Bitcoin is merely a symptom and was born because countless of banks aren’t trustworthy. Bitcoin offers an alternative for facilitating trade, thus a new currency. A currency that can be used from anywhere in the world, by anyone who has an internet connection and a decent device. Better yet, without intermediaries like banks. If it’s so good, why would such a revolutionary currency fail?
There are numerous cases of how bitcoin could fail. So far, a government ban has been the strongest force against the bitcoin usage. But if bitcoin manages to survive long enough, what will be the final destruction? The essential part can be found in the bitcoin’s code itself: there is a cap of 21 million bitcoins that can be mined. To answer the main question, we first must look of how the mining process is likely to stop after all the 21 million bitcoins have been mined.
Miners keep the bitcoin’s network operating, by mining new blocks to the blockchain. Blocks can be mined by using a computer’s computational power to solve pointless, difficult algorithms. Therefore, a great extent of electricity is required. Of course, miners’ incentives have to be aligned to use costly power to produce new blocks, hence they get rewarded by bitcoins. When the 21 million cap is reached, miners don’t get compensated by mining new blocks. In other words, miners are required to maintain the blockchain and when the 21 million cap is reached, it is mandatory for miners to get higher compensation from transaction fees. One reason why bitcoin has been adapted by users, it’s because the transaction fees are significantly lower than sending for example US dollars. But why would the increased transaction fees fail bitcoin?
In the beginning, I explained that bitcoin is an alternative for previous currencies. Since bitcoin was launched, several other cryptocurrencies have been created with different features. As bitcoin’s transaction costs rise, so does the demand for a cheaper currency. Consequently, we will see other enhanced cryptocurrencies to develop as requirements and technology advances. But bitcoin shall not be forgotten. Most importantly, bitcoin’s underlying technology, blockchain technology, introduced us a clever solution for the byzantine general’s problem. An instrument for people to decentralize trust. As this tool is now available for us, who knows what the future will look like in terms of breaking centralization and establishing more democratic decentralisation. Therefore, bitcoin has served its purpose.