
Bitcoin 2014 – Top predictions - ankitoberoi
http://lightspeedindia.wordpress.com/2014/01/13/bitcoin-2014-top-10-predictions/
======
reitzensteinm
Here's one that I'm sure I'm going to regret saying publicly later. But, here
goes:

Dogecoin will outperform Bitcoin in terms of percentage market cap growth in
2014. Even if both are negative.

~~~
DanBC
What does "percentage market cap growth" mean? (Is there a glossary of
financial for beginners that anyone can recommend?)

If dogecoin takes off on Reddit and 4Chan as a way of showing appreciation I
can see it having many users.

~~~
reitzensteinm
Market cap is a term borrowed from the share market[1]. I don't think it's
technically correct applied to BTC but it commonly is.

Market cap growth as a percentage just means, if all BTCs in circulation are
worth $10bn today, and $15bn tomorrow, then the market cap has grown by 50%.

I didn't use the price of the coins themselves as BTC is being minted more
slowly than DOGE.

[1]
[http://en.wikipedia.org/wiki/Market_capitalization](http://en.wikipedia.org/wiki/Market_capitalization)

~~~
TomGullen
"Total dollar value" is the correct terminology for currencies

------
fab13n
Mining: if we're to believe in free markets, fees will adjust to the amount of
available CPU resources. I hope that it won't be profitable enough for people
to dedicate farms to mining, but that companies with a lot of CPU power will
rentabilise their spare CPU cycles by doing a bit of mining with it. This
would be reassuring, as it would keep mining decentralized, which is important
to maintain trust in bitcoins.

~~~
nwh
Mining with a CPU is long since irrelevant, even GPUs are completely useless
as far as mining is concerned. The network uses ASIC hardware now, basically
chips designed only to mine Bitcoin quickly and efficiently. Attempting to
mine on a CPU is completely futile and does absolutely nothing for the
network.

~~~
nisa
It's not really useless. There is Primecoin that is searching for prime chains
as proof of work. At the moment there is no (public?) GPU miner. The involved
computations are also difficult to port to the GPU.

~~~
nwh
Primecoin? It's not solving a "problem" as it claims, there's nothing that can
be solved with chains of primes. They're interesting but that's about the end
of it. The vastly smaller network means it's a lot more susceptible to
attacks.

~~~
nisa
It's not different from SHA-256 or scrypt in that regard. However there
appears to be some interest in these primechains from the scientific
community. I never claimed it is solving important "problems" but I like the
CPU only property. The Bitcoin GPU/ASIC race favored a few wealthy
individuals. 40% of all BTC is in the hands of a few people. I don't see this
happen with Primecoin at the moment. GHash.io looks more like a problem for
Bitcoin as e.g. botnets for Primecoin.

I'm more interested in better and faster miners for Primecoin as this is a
pretty interesting problem to solve. Getting rich with either of these coins
is pretty much impossible if you are not already wealthy and able to invest a
good amount of money and energy - especially in the BTC ecosystem.

------
nwh
> _There will be less than 5 alt-coins (out of the 50+ in existence) that will
> survive 2014_

From what I've seen the number is more like 3-400.

> _Bitcoin community will solve problems including that of ‘anonymity’_

Sorta already has, it looks like CoinJoin will be implemented into the
mainline client when it's mature enough.

[https://bitcointalk.org/index.php?topic=279249.0;all](https://bitcointalk.org/index.php?topic=279249.0;all)

> _Kryptokit and Eric Voorhees’ Coinapult are promising start-ups in this
> direction._

I desperately hope they don't gain any userbase, they are both woefully
insecure products. Kryptokit can't even maintain the claims it's authors make.
"It has no central server" — yeah why are these requests going back to your
server then? The community suffers when it's relying on insecure, half baked
software like that.

------
nkuttler
This guy certainly has a chatty crystal ball. Personally I'd recommend to
everybody to ignore such "predictions". And as always, keep in mind that this
is a new technology and BTC itself might be worth $0.01 at the end of the year
(even if I don't hope so).

------
reqres
> 9\. The price of Bitcoin is likely to range between $4000-5000 by the end of
> 2014

Setting aside the author's flawed reasoning as to what drives demand for
currency - I don't see how this is a positive prediction for Bitcoin as I
think it implies.

I'd like to see a decentralised currency work in the long run and the best
thing for Bitcoin right now is to maintain stability against USD. It needs to
prove itself as a trusted medium of exchange/store of value.

My prediction for 2014: speculators will deal a big blow to the credibility of
Bitcoin slowing down widespread adoption for any decentralised currency

------
marc0
I'd say most of the predictions are sound. No 10 goes a bit too far though.
Anyway, what I can't understand is why this rumor of bitcoin being anonymous
(No 4) is so persistent (maybe wishful thinking?). What's necessary here is
not a further technical development but rather some PR work (outside and
unfortunately also inside the community of bitcoin users).

