Bitcoin as we know it today is still at its infancy stage. Why is it so? In 2017, the whole bitcoin infrastructure became unusable for transacting with each other as money due to high fees. With new ideas came the vision of lightning network, allowing instantaneous payments, bringing second layer into bitcoin.
With more and more investments being poured into the bitcoin ecosystem, newer inventions are made. New ideas are built.
The future of payments as we see it
- Bitcoin is the currency of choice for transactions online
- NFC enabled smart phones are being used to transact at stores
- Bitcoin having grown bigger, the currency is more stable for transactions
- Computers paying computers or internet-of-things devices
- Lightning network for micro-payments, bitcoin on-chain for large purchases such as properties
- Smart contracts for agreements
- In-Game currency
Bitcoin as the currency of choice for online transactions
As more people learn about bitcoin and adopt in their businesses, bitcoin becomes the currency of choice for buying online. It’s great for people who do not have bank accounts or credit cards due to various reasons. Calling it banking the unbanked.
Transactions in bitcoin are done irrespective of countries or borders. No one is denied from transacting from one another. No central authority can judge what you can or cannot sell. Nobody can restrict free trade and deny someone’s rights to transact due to race or political views. It’s the freedom to trade with anyone anywhere in the world.
No one has to pay high fees to transact online. You do not have to pay your credit card merchants high fees for transactions anymore. Cut out the middle man which is taking all the profits from your business. You do not have to pay high currency conversion rates from different countries.
Transactions occur instantly with negligible fees (almost free). You will receive the money in less than a second anywhere in the world. No need to wait for many days for the money to be deposited into your bank account.
Furthermore, cross-border transactions will be so much easier and more efficient. No longer do you need to wire money or use western union for money transfer that charge exorbitant amount of fees.
NFC enabled smart phones are being used to transact at stores
Like in China, QR codes are being used to send money via Alipay and WeChat Pay. Like using a credit card with paywave function, you can pay a merchant just by touching your phone on the receiver. Like using Android Pay, Apple Pay and Samsung Pay, bitcoin using NFC will replace existing Vsa and Mastercard transactions due to its more efficient and less fee advantages.
As more and more people can afford better smart phones at lower price, the future NFC payment via bitcoin lightning can come true.
The future is already here. We are already using Samsung Pay to pay using the credit card linked to our phones. It’s about time people realize the potential of using something similar using lightning network on top of bitcoin’s secure blockchain technology.
Maybe some day in the future, lightning network on top of bitcoin can be used on a specially designed credit-card sized hardware wallet which acts like a regular credit card with tap-to-pay function. You will be able to preload your bitcoin into your card before use, acting like a regular wallet.
Visa outage that happened in Europe after card network crashes will be a thing of the past using the bitcoin blockchain technology. It’s because the network will be decentralized, and you do not need a central authority to process the transactions.
As the size of bitcoin grows bigger, the volatility of the currency decreases
Bitcoin currently is just over a 100 billion USD market capitalization currency. It’s still too early and relatively small compared to other commodities, stocks etc. It’s even smaller in size compared to the dot-com bubble which is trillions in size.
Don’t believe bitcoin can grow? Look at Amazon and Facebook’s stocks for comparison.
As you can see, Amazon’s total market capitalization is 823 billion dollars. And it’s only a single company. The market capitalization is currently 8 times bigger than bitcoin (bitcoin is used everywhere in the world – worldwide).
Take another look at Facebook’s market capitalization, which is 554 billion dollars currently. Bitcoin pales in comparison to these two single entities.
And why we think bitcoin can grow larger in the future? Look at the price of Amazon since the beginning, 1.73 USD on May 16, 1997. And it has grown more than 100 times in over a span of a little over 20 years. Facebook? 38.23 USD since May 18, 2012 to currently 5 times in over just 6 years.
Then there’s Google’s Alphabet. No explanations needed.
Bitcoin is being traded everywhere in the world. And it’s future is bright. The price in the future will be massive. And as bitcoin becomes a giant, the volatility will decrease over time. People will be able to use bitcoin for transactions with one another without having to worry about the price falling over 10 percent or more after a few hours.
Internet of things devices on bitcoin lightning network
Imagine that in the future, devices such as your car will be able to pay another machine automatically. For example, you park your autonomous electric vehicle at a supercharger. And while your car is being charged, micro-payments via bitcoin lighting are being paid from your car to the charger machine automatically for using the electricity. You do not need to personally tap your wallet to pay. It’s all being done automatically.
Talk about the possibilities, it is endless. As artificial intelligence becoming more advanced day by day, the future is sure interesting.
Bitcoin lightning network for micropayments while pay with bitcoin on-chain for larger purchases
In the future, we leave some spare change in our lightning wallet for small purchases and use bitcoin on-chain for larger purchases such as cars and properties.
Paying via bitcoin on-chain is the most secure way of transactions, being powered by miners all around the world. Once the transaction has received a few confirmations, the transaction is therefore irreversible and there is no way for refund in the bitcoin network.
And it’s all possible in the future as the size of bitcoin grows big enough that the price volatility is decreased to the minimum.
Smart contracts for agreements
Besides bitcoin, we also have other cryptocurrencies such as ethereum and litecoin. Each with their own advantages and disadvantages. For example, litecoin can also be used for large transactions such as properties in the future due to its secure network on-chain, and it’s faster to transact with litecoin compared to bitcoin on-chain, plus the lower fees.
Ethereum is being used for smart contracts. Many decentralized apps, called Dapps are being developed for this purpose. Use case scenario? Let say you buy a house and you receive a piece of digital property paper with you being the owner of the property. Nobody can question the validity and it is guaranteed to be safe and secure. Frauds will be a thing of the past. Everything done will be recorded in the digital ledger which will be present forever.
As time progresses, many game developers will choose to use cryptocurrency for their in-game money. Whenever someone wants to level-up and buy more powerful item in a game, one can pay with a QR code scanned and buy instantly. That will change the gaming space in the future.
Already, many online casinos have been using bitcoin and altcoins for transactions. Most of the casinos online prefer to use bitcoin as some face scrutiny opening a bank account for online gambling. Many online gambling sites frequently have to open a new bank account as they are often times suspended for their activities. As deemed illegal by central authorities such as banks. With bitcoin, no central authority can punish or judge you by closing your account, because only you have control over your digital wallet account.
The future of bitcoin is limitless
As the world evolve, people with ingenuity will be able to build revolutionary technology. Ideas get better and things get done more efficiently.