Bitcoin and Blockchain in 2016 – Report Summary

By Adam Teen | Tuesday, February 2nd, 2016

bitcoin not dead 2016Much of the press this year has viewed Bitcoin in a negative light which has fuelled a bearish sentiment towards the cryptocurrency. However, CoinDesk’s recent report on the ‘State of Bitcoin and Blockchain in 2016’ claims that Bitcoin is far from being dead

as many newspaper headlines had us believe. The report clearly shows that despite the negative media bitcoin has gained many new users and new investors believe the technology still has a great potential.  

Cryptocurrency has still a long way to go in making people feel comfortable using it. There are still a lot of people who feel reluctant to use bitcoin, let alone to invest their hard-earned money into it. However, the bitcoin userbase is increasing and the number of bitcoin wallets has doubled in the last year and transactions have increased by half. The fact that the the use of bitcoin in growing worldwide seems to be a good indicator that this cryptocurrency is far from being dead.

The report also shows that bitcoin mining companies have started to consolidate their pool powers. This means that majority of the processing needed to get new bitcoins will be done by fewer miners than before. This worries some bitcoin enthusiasts because they feel that bitcoin’s decentralized nature is at stake and that the consolidation of the mining pools will lead to an unfavourable outcome in which the power of bitcoin mining will be in the hands of only one or few companies. The flipside to that is they will be more accountable and less secrative.

Another thing that has been mentioned in the report is the blockchain technology and its speed and size of processing. Currently the blockchain can only support between 3 to 7 transactions each second. This limitation has been the focus of much heated debate in the last year and there are few solutions being proposed but nothing set in stone yet. As the bitcoin userbase increases the blockchain dilemma will need to be resolved rather sooner than later. It is suggested that 2016 will be the year of new bitcoin innovations and changes that will pave the way towards the future of the cryptocurrency.

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