~~~
ctrl
if all those predictions come true, including 3/4k worth and some technology
implementation to bring it to the masses.

You can bet your bottom bitcoin he will.

------
rockdoe
I'm surprised that it has essentially been shown that it's easy to corner the
mining market/pooling such that 51% attacks are feasible, yet nobody is
bearish over this.

------
emirozer
"Did i ever tell you the definition of insanity? Insanity is doing the same
thing over and over again and expecting different results."

Invest big in bitcoin --> pay writers to pump up hype articles --> write hype
related blog post --> shoot out huge valuation --> state that its future's
currency --> repeat

Meanwhile in China:

Government warns people, bitcoin loses 400 dollars in value..
Yeah..right..something this volatile/fragile just cannot become a
currency..Stop the insanity, wake up.

------
fit2rule
The BitCoin Browser is going to be very significant. I hope someone 'good'
emerges to capture that market. It'd be rotten if there were a "Microsoft
Bitcoin browser" and an "OSX Bitcoin browser" ...

~~~
josephagoss
I may have misunderstood, but I think his point '8' is more akin to saying
that Bitcoin needs it's killer app, kind of like how the browser was the
killer app for the internet.

~~~
oleganza
In some sense, the killer app of Bitcoin is ability to preserve (and possibly
multiply) wealth. That's already useful and many people jump on Bitcoin for
that reason alone.

In the same time, Blockchain.info, BitPay and Coinbase are doing great job in
servicing private people and businesses. These three are the most Netscape-
like guys in this early history.

------
dschiptsov
It will bounce around $1000, as a "magic point" on a low volume - those who
still want it most would buy small quantities at a price range between $1000
and $800, and then it will crash, perhaps, around April-May.

~~~
oleganza
Historically, there was never a case when Bitcoin had a stable price and then
crashed from it. It was always the other way: everyone who wanted to sell off,
did so quickly. Then after 6-8 months of some stable price (in late 2011, mid
2012, late 2012 and mid 2013) new investors saw that it's not going down any
time soon and started jumping in. The massive increases were also caused by
the fact that most people got to learn about Bitcoin during the previous
"bubble" and have taken some time to learn about it and wait till the prices
stabilizes or starts rising again. There's no technical reason to break this
pattern yet. On contrary, more and more people learn about Bitcoin and see
that it's still working as well as 1 or 2 years ago.

~~~
dschiptsov
Past has no influence on the future - each toss of a coin is independent.
Jokes aside, there was never such a massive bubble and such dramatic rise in
price without any economic reasons. For me it looks like nothing but
speculation.

If you would look at volumes in bitcoincharts.com you will notice that its
dramatic rise was on relatively high volumes, while after the first drop, from
$1200 to $1000 volume is rather low, which may suggest the impression that
everyone are holding in hope or looking for an opportunity of a bulk sell.
Right now, I think, there is no position who would buy, say, 200+ BTC at the
ticker price of $900 or whatever it is.

