Many predictions have been made regarding Bitcoin’s price which, after jumping from around $1,000 to $20,000 in 2017, decreased to lows of around $6,000 before climbing back to $8,000.
This huge volatility makes it very challenging to predict the price in the short-term. Nonetheless, a fundamental analysis of the evolution of Bitcoin’s price in the longer term could be more reliable. Several predictions are analyzed and discussed below to estimate the most likely direction of Bitcoin’s price in the medium to long-term.
Prediction 1: Institutional investors’ money will increase Bitcoin’s price
The CEO of American Express-backed startup Abra has predicted that big investors will make “all hell break loose” in a recent interview with Business Insider. He mentioned that there is currently little large-scale institutional money in cryptocurrencies and when this changes the impact on Bitcoin’s price will be very positive.
So, what is preventing this institutional money to flow into Bitcoin and cryptocurrency markets in general? The current technological limitations of Blockchain could be a key reason, especially those related to scaling. However, right now there are scientists and software developers building trailblazing innovations that could take Distributed Ledger Technology (DLT) to the next level, as pointed out by Don Tapscott, author of the book ‘Blockchain Revolution’.
Decentralization, scalability and security are the trilemma in DLT meaning that if you were to improve scalability then security would be compromised, and so on. However, this trilemma, which has been the limiting factor for the technology, is about to be overcome.
Sharding, interoperability and formal verification
Ethereum and Zilliqa are working on a process called “sharding” which could greatly improve their throughput and their number of transactions per second – matching or surpassing those of Visa or Mastercard.
Other projects are creating the ‘Internet of Blockchains’ by allowing interoperability among Blockchains, both public and private. They would also offer shared security and instant finality meaning that it will not be necessary to wait for several confirmations to validate a transaction.
Furthermore, hacking attacks such as the one that affected the DAO and triggered the Ethereum hard fork could become a thing of the past once formal verification of smart contracts, such as the ones Tezos or Zen Protocol projects are using, will ensure that there are absolutely no errors in the code and therefore no way to attack it. Formal verification is already used in airplanes, medical equipment and nuclear reactors, all places where there is little scope for errors.
Xinshu Dong, CEO of Zilliqa, among the first Blockchain to use the technology of sharding with a public testnet launched on March 31, recognizes also the importance of formal verification of…
continue reading at COINTELEGRAPH