The topic around the future of Bitcoin has come up in discussions recently. Specifically about what will happen when “regulation” comes or will it even be around in 5 years time?
It’s quite a loaded question but anyone who says they know for certain what will happen is either lying, trying to sell you something or is actually a Time Lord and has travelled back in time from the future lol!
The truth is, we really don’t know what the future of Bitcoin holds and where all this is going. That’s something we’ve been saying on The Bitcoin Manual often but we are all of course entitled to our opinions.
As you’d expect, our opinions are going to be more in favour of Bitcoin being around for many decades to come but we always like to keep an open mind.
With that said, I thought I’d put together the points I can think of that are both for and against Bitcoin’s longevity.
The Case For Bitcoin’s Longevity
The 2021 “State Attack”
The operation of Bitcoin’s network, that is it’s underlying blockchain technology, is spread out across all parts of the world. In other words, there is no single point of failure and it is decentralised.
If one part of the world decides they want to ban it, say… China in the Summer of 2021, then those nodes and miners that aren’t in China continue securing the network and it remains operational. 24 hours a day, 7 days a week, 365.25 days per year.
In fact, it only took 5 months for the hash rate to recover to all time highs again as those miners that were evicted from China found a new home in various places across the world.
This was labelled a “state attack” by many Bitcoin advocates and the fact Bitcoin just continued doing what it was programmed to do whilst being more secure now than ever, should make anyone feel assured about Bitcoin’s longevity. At least from a technological standpoint.
Nearly 13 years, $1 Trillion
Although 13 years may not sound like a long time, that’s still over a decade! Since Bitcoin’s launch on Jan 3rd 2009, the growth has been incredible. Not only in monetary terms but the number of people using it and the size of the network too.
Let’s consider how few people were involved in the early days of Bitcoin and when it didn’t even have a price to where it is now with it’s global reach, institutional involvement and $1 trillion market cap.
It’s hard to argue against its growth and adoption, given that only ~2% of the global population are estimated to have Bitcoin right now.
Personally, I can’t imagine that this will only stay at 2% and I feel it is more likely to go to 4% than to 0% but this is just one guy’s biased opinion. You’ll need to DYOR and form your own!
Adoption As Legal Tender
In the Summer of 2021, a small country in Central America going by the name of El Salvador passed a law to make Bitcoin legal tender alongside the US Dollar.
President Bukele felt he had to do something about the impact of the United States rampant money printing in the face of the pandemic in his own country.
What the money printing was doing was diluting the purchasing power of the US dollar, not just in El Salvador but in other countries that use it across the world.
Add to that the 30% remittance charges that citizens have to pay when sending money back from USA to their families in El Salvador and many were feeling the pain.
So they decided to adopt Bitcoin’s open, non-discriminatory, instant and low fee lightning network to help facilitate payments and now you have companies like McDonalds and Starbucks accepting Bitcoin payments alongside the US dollar! How crazy is that!
If you think, “it’s just El Salvador, a small nation no-one has heard of” then you might want to think again.
There are other countries in Latin America and Africa who are keeping a VERY close eye on the developments there and are looking in to adopting Bitcoin as legal tender themselves in the coming years due to the known money issuance of Bitcoin’s protocol.
The Case Against Bitcoin’s Longevity
Regulation & Legislation
A lot of what gets decided around regulation lies in the hands of a handful of people in the USA. Predominantly, the UK follows whatever the SEC do in the USA and the Financial Conduct Authority is doing whatever it can to stop Bitcoin businesses thriving in the UK.
This is likely due to the government and Bank of England wanting to launch their own Central Bank Digital Currency (CBDC) and they will slander Bitcoin with every bit of FUD they can, paving the way for this “Britcoin”.
Regulators can’t target Bitcoin directly though as it is decentralised and they can only dictate the treatment of it in their own jurisdiction.
However, they can target the “on-ramps” where you buy Bitcoin and shut down centralised exchanges which will make it difficult for plebs like you and me to buy it. Although there are other more decentralised options should you wish to acquire non-KYC Bitcoin.
The other thing to consider is taxes.
As you can imagine, these regulators will want a piece of the pie should you want to sell after making “mad gains”. Yet they also slam Bitcoin saying we should be “prepared to lose all our money“.
What’s that countryside air I can smell…?
Although taxes won’t stop Bitcoin, it might put a lot of people off and stop people getting involved. Taxes hit us all over the place though regardless so as long as you’re aware of your local country’s tax laws, do your due diligence and speak to a qualified professional tax consultant if you’re unsure, you will hopefully be OK.
