While bitcoin experienced some challenges at the beginning of the year, including a hack of Bitstamp, all signs indicate that the digital currency is on track to continue gaining momentum this year.
Among the most important factors pointing to bitcoin's continued growth this year are the number of brands now accepting bitcoin as well as the number of bitcoin-based startups.
Bitcoin Continues to Grow by Leaps and Bounds
According to Fortune, there were more bitcoin-based startups launched last year than during any previous year. For instance, there were only five such startups launched in 2011. The following year, that number increased to thirteen. By 2013, the number of bitcoin startups had increased to 193 and by 2014, there were 566 such startups launched. 1
The number of mainstream businesses accepting bitcoin is also on the rise. While Overstock made big news when they began accepting bitcoin as a form of payment, they are hardly the only such mainstream business to do so. Other big names that have jumped on the bitcoin bandwagon include Dish Network, Target, Dell, PayPal, and Microsoft. As more and more mainstream companies begin accepting bitcoin, adoption of the digital currency has become increasingly commonplace. Scientific American reports that bitcoin now includes more than 1,000 merchants. Recently, Time, Inc. announced that it would be accepting bitcoin for magazine subscriptions.
In addition to gaining momentum in the United States, bitcoin is also gaining traction in emerging markets. Forbes reports that approximately 65,000 bitcoin transactions occur on a daily basis. Furthermore, there are now about 13 million bitcoins in circulation on a global scale.
Bitcoin offers a number of significant advantages in developing markets, where other financial systems often result in consumers incurring high service fees.
Increasing Awareness and Education of Bitcoin
As bitcoin continues to gain traction, 2015 has been labeled by many as a make it or break it year for bitcoin. While the digital currency has made significant strides, there is still much work to be done. The Guardian reports that 65 percent of the general public remains unfamiliar with bitcoin. Furthermore, among those who are aware of it, 84 percent have not actually used it. Ultimately, the key to whether bitcoin will be able to become a serious alternative to traditional currency will likely rest in its ability to be accepted by mainstream users.
One study found that many people were refraining from investing in and using bitcoins due to security concerns. While that may be the case, a number of bitcoin startups launched during the past year are focusing specifically on security. For instance, BitGo, a storage wallet, utilize a multi-signature authentication process. Authy, yet another bitcoin startup, is working with other firms, including Coinbase, to offer two-factor authentication.
A new multi-faceted campaign launched as part of a partnership between several bitcoin companies is also now geared toward increasing business and consumer awareness of bitcoin. The campaign will utilize both social media and traditional marketing messages to educate the public about bitcoin.
Now that the first US bitcoin exchange has opened, the cryptocurrency is gaining momentum toward becoming mainstream. The Winklevoss Twins, who have been long-time supporters of the virtual currency have said that they plan to do just that by creating what they have referred to as the Nasdaq of Bitcoin. Together, the brothers have hired top engineers and enlisted the assistance of a bank with the sole purpose of opening a regulated exchange.
Will bitcoin become even more mainstream this year? While the digital currency does still have ground to cover in terms of gaining awareness among consumers, it does certainly appear to be on track to continue gaining momentum in the coming months.
1) Fortune. Why bitcoin is poised for big momentum in 2015.