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Five Million Bitcoin Users By 2020 a Clear Possibility

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March 18, 2015

Five Million Bitcoin Users By 2020 a Clear Possibility

By Steve Anderson
Contributing TMCnet Writer

The idea of making money by doing math is likely one of those things that teachers would love to tell hesitant students about, but in a sense, that's what happens daily with Bitcoin. A new report from Juniper Research (News - Alert) suggests that this cryptocurrency may be poised to have plenty of new users on hand. And while the numbers may sound high, it's likely to prove a niche enterprise.

The Juniper Research report, titled “The Future of Cryptocurrency: Bitcoin & Altcoin Impact & Opportunities 2015-2019”, suggests that by the end of 2019, active Bitcoin users worldwide should reach around 4.7 million total users. That's a good thing in some respects, as the total number was just over 1.3 million in 2014 alone. But the report proved somewhat double-edged, noting that retail activity in the Bitcoin field was likely to remain “extremely low.” This was somewhat mitigated by reports of big gains, as daily transaction volumes have increased by about 50 percent since March of 2014, but these big gains still represent big gains in small numbers.

What's more, there are likely to be issues on the supply side of Bitcoin that hamper its ability to gain going forward. Early speculators are said to be hoarding substantial quantities of Bitcoin, and a combination of rising electricity costs and lower Bitcoin yields from standard mining methods may hurt profitability in the long term—Bitcoins are mined via the completion of complex equations, and the more Bitcoins mined, the more complex the equations get.

The remainder of the report showed a mixed bag of good and bad news. While the report hailed the introduction of licensed and regulated exchanges as a potential way to stabilize values and improve the likelihood of retail use, it also noted that the altcoin market was facing troubles of its own from so-called “pump and dump” currencies that were largely used as short-term investment platforms.

Though perhaps the biggest skeptical mark against Bitcoin is that Bitcoin has something of a bad history; criminals have been known to use—and to continue to use—Bitcoin in things like illegal purchases or as a vehicle for money laundering thanks to its largely anonymous nature.

It's not surprising that many don't want to be connected with currency favored by criminals, but by like token, cash is also a currency favored by criminals, and no one thinks twice about carrying a $20 bill around. It would seem that a proper marketing push would go a long way here toward not only getting the attention of the mass user, but also help issues of supply as Bitcoin hoarders would likely find the currency priced attractively enough to divest. Moreover, mining issues would also see some relief as more coins were demanded.

Only time will tell just what kind of market emerges for Bitcoin, but the issues remain. Better awareness and more opportunities to use Bitcoin as more than an investment tool are likely to help drive future use of the cryptocurrency.

Edited by Dominick Sorrentino

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