And, of course, such kind of predictions are nothing but fun, like tea leafs.

~~~
oleganza
Investing in BTC as a collectible unit _is_ a huge speculation, I have no
doubt about it. No matter how other Bitcoin supporters talk about "such a
useful ledger", there's no way to deduce how much all BTC _units_ should be
worth. Bitcoin-as-network is as good at $10/BTC as at $1000000/BTC. You still
can cheaply move dollars across the globe, or timestamp your contracts, or
whatever.

The productive discussion would be about what is the basis of that
speculation, or whether it can be equally huge with any other asset like a
tulip bulb or dotcom stock.

I'd argue, Bitcoin is unique in a sense that it can (already does) easily act
as money itself. People were investing in tulip bulbs, ponzi and dotcom stocks
in order to _cash out_ big way. Current stock market is no different. There's
a lot of "bad" money pumped by Fed and from pension programs and no
theoretical sustainability while all fundamentals say it's going to crash
hard.

On contrary, Bitcoin is a risky long-run bet that it will be useful as a world
money, so there would not be any need to "cash out" into some single asset at
the "maximum" price. If Bitcoin succeeds, then there'd be no need for dollars,
euros, yen, gold and silver. You'd be calmly selling portions of your BTC to
buy food, travel, shelter and invest in business.

Some portion of investors bets on that exact outcome. Those who bet on short-
term price increases to "cash out" produce that pyramid-looking effect (huge
bubble and then huge price drop), but every time there are more and more long-
term investors. This time BTC went from $140 to $1200 and quickly crashed to
$500 (then, getting back to $800-900). Clearly, everyone who wanted to cash
out already did and what's left are those holder who are not selling for some
time now. When BTC goes to $5-10K this year, then they might sell a portion of
holdings to newcomers, but keep the rest for a really long time. If everyone
continues to follow the same logic, this "pyramid" will lead to a situation
when almost everyone has some BTC, everyone values BTC a lot and everyone is
ready to trade this BTC between each other for whatever goods and services
they desire.

Right now, most investors in Bitcoin are economically disconnected (do not
trade directly with each other), so you don't see much transactions. Bitcoin
is used like gold: a speculative "store of wealth". But at some point the
density of investors will become so big, that more and more direct economic
relations will appear between them. Tomorrow you might find that your local
baker is BTC investor and you can pay him in BTC. Later he will discover that
his supplier also invested in BTC and thus will be able to accept even more
BTC and pay his bills directly with BTC. As this second phase (increased trade
bypassing fiat currency) progresses, people will see how Bitcoin is no longer
just "gold 2.0", but actual _money_. More and more will invest in it and thus
become payers and payees in BTC. As this goes on, reservation demand for USD
will start to go down quite noticeably and people will rush to BTC even faster
(as prices in USD grow quicker and quicker). Ultimately, USD will hyperinflate
and become worthless. All tax collectors will go looking for another job (they
want to be paid in BTC, but government can't just print it or buy it). In the
end, inflation and taxation will become impossible. Police will have to be
sponsored voluntarily on district-by-district basis. Armies will abandon their
bases and poor islamic nations being raped for decades will be paid a handsome
retribution as an anti-terrorist protection measure by the wealthy Bitcoin
holders in U.S. Bitcoiners outside the U.S. and U.K. would not need to worry
about being blown up that much, yet still will contribute greatly to
protection of whatever cities/countries they reside in.

