Adam is a technology consultant with Altus. Bitcoin, and digital currency more broadly, is one of the most divisive concepts of our time. The idea of a currency which is not controlled by a state or a corporation and which maintains such a high level of privacy for its users is a much needed relief for some and a threat future bitcoin value the whole economic and political system to others.
3,000 by the end of the year As bitcoin is primarily used for trading or transferring value, the value of bitcoin is controlled by the total value of goods in transit tied to bitcoin as the payment medium. As more and more trade is taken up using bitcoin as the transaction medium, the value of bitcoin will rise to equal that trade. However, governments cannot control the supply of bitcoin so as the currency becomes more widely used, a continuous increase in the value of bitcoin is predicted. This theory is born out of research undertaken by the World Economic Forum. Money laundering poses a big threat While many will associate the use of bitcoin with the purchasing of illicit materials from sites such as the now defunct Silk Road, there are now potentially much more lucrative opportunities for criminals.
The dark or shadow economy is estimated to take up somewhere in the region of 17 per cent of the world’s total GDP. Due to the level of anonymity bitcoin provides, there is huge opportunity for its use to avoid anti-money laundering legislation. Any increase in use here would result in a reflected uplift in the value. As bitcoin becomes more pervasive, we predict governments will try to control it, try to understand more detail about how it is being used, and try to monitor its use in the dark economy. However, because of the structure of bitcoin, and the encryption and anonymity which is baked into blockchain, there is very little opportunity to control this.