Buy one out of six types of card packs now! Sign up for Battle Royale with crypto rewards! Buy your .crypto domain now! 8 Reasons to be bullish on bitcoin into 2020 Posted on by Nederob
Bitcoin is moving into 2020 with a general bullish sentiment.When we entered 2019 almost a year ago, bitcoin was having difficult times.The digital currency was worth approximately 3.300 dollars early in the year, but during the year bitcoin broke her downward spiral of doom.It turned out to be one of the best investments of the year.At the same time a lot of things have happened when it comes to development, adoption and government regulations.Looking forward into 2020 there’s enough reason to be bullish about the Bitcoin network and bitcoin as a payment option.Why bitcoin will be strong in 2020 1.
Becoming legal
Afghanistan, Pakistan, Bolivia, Saudi Arabia and Vietnam are among the countries that have labelled bitcoin as illegal.
At the same time Europe, North America, Brazil, Turkey, Australia and many other countries are legalizing it.China has a bit of a complex relationship with bitcoin, while many other countries – including China – have a complex relationship with the most popular cryptocurrency.
Over the year China’s position towards crypto changed, as president Xi Jinping started promoting the use of blockchain technology.At the same time trading bitcoin on cryptocurrency exchanges is still not allowed, even though crypto mining is no longer unfavorable .
Over the summer a Chinese court decided that bitcoin is a virtual property with actual real life value.As a result the law is now protecting bitcoin.
The judge stated that bitcoin is valuable, scarce and disposable.These are the same characteristics as property, and therefore bitcoin can be seen as virtual property.China is currently working on its own national digital currency, which could be positive or negative for the use of bitcoin in the country.The Chinese Central Bank Digital Currency ( CBDC ) is expected to release in 2020.
Even though most of the talk here is about China, similar things are happening around the globe.For example, in the United Kingdom lawmakers have classified digital assets as property .This will make it easier for businesses to start using blockchain tokens.
This doesn’t only have major implications for the smart contract industry, but obviously for bitcoin as well.2.Exposure through national digital currencies
Over the summer it was Facebook who ignited a major discussions among government officials and regulators.Facebook announced its own stable-coin project called Libra, which would be available to its 2.5 billion users worldwide and could be used among its partners including Spotify, Uber, Booking and many others.What followed, was a major backlash for European governments and the United States.Associates of Libra stepped away , and at the same time central banks finally woke up.
Central banks are afraid that they will lose control over the payment system.
The Federal Reserve in the United States and the European Central Bank started talking about their own digital currencies.France and Germany formed a front against Libra, while the call for a digital euro has become stronger over time.Especially German banks have been very vocal on this.At the same time Switzerland already announced their own digital currency, and Sweden and Canada seem to be following the trend as well.
This change will not happen in 2020.ING Bank thinks that within three years most countries have their own digital currency, while IBM thinks that digital currencies can substitute money within 5 years .Deutsche Bank thinks this process of change will take a decade, but it’s definitely happening.
Even though the launch of a national digital currency doesn’t affect bitcoin directly, it does open people up to the concept of digital money.
As digital money is becoming common ground and is recognized as virtual property, bitcoin will see a new influx of users and investors.3.Increased and better bitcoin mining
When bitcoin hit its lowest price point of the year, the hash rate of the Bitcoin blockchain was at its lowest in a long time.But ever since the price went up, the hashrate has been increasing.In September the total computing power behind the Bitcoin network surpassed to 100 million TH/s milestone for the first time.
Since that time it’s been moving between 74 and 114 TH/s.Within one year the hashrate of the Bitcoin blockchain almost quadrupled.
Having a powerful mining network is useful, because it protects Bitcoin from a 51% attack.During such an attack one person or group gets command over more than half of the network, and is therefore capable of duplicating transactions.The more computing power is protecting a network, the more difficult and expensive it is to initiate such an attack.Currently a 51% attack on Bitcoin would require billions of dollars on hardware and 500 thousand dollars on electricity for an one hour attack.
During 2019 many investors and entrepreneurs have put money in cryptocurrency mining.
In Russia old factories and hydro-power plants are being reused as mining farms .Especially in cold Siberia, where electricity is cheap and cooling comes almost naturally.Mongolia also turned out to be a favorable location for cryptocurrency miners .Cold weather provides a cheap way to cool the computer systems.
Other places around the world are also using natural resources for cryptocurrency mining.For example in Canada, where unused natural gas is burned to power cryptocurrency miners.
In addition several companies have opened up major crypto mining operations in the United States.In California solar panels are used to power the bitcoin mining farm, while a Denver-based company will also use excess gas to power mining systems .It just shows that entrepreneurs are getting smarter in the way they build bitcoin mining installations, while the bitcoin network is getting stronger.
It’s a signal that bitcoin is here to stay.
4.Continued Bitcoin development
Bitcoin is always changing.If the Bitcoin blockchain we have today would still be the same as the one we had ten years ago, things would’ve probably collapsed already.Behind those digital numbers in your wallet is a big group of developers working on improving the bitcoin and the Bitcoin network.
In 2019 alone the Bitcoin network through three different updates .Bitcoin Core version 0.18.0 released in May, followed by 0.18.1 in August and 0.19.0.1 in November.
This development will continue, and those interested can follow it on Github .Currently there are proposals to add more privacy to the Bitcoin network or expand options for messaging.
5.Lightning Network
One of the difficulties the Bitcoin network is that it’s not really suitable to deal with millions of transactions at the same time.The network simply can’t handle that.As a result transaction fees would rise, which should not be needed in the first place.
That’s why developers are building layers on top of Bitcoin.
