Over the past seven years the Bitcoin industry has grown organically and continues to grow at good pace. The adoption of new technology starts off as a niche interest amongst enthusiasts yet accelerates as more people participate. Bitcon has showed significant progress in the same direction. What started as an anonymous experiment went on to become disruptive and transformative. With greater smartphone penetration it is evident that Bitcoin and its IOT applications are sure to find mainstream adoption.
But what will it take for Bitcoin to become the center of our financial system? Most of the industry experts believe that these are the five phases Bitcoin will have to go through:
Experimentation Phase (2009–2010):
This phase has no real value associated with Bitcoin. It is when the currency is new and hackers and developers are playing around with the source code. It majorly involves experimenting with Bitcoin as a medium of exchange.
Early Adopters Phase (2011–2013):
Interest from investors and entrepreneurs started to grow with substantial press coverage in the light of its applications and potential. First generation of Bitcoin-related companies (exchanges, merchant processors, wallet providers, etc.) started. Potential began to shine through poor management.
Venture Capital Phase (2013–Present):
World-class VCs started investing in Bitcoin companies. The rapid ramp-up is already outpacing the early adoption days of the Internet. VCs poured more than $90 million into Bitcoin-related businesses in 2013 and more than $300 million in 2014. This is comparable to $250 million invested in Internet-related businesses in 1995.
Wall Street Phase (2015-Present):
Institutional investors, banks, and broker-dealers begin moving money into Bitcoin. Rising price and volume (in addition to development of derivatives) become the catalyst for mass adoption as retail investment follows. Bitcoin actively becomes one of the portfolio components for Wall Street traders. This was indeed observed in the recent times in the face of global crisis like Brexit, Yuan Devaluation.
Global Consumer Adoption Phase (In the making?):
This stage is very crucial for large scale Bitcoin adoption. This is possible when:
- Companies continue to innovate and make it easier for consumers to buy, hold, and spend Bitcoin
- volume expands dramatically so that large merchants can start accepting payment in Bitcoin
- Bitcoin awareness continues to rise with these developments
With better methods of transacting and merchant adoption, with the given mobile penetration, Bitcoin can very well replace the existing monetary system.
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