Bitcoin’s blockchain is a decentralized ledger whose security depends on miners upholding the network with their systems. Miners are rewarded for their work with Bitcoins, keeping these group of miners motivated and by extension, keeping the network secured.
However, the block subsidy given out to miners has an expiry date, and there were fears developing that Bitcoin’s security may be under threat after the subsidy runs out.
Tamas Blummer, Bitcoin Developer, commented on the situation and suggested that the direct use of the Bitcoin blockchain would be “ridiculously expensive” in the future.
Now, Tuur Demeester, Founder of Adamant Capital, has put forward a relevant comparison as to where Bitcoin could be headed in the future.
Demeester stated that Bitcoin’s present situation resembled crude oil, as the natural resource is scarce in nature. He said that in the 1860s, advantages of petroleum had to be explained to skeptical buyers as users were very wary of its use, just like Bitcoin.
The popularity of petroleum exploded as exports rose from 40 barrels to 25 million barrels over two years. The price of petroleum, like Bitcoin, was also extremely volatile in its early adoption days when the market was first being established. Prices in London for instance, fluctuated between the value of 5 and 30 pence a gallon.
Demeester outlined the entire scenario by stating that there were a lot of “possible parallels” between Petroleum and Bitcoin. Both entities took years to be identified as potentially major economical factors. Both of them faced early infrastructure issues and outright growth was evidently slow.
However, both exhibited the same characteristics of rapid adoption, after implementation and popularity reached its tipping point.
Demeester cited this example to suggest that Bitcoin would not lose its significance when block subsidy dies down as with time, Bitcoin would be more understood and refined as an virtual asset and solidify its stature as a valuable asset.
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Biraajmaan is an engineering graduate who is exploring the ever-changing crypto verse while traversing his passion for cryptocurrency news writing. He is a Chelsea fan and a part-time poet and does not hold any value in cryptocurrencies yet.