Stakeholdersmake Bitcoin what it is today as ultimately, they have the best interest athart for cryptocurrency. Miners arestakeholders in Bitcoin, as without miners who write the history of Bitcoin therewould be little availability of bitcoins, miners earn a transaction fee forprocessing transactions. In the early days of Bitcoin, miners were mainlyhobbyists using personal computers to solve relatively simple cryptographicproblems. Now, miners are raising investor dollars to construct server farmsoptimised for bitcoin mining, the electricity use of Bitcoins are very high andso this is not sustainable.
The future of Bitcoin might be faced with achallenge of mining Bitcoins in a more environmentally friendly way. Coredevelopers are voluntarily maintaining the Bitcoin protocol and keeping it bugfree, ultimately righting the rule book. In the future with high number of useand transaction, core developers might find it a challenge to keep Bitcoin bugfree.
Governments areworried about cryptocurrencies disturbing the industry.With fiat currencies being in a position to be manipulated by Centralgovernments. In order for Bitcoin to be adopted bythe mainstream, it might have to have a turnaround strategy in order to keepstakeholders interested (figure 3.0). Investorshave the biggest stake in Bitcoin as without them there would not be such ahigh demand for Bitcoins, users are able to push the price up or down and sodetermining whether Bitcoin has any value or not.
In the future, the Stakeholders of Bitcoin might changerapidly. If government was to regulate transactions then Bitcoin would lose itscore values of being decentralised and ultimately its users, resulting in losingits value and the price dropping (figure 3.1). However, it could also resultand encourage in more investors to use and trade Bitcoins as the governmentbody is thought to be safer. Governmentscan regulate the price of assets, such as fiat currencies, through buying andselling actions in international markets. Secondly, they can tamp downexcessive enthusiasm for an asset class by saddling it with regulations thatincrease the cost of doing business.
Governments can also make the asset scarceby imposing controls on it. An example of this is the case of gold, which hasimport restrictions in several countries. All three types of actions have the potentialto fail in the case of Bitcoin and cryptocurrencies. This is becausecryptocurrencies are extra-national and have decentralised ledgers that arespread across multiple countries. Their regulation will require awell-coordinated effort across several economies.
This might be a difficulttask, given varying levels of interest in cryptocurrencies and their impact onnational economies in different places. Paymentservices are also stakeholders as they are the ones that really handle thetransactions. So, they drive the primary demand. And merchants, customers andinvestors will just follow them. Untiland unless buyers keep asking Merchant to accept Bitcoins, merchants will beoblivious to the demand. If big merchants started taking Bitcoins then possiblyother merchants would follow, rising the demand of Bitcoins and possiblyputting fiat currencies under pressure. Bitcoinfoundation provides Bitcoin with power.
The purpose for this foundation is topay the core developers, allowing themto work full time to develop the software. It also has connections with USgovernment, if a problem occurs the foundation is the only entity to beacknowledged by the government. There are many members of the communitywho thinks that Bitcoin doesn’t need any authority that speaks withgovernments. This is because they think that Bitcoin should operate outside andapart from traditional national governments and would be going against its corecompetencies of being unregulated. Without a stable value Bitcoin cannot trulybe a currency. Rather it is a commodity asset that one trades, like gold orsilver, in hopes that its value will rise and yield a trading profit. There isnothing wrong with speculation; the actions of speculators help to add marketliquidity and to determine the market value of assets. Looking atthe current stakeholders and the future stakeholders, it is very hard topredict where Bitcoin might be in the future, because it is all about adaptationand what stakeholders want in the market and what they deem to bevaluable.
Bitcoin will not necessarilydisappear and Bitcoin cash will not eventually take over, however moreinnovation could result in Bitcoin dying, and being replaced with new andimproved cryptocurrency. Bitcoin is simply a 21st centuryversion of gold, only without the storage issues. Some believe it is just ashort-lived popular fad that may soon evolve into something quite different. Ibelieve only time will tell the future of Bitcoin, as the only certainty is thevolatile price.