There is every reason to believe that Bitcoin will continue to grow in popularity in 2020. It is becoming more accepted by the mainstream as a legitimate form of currency. This is evidenced by a recent article in Forbes magazine, the leading publication related to wealth. Here is a look at what Forbes believes will be important Bitcoin trends in 2020.
The Hype and the Halving
Everyone that follows cryptocurrency is aware of the Bitcoin halving that is expected to take place in May 2020. According to Forbes, the Bitcoin halving is a key to the possibility of a surge in Bitcoin value. History would seem to validate this position. A previous halving set up a Bitcoin bull market.
So, what is Bitcoin halving? It is a reduction that cuts in half the number of Bitcoin that can be mined every ten minutes or so. Right now 12.5 Bitcoin are created with each new block as a reward for miners. After the halving that number will be sliced to 6.25 Bitcoin.
Hype suggests that a halving will be a positive thing for the price of Bitcoin. The thing is that every investor has been looking for reasons to predict a Bitcoin bull market for a while now. There is just as much as evidence to suggest that a halving could push the price of Bitcoin down farther. Either way, for the first six months of the year you can expect this to be a hot topic among cryptocurrency investors.
Another trending topic during 2020 is sure to be the upgrades that are planned to the Bitcoin network. Three improvements are scheduled to take place as a soft fork upgrade. These are Schnorr, Taproot, and Tapscript. At this point the upgrades are still awaiting a final proposal. Action on them could happen in the first half of 2020.
It takes time to study and approve any changes that are proposed to the Bitcoin blockchain. Developers have to study the code and make sure it is ready to be implemented. Adding upgrades that are buggy can create a whole host of problems for the blockchain.
There are some issues with the Bitcoin blockchain that need to be addressed. Privacy is still a concern for many users of Bitcoin. Some would like to see Bitcoin add and embrace smart contracts similar to those used by Ethereum. Of course, scalability remains the primary issue. It deserves its own consideration as a Bitcoin trend for 2020.
Sidechains and Lightning
Scaling still presents an issue for Bitcoin even after all these years. How will the digital token ever compete with other forms of payment processing? The fact remains that the time required to settle transactions on the Bitcoin network is too high, even though measures like the Lightning Network have made limited progress in bringing them down.
The Lightning Network is used to form a sort of additional chain on top of the actual Bitcoin blockchain. It allows for the grouping together of transactions between two parties. These transactions can take place on the Lightning Network before they are added to the Bitcoin blockchain in a single group.
There is another answer being promoted, and you can expect it to get some attention in 2020. It is called Liquid. Liquid is a sidechain that has the possibility to do the same thing that the Lightning Network does with a slightly different protocol. It helps to relieve the congestion on the network so that transactions can be added faster.
Now, think about this. What if the time it takes to add a block to the Bitcoin blockchain is cut in half? Would that nullify the effect of the Bitcoin halving that is predicted? It’s something to think about.
The Big Investors Want to Play
A trend that many are expecting to play out in 2020 is the long-awaited participation of institutional investors. For years market watchers have been waiting for these guys to come off the bench and get in the game. When they do everything will change.
The SEC has helped to encourage the big capital. It has approved Bitcoin ETFs on a limited basis, and big investors are taking notice of this. Some organizations are reporting as much as $600 million in new money from investors
As for how the entrance of the big players will affect the market, who can say? Bitcoin has proven time and time again that it is one tough market to predict. That is the only trend that you can bank on to continue in 2020.
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