~~~
dschiptsov
Well, I can see the logic, that a wide adoption will make it "the value
transfer system" rather than "virtual risky asset" but I can't see how this
would happen from the state in which it is right now without a crash.

~~~
oleganza
Why do you think there must be a crash for mass adoption to happen? I'd say on
contrary: some amounts of BTC must be owned by almost everyone in order to
become a regular money, but that would mean that the price of 1 BTC would have
to go north of $10M. The price is merely an indicator of the demand (since the
supply is fixed).

------
PaulRobinson
Predictions are basically hopes. When you look at them rationally, they are
rarely based on facts but intuition. On this list:

 _1\. More than $100M of venture capital will flow into Bitcoin start-ups._

No it won't because if you ask VCs they will mostly tell you that the value
can not be extracted easily into fiat currency and that's what they need to
still work in.

To that argument, some will say "BTC-only VCs" will emerge which is a
regulatory nightmare, so would be restricted to angels only, or that the money
will flow into making BTC<->Fiat exchange easier, but that needs buy-in from
the banks, and the moment they decide it's safe to do, they'll just do it
themselves so there is no market for it.

Investing in BTC startups is a risky business as it is. Putting $100mm into
them would be seen by the VC industry as positively insane.

 _2\. Mining ‘will not’ be dead_

If you run the numbers, it's of marginal profitability at best right now (and
in most legal use cases is a negative - you need to steal power from
somewhere, basically), and the miners aren't doing their maths very well. The
poster's opinion that smaller enterprises will move their mining out to the
cloud means they haven't done the maths either.

 _3\. There will be less than 5 alt-coins (out of the 50+ in existence) that
will survive 2014_

This made me laugh. The fact alt-coins exist at all shows how the value of BTC
is being misunderstood by both sides of the "is this tulipmania or a
revolution?" debate.

The advantage of BTC is that it's a decentralised "currency" based on open
source algorithms and a network of workers validating itself, which can be
easily replicated.

The disadvantage of BTC is it's a decentralised "currency" based on open
source algorithms and a network of workers validating itself, which can be
easily replicated.

It's biggest strength is also it's biggest weakness.

If you can't see that strength as a massive weakness, ask yourselves what
value BTC intrinsically has over other alt-coins.

If you follow that argument down the inevitable rabbit hole you will
eventually rationalise that the value is based on perception, much like fiat
currencies of the modern era, and you will start hankering for the gold
standard.

Except the perception of fiat currencies is so strong it is unlikely to be
undermined by the majority. Is that true of BTC?

In essence, BTC will remain strong as long as people believe it will remain
strong. But the moment the majority flip, or switch to an alt-coin like
Litecoin, etc. then what value will it retain?

 _4\. Bitcoin community will solve problems including that of ‘anonymity’_

Anonymity is not the problem banks and governments are truly concerned about.
If it were, cash would be phased out by governments just as much as BTC would
be blocked. In general they are undecided but wary of BTC because it has all
the hallmarks of a Ponzi scheme with mysterious founders who do not make their
intentions known.

It is accountability of the system that is of concern, not accountability of
the transactions within it.

 _5\. US, China and other global forces will not be at the forefront of
Bitcoin adoption_

If you think that the US, China and other countries are "global forces" you
need to look at corporate entities more and ask who has the money and who has
the debt.

Either way, the fact that BTC could be a private currency that lets
corporations run free from government control and "tyrannical" central banks
is just going to force more legislation outlawing BTC transactions.

 _6\. Indian ecosystem will be slow to evolve; limited to speculators and
mining pools_

As indeed will the rest of the World. There are no pure consumers in the BTC
space - everybody in the BTC ecosystem right now is a miner or a speculator or
both, and the transactions are a side effect of suddenly having a lot of
"money" that can't be easily turned into fiat currency.

There are few people - if any at all - who are using BTC because they perceive
it as better for day to day transactions than fiat currency, because for the
most part it is not.

 _7\. The use of Bitcoin will evolve beyond ‘store of value’ or
‘transactions’_

Adding metadata to the BTC blockchain is mildly interesting. Using the
protocol for other purposes outside of the BTC transaction block chain
(messaging, etc.) is much more interesting.

I have no doubt that the true value of BTC is the protocol that might inspire
all sorts of wonderful P2P applications to emerge, but I don't think it's
clear right now that any of them still lasting in 10-20 years will be
currency.

 _8\. The ‘browser’ of Bitcoin will come this year_

By definition if you make a system easier to use, you have to make it less
secure. If this happens, we can expect many more "somebody stole my BTC
because I left my web browser open" stories.

Banks serve a useful purpose with BTC: they keep money safe. BTC needs
something like banks to emerge, and that defeats part of the point of BTC.

And of course, it's virtually impossible for BTC banks to operate because they
can't provide interest (BTC is designed to be anti-inflationary, and therefore
by definition the concept of interest is hard to fit into the scheme of
things), so people will either need to continue to struggle or we'll see value
being stolen regularly.

 _9\. The price of Bitcoin is likely to range between $4000-5000 by the end of
2014_

You could literally use a RNG to come up with predictions for 2014 highs this
year on BTC. Here are 10 I just came up with, and all of them are equally
valid: $0, $12, $87, $479, $2065, $3535, $5566, $9233, $65136, $72612. Pick
one, it's your prediction for the year. Well done.

And it's that uncertainty that is driven by the fact the whole damned thing
has so little liquidity and so much "value" is being sat on by speculators who
could start a rush in under an hour, that makes it so hard for people to see
BTC as viable long-term.

That then causes the effect that it is unlikely to ever become viable long-
term.

 _10\. Last but not the least – Satoshi nakamoto will be Time’s Person of the
Year 2014._

Possibly, but I'm not sure if they give that award to ponzi scheme creators,
so until they're certain it's not a ponzi scheme, aint going to happen.

~~~
iSnow
>If you can't see that strength as a massive weakness, ask yourselves what
value BTC intrinsically has over other alt-coins.

