people about the virtual currencies, and facilitate transactions for the same.
Even though, there has been a growth in this space, Bitcoin still dwindles amidst the regulatory confusions and is a point of discussion around its legality in the country. So, how will be the coming year 2014 for bitcoin, here is a list of predictions from Lightspeed Ventures:
1. Startups will attract over USD 100 Mn funding: Both the existing and emerging Bitcoin exchange startups across local/global will attract venture capital. The available funds would thus help the startups to deal with issues such as building exchange liquidity & merchant network, private insurance, security, etc.
2. Mining ‘will not’ be dead: As predicted, the transaction fees will reduce further owing to an increase in mining activity. Whereas Medium enterprises are expected to switch to cloud based mining, large and medium enterprises will invest potential sums in mining farms as early as the end of 2014.
3. Growth of alt-coins apart from Bitcoin will remain uncertain: Of the existing 50+ alt coins, only bitcoin had shown growth potential. In the coming year, less than 5 alt-coins are expected to survive
4. The problem of ‘anonymity’ will get solved: The anonymous nature of bitcoins have been a roadblock till date for governments and financial institutions to participate in transactions. However, in 2014 globally communities are expected to actively work towards making Bitcoin more accepted.
5. Indian ecosystem will be slow to evolve: The bitcoin community in India is small (about 15-20 people), which is trying hard to create awareness among consumers and regulators. In the coming year too, the space will be limited to speculators and mining pools and the Indian market is likely to be served by global Bitcoin companies.
6. The use of Bitcoin will evolve beyond ‘store of value’ or ‘transactions’: The underlying Bitcoin protocol makes itself applicable beyond the use cases of ‘store of value’ and ‘payments’. As one can see from the current Bitcoin ecosystem map (http://bit.ly/1krEd0Z) that there are almost no start-ups, which solely use the protocol without using the ‘coin’ or the ‘currency’ as a function. 2014 will be the first year to see some of these.
7. The ‘browser’ of Bitcoin will come this year: Netscape browser made Internet happen. ‘Something’ will make Bitcoin happen. This will make the transition to Bitcoins frictionless. Kryptokit and Eric Voorhees’ Coinapult are promising start-ups in this direction. Encouragingly, all the building blocks for that to happen – like mobile penetration, cryptography algos etc are already in place.
8. The price of Bitcoin is likely to range between $4000-5000 by the end of 2014: Bitcoin’s price is a function of supply and demand. While the supply is predictive, the demand is less so. The increase in the demand of Bitcoin can be compared to networks such as Facebook and Twitter, which have followed a ‘S’ curve of adoption. Given the nature of the ‘S’ curve, the price increase in 2014 is likely to be 3-4 times more than the one this year. Thus, it can be predicted that Bitcoin will settle down for a price rage of USD 4000-USD 5000 in year 2014.
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