Bitcoin Payments are Maturing
Bitcoin is slow. Its transactional throughput is seven transactions per second and its transactional finality is 60 minutes. But you can still use Bitcoin to pay for a burger in El Salvador. Confused?
That’s the magic of Lightning Network, which uses its own native smart-contract scripting language along with real Bitcoin transactions to enable secure, high-volume, and high-speed Bitcoin transactions.
On September 7, 2021, El Salvador became the world’s first country to recognise Bitcoin as a legal tender. And in March 2022, the Swiss City of Lugano made Bitcoin “De Facto” legal tender. Lugano, in addition to allowing crypto for taxes, is aiming to have all of its businesses seamlessly use crypto for everyday transactions.
Smart Contracts, NFT, DeFi, and dApps on Bitcoin
That’s the magic of:
- Liquid Network
- Omni Layer
- Merged mining blockchains
Liquid Network is a sidechain-based settlement network that enables faster, more confidential Bitcoin transactions, and digital assets issuance.
Omni Layer is a software layer on top of the Bitcoin blockchain for creating and trading custom digital assets and currencies.
Stacks is an open-source blockchain that leverages Bitcoin for decentralised apps and smart contracts. Since Stacks uses Bitcoin as a base layer, everything that happens on Stacks is settled on the Bitcoin blockchain. Stacks connects directly to the Bitcoin blockchain through its proof-of-transfer (PoX) consensus mechanism.
Merged mining (technically called auxiliary proof of work) is the process of mining two or more blockchains at the same time. Essentially the same proof of work can be used on multiple chains.
Bitcoin merged mining blockchains include RSK, Elastos (ELA), Myriad (XMY), Unobtanium (UNO), Syscoin (SYS), Terracoin (TRC), and Blast (BLAST).
RSK enables smart contracts on top of Bitcoin, near-instant payments through RIF Lumino, and
greater scalability for Bitcoin.
Crypto Trading Pairs
Trading pairs are cryptos that can be traded for each other on an exchange such as Bitcoin or Ether (BTC or ETH). Many cryptocurrencies can only be bought with Bitcoin. This helps maintain the importance of Bitcoin in the crypto world.
Bitcoin as a Store of Value
A store of value is an asset whose value either remains the same or increases over time. Some of the most popular stores of value are gold, real estate, and even art.
I believe that Bitcoin is becoming globally accepted as a store of value, and its total market cap would equal that of gold by 2030.
Depending upon your source of information, the market cap of all the gold in the world is estimated to be between $8 trillion (roughly Rs. 6,10,56,360 crore) and $12.7 trillion (roughly Rs. 9,69,30,781 crore). So in the long term, the market cap of Bitcoin would be between the same figure limit.
Considering a maximum supply of 21 million Bitcoins, I think a fair long-term price would be somewhere between $380,952 (roughly Rs. 3 crore) and $604,762 (roughly Rs. 4.5 crore).
This is subject to one critical caveat — the blockchain technology is not “broken”.
Rohas Nagpal is the author of the Future Money Playbook and Chief Blockchain Architect at the Wrapped Asset Project. He is also an amateur boxer and a retired hacker. You can follow him on LinkedIn.
Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.