What will happen to Bitcoin in the next decade?

When Bitcoin was introduced to the world in 2009, it was intended to revolutionize the way people could access and control their money. But that revolution barely happened. The cryptocurrency’s tumultuous first decade was marked by scandals, missteps and wild price swings – the second was no different.

Large-scale fraud, theft, regulatory battles and more continue to make the news. It’s hard to say what will happen over the next decade, but here are some thoughts on Bitcoin’s future.

Bitcoin’s future

While its price and popularity with certain investors is important, it is critical to note that regardless of value changes, scandals and news, blockchain developments will be most important over the next decade.

Issues regarding decentralization, scalability, and security are the factors holding Bitcoin back from more widespread adoption. For the cryptocurrency to gain traction as more than a speculative investment, these concerns must be addressed. Developers are working diligently to find solutions, but for the most part they have been unsuccessful.

Decentralization

When discussing blockchain and cryptocurrencies, the term decentralization covers two aspects: who holds the majority of the cryptocurrency and where the blockchain is concentrated.

Bitcoin the Cryptocurrency

Bitcoin – the cryptocurrency – was designed to be decentralized, controlled by the public, and out of the hands of entities that would collect and control it. However, more and more bitcoins are being bought by businesses and others with the resources, slowly increasing their holdings. In 2024, the majority of bitcoins are still in the wild, so to speak – but over time, and if they continue to treat them as a speculative investment and store of value, these large entities will likely continue to grow their holdings.

Bitcoin the Blockchain

The Bitcoin blockchain was supposed to be widely distributed to the public, but because Bitcoin’s market value climbed so quickly, large-scale mining operations appeared. These farms have made it difficult for individuals to participate in the blockchain process. The farms now control the mining market, but there is something more important.

These large-scale operations command a significant amount of the network’s processing power. These businesses create pools and attract individuals seeking mining rewards, thus controlling a significant portion of the blockchain.

On April 8, 2024, 10 mining pools controlled more than 91% of the Bitcoin network hashrate, and 83% of the network’s miners belonged to three mining pools.

With so much control over the network, it’s safe to say that the Bitcoin blockchain is more centralized than decentralized. It is still a distributed ledger, but there is a possibility that several large entities may decide to exercise control.

Scalability Challenges

Blockchain scale refers to its ability to handle more or less traffic in stride. The protocol limits stubbornly enforced by the Bitcoin community and developers have prevented its blockchain from handling all the transactions that take place.

Years after its launch, Bitcoin can still only handle a maximum of seven transactions per second. On April 8, 2024, the blockchain averaged 5.18 transactions per second. Compared to other blockchains that claim the ability to process over 3,400 transactions per second, Bitcoin is beyond slow.

This issue has led to a long history of efforts to reduce transaction fees and long confirmation times. Most of these efforts have been carried out by third parties who have designed two-tier solutions, which enable scale but reduce security and decentralization.

For example, the Lightning Network, one such solution, has promised to do most of the work for the Bitcoin blockchain. The work would be done on a different blockchain, reducing Bitcoin’s security and decentralization. This was supposed to result in lower fees and faster processing times – some traffic appeared, but it was not as popular as expected.

Security issues

Security is always a concern for users and investors. Scammers, hackers and thieves continue to target people who own bitcoin. In general, decentralized financial applications and businesses that hold private keys for their customers are the primary targets. The blockchain itself remains secure, but it is the interfaces used to access keys and the blockchain that

Ransomware and scams are two of the most active methods of stealing cryptocurrency—according to some analysts, they are likely to remain the preferred method.

Regulatory developments

Following the approval of Bitcoin Spot ETFs, more investors have access to Bitcoin, which could lead to ETFs for other cryptocurrencies or digital assets. It is difficult to say which regulations will appear in the next decade because positions and legislators’ opinions can change.

For example, the Securities and Exchange Commission’s case against Ripple for offering unregistered securities ended in October 2023, with a judge essentially saying that cryptocurrency is a security when sold to institutions, but not on exchanges .

In March 2024, a judge in another case ruled that crypto insider trading on the secondary market was trading securities.

What these rulings mean for the industry remains to be seen, as the evolving regulatory environment for cryptocurrencies is likely to continue as courts set precedents over the next decade.

Halves

A halving is when the blockchain automatically cuts the block reward in half. There have been three halvings since April 8, 2024. The fourth halving is expected to occur on April 19, 2024.

This halving is likely to affect prices, as Bitcoin’s price historically tends upwards after a halving. This is thought to be due to a decrease in the available supply of unreleased Bitcoin accompanied by an increase in demand.

Halvings will continue roughly every four years throughout Bitcoin’s lifetime until sometime in 2140, each time reducing the amount introduced. With this in mind, Bitcoin’s price, all else being equal, should continue to rise over time.

The Bottom Line

Bitcoin may or may not have a future as an investment. There is no telling what will happen to its blockchain and the network that supports it in the next decade. Bitcoin—the cryptocurrency—is likely to remain popular among a certain group of risk-tolerant investors; Bitcoin – the blockchain – will likely continue to be improved by its core developers while others try to solve the issues of scalability and security.

Where the cryptocurrency and blockchain end up is anyone’s guess, but for the next decade the only thing likely is that they will both remain in the spotlight, subject to speculation and changes.

The comments, opinions and analyzes expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more information. As of the date this article was written, the author owns BTC and LTC.