Bitcoin Transactions To Double By 2017 - Essay Example

Studies suggest that volume of bitcoin transactions will double by the year 2017.

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A recent report by Juniper Research indicates that by 2017, the numbers of altcoin and bitcoin transactions will more than double.

The volume was 18 million in 2013 and 24.7 million in 2014 but they suggest that it will reach 56 million in the next 2 years.

This finding is a part of the market intelligence firm’s new report. The report focuses on the value and volume of transactions in the crypto currency markets.

Juniper’s head of consultancy and forecasting, Dr. Windsor Holden, still suggested that the people who read the report should criticize its positive conclusion.

He believes it is unlikely that bitcoin will gain significant transaction as a method of payment. Holden more specifically stated that transaction volumes will not rise at a rate that would be on par with a technology gaining mass adoption.

Holden said in an interview, “I think the challenges are so great that bitcoin will struggle as an actual payment mechanism. It will struggle to go over a fairly core audience who are the very techy and the libertarians, and those who partake in nefarious activities.”

However, he sees potential for the digital currency to help the payments ecosystem improve. He talked about Ripple Labs’ decentralized payment system, which uses a native currency for settlement. He thinks the payment system could become an integral part of the financial infrastructure.

The research findings are part of an annual report by Juniper on the digital currency industry. Juniper used public data to determine the value and volume of bitcoin, auroracoin, litecoin and dogecoin on a month-over-month basis for 2014.

Holden suggested that the total value of bitcoin and altcoin might continue to decline while the volumes might rise. Holden said that increase in volume will not be enough to prevent the decline in value.

Holden projected a reasonable increase in transaction volumes for this year but also noted that most of the activities are taking place on exchanges. So, they are not linked to spending.

He also warned readers that the total bitcoin user base is smaller than advertised. He added, “When you look at the actual number of wallets and people who regularly make transactions, rather than just store half a bitcoin, you’re talking about a couple million max.”

He also tried to dismiss the idea that merchant adoption would increase consumer use and said, “It doesn’t necessarily follow that the more retailers that deploy it, the more people will use it.”

While explaining, Holden compared bitcoin with Near-Field Communication (NFC), another relatively new payment method, and talked about changing consumer behavior.

He said, “I’ve argued that the issues facing NFC are nothing compared to the difficulties facing bitcoin from a trust and customer perception.”

When discussing the difficulties he talked about the recent scam in the bitcoin industry involving Hong Kong based exchange MyCoin.