That's an easy one: the network effect
([http://en.wikipedia.org/wiki/Network_effect](http://en.wikipedia.org/wiki/Network_effect)).
Same why you cannot simply start another successful social web and eat
Facebook's lunch.

~~~
krrrh
Just like MySpace, or Friendster, Facebook's dominance is eternal.

Bitcoin's adoption in broad society is next to nil.

------
pixelcort
My prediction is special-purpose devices that store private keys and sign
transactions, without the ability to obtain the private keys directly, like
smart cards.

~~~
nwh
[http://www.bitcointrezor.com/](http://www.bitcointrezor.com/)

------
adrianwaj
Here are my predictions for the next couple of years (with a bit of wishful
thinking thrown in):

1 - There'll be a new Google for cryptos. It'll come onto the scene at full-
speed like Google did, not needing user requests, not caring about stepping on
anyone's toes. It'll know what needs to be done. It'll have a lot of
creativity and a large Labs divisions. It could even introduce its own
blockchain at some point, and may move into equity coins or alternate use
coins. It'll probably be based outside the US, or else have special government
tie-ins if in the US as with Google. It'd likely require a highly libertarian
government to work well if in the US.

2 - Bitcoin will retain its first-mover advantage but people will be aware of
alternatives and be cool to work with a few.

3 - A new set of startups will arise that are unbiased as to what coins they
work with... just like with the newer exchanges. "Bitcoin-only" as a syndrome
or as a consequence will be and old mindset. Bitstamp, Blockchain wallet, Mt
Gox - the mainstays of the current system will adapt or fade from domination.
It will be a demonstration of strategic agility and scalability.

4 - More alliances between exchanges/wallets/ecommerce providers/banks. More
conferences.

5 - Certain countries will attract more cryptocurrency innovation than others
depending on their policies. They will accept bitcoins and altcoins for tax
payments, and use them for spending on government projects. They may create
their own blockchain, and give tax incentives and tender advantages to
businesses using the government chain.

6 - More businesses will want move into cryptocurrencies, but it'll take
startups to offer the software and solutions that will enable them to do it.

7 - Shopping carts will start offering bitcoin and cryptocurrency payment
options (as modules) which tie-in with the larger global exchanges or smaller
local ones (or they'll run their own exchanges) that autosell coins as they
are received by shoppers. An advanced wallet may move into this space as well:
a wallet that is shared by buyer and seller means no waiting for
confirmations.

8 - The price of bitcoin will determine to a large extent the price of other
coins, but slowly coins will decouple.

9 - The price of coins will go up, but be contingent on events that force or
scare people to move into cryptocurrency.

10 - Logistical loopholes will be found in China to purchase cryptocurrencies.
More Chinese will simply obtain them by trading with people outside of China.
Pressure may come from Chinese sellers on ebay, and ebay may take large fees
for enabling it.

11 - Many new metrics beyond market cap will help evaluate coins to consumers
and businesses. One's holdings may move between coins automatically into the
most stable or rising one - or alerts will be given to prompt for this.

12 - Proof-of-stake coins will fine-tune themselves and the dev teams of older
coins will offer straight conversions into 2.0 versions of their coins - an
upgrade, but not necessarily a compulsory one, ideally backwards compatible.
Also blockchain pruning will occur.

13 - P2P pools and other improvements will become more important to 1.0 coins,
and there'll be pressure for an "x86 architecture for life, but with
improvements" type mindset from many coin holders and their dev teams.

14 - New point-of-sale options for physical stores involving chip or swipe
cards based on commodity hardware as people want to spend their coins in
everyday life -- and others will see them doing it.

15 - More people resisting cryptocurrency or ignorant of it will be forced to
use it, just like email, web, mobile phones. The sign of true viral software.

16 - AMD, Intel and other large chip-makers will move into this space with
tailored products, or be looking for acquisitions in it. Dedicated appliances
could become a reality as well as systems built for the cryptocurrency space -
in all price brackets. Similar to Google's Search Appliance.

15 - Old financial institutions will lower their fees, or improve their
services as enabled by present cryptocurrency technology to be implemented.
Consulting firms will seek solutions in this space to sell to banks and
financial institutions.

16 - There'll be a bitcoin-related IPO. One of many to come. New asset classes
and mutual funds will arise that expose investors through conventional means
to cryptocurrency based instruments.

17 - A meme like Dogecoin can spread to zombies. For better or worse, look
out. But, other countries will create their own language coins equivalent to
Doge, perhaps by governments, which they will premine for themselves. And
governments will want software to do that. So too with corporations. 2014/15 -
the year of the premined, forced alternative.