ESG – Environmental, Social & Governance
This is something that countries, investors and institutions have to consider before they pump a lot of money into something. Or if you’re Elon Musk and Tesla, it’s something you consider AFTER you’ve already bought $1.5 billion worth of Bitcoin lol!
Bitcoin continues to make headlines for its energy consumption and it’s not something that we haven’t come across before with many Bitcoiners providing research as to how green the Bitcoin mining industry is.
However, with an increasing awareness and consciousness around the environment and global warming, one can understand how the clickbait headlines of “Bitcoin uses more energy than [country x]” would put off any normie or precoiner.
Sadly, it seems that a lack of understanding around Bitcoin allows those kind of headlines to instantly influence people who haven’t done any research in to what Bitcoin is or what problems it is solving.
Yes Bitcoin uses energy, that’s something we’ve covered a lot about on TBM, we’re not blind to it but energy usage is not the same as carbon emissions.
There is a whole industry around Bitcoin mining that uses freely available renewable electricity on the market that is fully paid for like you would pay for your electricity for your Christmas lights.
Except your Christmas lights aren’t securing $1 trillion of value across the globe are they…?
This debate will go on for years to come though and as governments are looking to meet their ESG targets, energy intensive industries such as Bitcoin mining could be a target.
Of course, due to Bitcoin’s decentralised nature, those Bitcoin miners will move to more renewable energy sources such as hydro which is cheaper anyway and if all else fails, move to more Bitcoin friendly countries.
EMP Or Internet Shut Down
An EMP or “electro-magnetic pulse” is an electromagnetic wave that can occur naturally or artificially and will wipe out any electrical circuits and, if strong enough like a lightning bolt, can damage structures.
A local EMP attack would only affect instrumentation in the local vicinity, which would likely result in hash rate decreasing due to a local mining station getting wiped out.
The rest of the miners across the world would be unaffected unless the attack was so coordinated that they managed to wipe out every miner and every node. If this happened then the Bitcoin network would come to a halt until a miner or node came back online to resume the order of play from the previous block.
On the other hand, if nature decides to totally screw us over and Earth sends out a pulse that wipes out all of the Bitcoin miners and nodes across the world then yes, there’s a high probability that Bitcoin would stop working.
However, all electrical circuits will be wiped out and I think at that point, there’d be more important things to consider such as basic survival…
EMP aside, if the internet went down, well, you wouldn’t be able to read awesome articles on TBM for a start 😛
With regards to Bitcoin, recent developments have highlighted that transactions can still be done offline and using radio frequencies so actually, no internet? No problem!
Could you survive without the internet?
What Is The Future of Bitcoin?
Personally, I feel if Bitcoin was going to be shutdown completely, it would have happened already and since I’ve been focusing on it more over the last 18 months, I really can’t see how Bitcoin won’t be here for decades to come.
It’s adoption as legal tender was a huge milestone in its history, surviving and then fully recovering from a complete ban from one of the global powerhouses and with institutions adding Bitcoin to their treasuries, the future is looking bright.
Yes, there are things to be aware of on the other side of the coin.
ESG and climate change are on everyone’s minds but it would be remiss of us to think that Bitcoin developers and the industry as a whole are not conscious of this too.
Over half of all Bitcoin mining is reportedly renewable and this trend will move towards being fully renewable in the next 10 years. This is freely available energy and as more efficient ways of using renewable are developed, there’s plenty to go around for everyone, including for your Christmas lights 🙂
Regulation will take time to catch up but for those who are in early, you are able to front run the institutions who are begging for ETFs so they can get involved.
The regulators would have shut down more exchanges from operating in their countries by now but it seems like the cat is out of the bag and there are so many products and services popping up, I just can’t think of a way how they are going to stop the progress of Bitcoin.
Black swan events such as EMP, war, internet shutdown and whatnot. Yes, there will always be unknowns of unknowns happening but if those occur then I feel we’d have more immediate concerns such as survival, rather than Bitcoin.
Only once we’ve recovered from a black swan such as that will we then need to have a truly global and open financial system. Oh! What do you know, we already have one of those with Bitcoin… 😉
Is there anything I’ve missed? What do you think about the future of Bitcoin? Let us know in the comments below!
Brilliant article, totally agree a major emp, solar or weaponised event, black swan events in themselves, are the biggest threat, as you say survival would be the high priority at that time.
Always very helpful and informative, please keep up these fantastic pieces.
Thanks so much Pete, glad you found this one helpful!