In a recently published report, Juniper Research is somewhat bearish on the Bitcoin ecosystem’s prospects for growth in 2015.
Juniper Research is a UK-based communications research and consultancy company. It covers various areas in emerging technologies with a focus on mobile and increasing interest in cryptocurrencies.
The report is titled, “The Future of Cryptocurrency: Bitcoin & Altcoin Impact & Opportunities 2015-2019.” One of its main claims is that the dollar value of bitcoin transactions will more than halve from $71 billion last year to $31 billion this year.
While at face value, the claim paints a gloomy picture for Bitcoin’s future, it should be noted that the claim also implies that the quantity of transactions will remain roughly the same.
The average price for bitcoin in 2014 was roughly $550, or 2.5x higher than the current rate. Their prediction sees dollar-based volume declining by a similar factor (2.36x), implying a similar transaction quantity.
If true, this still isn’t such a good news story for the ecosystem, which should be growing by leaps and bounds if it is to one day gain prominence. In addition, dollar-based volume does matter, since dollars are still the base metric for measuring economic value.
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The report also points to bitcoin’s struggling price, which is over 75% off last year’s high. It summarizes the causes as follows:
“The decline is attributable to the combined impact of exchange collapses, Bitcoin theft and regulatory concerns around cryptocurrency’s role in funding dark web purchases.”
Right now, the report says, Bitcoin has gained traction mostly with a tech-savvy and libertarian demographic. It would have to expand its adoption beyond this genre in order to reverse the current trend.
The report also points to the beginning of 2014, when there were brief spikes in transaction quantity among altcoins like Dogecoin, Litecoin and Auroracoin. The hype surrounding them waned throughout the year, the end of which saw their transaction count at less than 5% of that from the beginning of the year.
The report was more upbeat about the future of blockchain-related technology, which can be “deployed in areas such as real-time transactional settlement.” One example is Ripple, whose protocol has already been adopted by several banks. “Ripple Labs is already focusing overwhelming on that approach and in the medium term we may see a role evolution to this end amongst other cryptocurrency players,” the report added.
There has been a growing consensus toward the latter point even amongst diverse camps in the cryptocurrency debate. Last week, however, leading Bitcoin advocate and technology expert Andreas Antonopoulos expressed an uncompromising perspective, saying that Bitcoin’s technology and currency work hand in hand.