These layers do all kinds of transactions and calculations, and in the end they only communicate the outcome to the main blockchain.The Lightning Network is one of those layers.
It would be wrong to assume that the Lightning Network is the holy grail for Bitcoin’s problems, however it is a clear sign that those problems can be solved.Many consider Lightning to be one of the major solutions for Bitcoin’s scaling problems , even though it’s still in a testing phase.
Lightning allows people to create a temporarily communication channel between two parties.Here they make as many transactions as they want.After closing the channel, the network only communicates the outcome of these transactions to the Bitcoin network.As a result a transaction on the Lightning Network only needs to cost a fraction of a cent.
Lightning is already seeing adoption.
So-called Lightning Apps (LApps) are becoming the testing ground for the future of bitcoin payments.There are online shooters that make a Lightning transaction every time a player hits an enemy, and there’s an alternative to WhatsApp, called Whatsat .This LApp allows users to chat using Lightning.In December 2019 cryptocurrency exchange Bitfinex became the first exchange to support Bitcoin’s Lightning Network .6.Bitcoin payments becoming mainstream
In August 2019 investment and management firm Greyscale stated that over 100 thousand shops and organizations accept bitcoin as a payment method.
They expect a bright future for bitcoin as a borderless payment option around the world.
Even though it’s still not possible to pay the gas company in bitcoin, there are payment providers to allow clients to do so.In Europe Bitpanda has build a service to pay utility bills and subscriptions using cryptocurrencies.In Australia and the United States similar services are available, like LivingRoomofSatoshi.com and DigitalBillPay.com respectively.
True adoption of cryptocurrencies will only happen if users are able to spend their digital money.Currently those 100 thousand shops are not enough to compete with Visa and Mastercard.However, bitcoin and other cryptocurrencies are catching up.It looks like Starbucks will be accepting bitcoin in 2020, while 25 thousand retail stores in France will start accepting bitcoin as well.
All kinds of startups are trying to connect cryptocurrency payments with regular payments.Some of them create debit cards topped with bitcoin and other currencies, while others integrate crypto payment software in payment devices .Once again a sign that the borders between cryptocurrencies and traditional money is fading.
7.Bitcoin adoption
Payments are just one way to start using bitcoin, but thankfully there’s a whole lot more.Take the network as a whole for example, as mentioned earlier it would take a considerable amount of effort and money to takeover the current version of the network.It’s likely that this difficulty will only increase, and thus strengthening the Bitcoin blockchain.
Other projects can build second layer solutions on top of Bitcoin and use that strength and security to protect their own network.For example, bitcoin mining company Bitfury has launched an enterprise blockchain which is secured by Bitcoin.
Even more interesting is Microsoft’s effort to build an identity network called DID on top of the Bitcoin blockchain.
As long as Bitcoin is the strongest and most widespread decentralized network on the planet, it can be used as a way to secure data.Smaller blockchains can use this security to their own benefit, in turn making the Bitcoin blockchain even more secure.
Adoption doesn’t only happen on a technical level, but also needs to find its way into our every day life.The fact that tobacco shops in France are selling bitcoin coupons is a sign that adoption is happening.
According to rumors investment platform Bakkt is talking with many companies to boost the adoption of bitcoin.They are for example involved in the development of a consumer payment app in collaboration with Starbucks.
Bigger brands are needed before the masses will embrace bitcoin.
Samsung already has a bitcoin wallet integrated in its Samsung Galaxy S10 smartphone, while the HTC Exodus S1 is even capable of running a bitcoin node.At the same time retailers are dipping their toes in the water by partnering with bitcoin reward program Lolli, allowing consumers to buy with dollars and get some bitcoin back in return.Adoption is happening, slowly, only in a few countries at the time.But, it’s happening.8.The Bitcoin halving
Somewhere around May 2020 the Bitcoin blockchain will adjust its rewards for miners.
The rewards halves every 210 thousand blocks, which equals approximately four years.This will mean that the mining reward will drop from 25 bitcoin to 12.5 bitcoin.As a result there will be less influx of new bitcoin on the market.
Many consider the halving a major event for Bitcoin.Even though the immediate results on the bitcoin pricing aren’t impacted immediately.Most like the bitcoin value will catch up six to eighteen months later.The next halving after this one, will happen in 2024.
During this four year cycle the price of bitcoin can go anywhere.
Analysts from Germany-based bank BayernLB believe a 90 thousand price tag is reasonable for bitcoin before 2024.They address this to the ‘hardness of bitcoin’, which in turn they compared with gold.
This hardness will only increase over time, because the Bitcoin blockchain is lower its rewards for miners over time.
Bitcoin has a certain value at any given time.
Adoption, regulation, labor, market demand, have an influence on value.The Stock-to-Flow model places one attribute of Bitcoin at the center: scarcity.There will only be 21 million bitcoin ever, and the amount of new bitcoin hitting the market is getting less over time.The stock-to-flow model predicts a bitcoin price of $55.000 somewhere in the next four years.
At time same time other investors and analysts also expect the value of bitcoin to increase.American investor Tim Draper believes that the price of bitcoin will be $250.000 within the next three years.While John McAfee is still holding on to his $1 million in 2020 prediction.Bank and crypto trader Peter Brands expects bitcoin to move towards $50.000 next year, after it will hit a low around $5500 in February 2020.
Thanks for reading! Let me know your thoughts on the adoption of Bitcoin or the price predictions for bitcoin.
Keep in mind that none of this is financial advice.34CpoxRwJzEzBg7D6DtXTbkUVvzPXyTbKQ Digital crypto assets considered property in UK Five European countries ganging up on Libra Bitcoin legally protected property in China Digital krona likely to come to Sweden thanks to Libra Generic selectors.
