2016 - THE YEAR OF AWAKENING Bitcoin

Winnie Lingam (Vinny Lingham), founder of the platform last souvenir of electronic cards Gyft, and now CEO of Civic.

This article Linga explains why he believes that bitcoin price will continue to grow, even if you do not pay attention to the fact that this year bitcoin platform revenues doubled. This text is followed, it is widely known, a negative outlook in 2014.

After reading my article, released in March 2014, you might think that I am too negative opinion about bitcoin - it seemed to me that because of the lack of a strong structure, bitcoin exchange was carried out randomly.

While most people in the user environment, felt that bitcoin will repeat his record in 2013, rising to $ 1,255, and may even be over the mark of $ 2,000. When I talked to CoinSummit 2014 conference participants, almost no one had any doubts about it. But I had my doubts, and it came from a man who only a year earlier had predicted that the bitcoin prices reach $ 1000 and he was right.

If we look at my previous article outlines, there are several specific points:

• Distrust cryptocurrency would limit the purchase bitcoin.

• Bitcoin - this is not the currency, but rather the type of product (more recently, many organizations also began to think so, including CFTC).

• Bitcoin lost momentum and initiative (it was fall time, rather than growth).

• The slow pace of bitcoin spread among the bulk of consumers (this tendency still exists).

• Introduction of bitcoin among suppliers is much higher than the rate of use among consumers.

• Terms and Conditions bitcoin mining were under great pressure, which led to the need to sell a growing number of bitcoin.

• Platform seriously lacking "smart contract".

What changes may occur in the technology world for 25 months? If we analyze the items listed above, we will immediately become clear to many changes:

• Bitcoin is growing rapidly.

• Proportionally, the pace of implementation of bitcoin suppliers compared with the rate of use by consumers swapped.

• production conditions are much more favorable in comparison to the previous year.

• Such expressions as "smart contract", "blokcheyn" and the system as a well-known steel etherium terms.

• A variety of exchanges and exchange platform now enjoy greater trust from consumers. For example, the platform Bitstamppoluchila support and legislative powers of the European Union, as well as Coinbase, Kraken, Circle, BitX and others.

headwind

Based on my previous statements about the growth of prices, I believe that the headwinds that have slowed the growth of bitcoin have passed, and this year, its price will rise to almost $ 1,000. And as you can see from the title of this article - there was an awakening bitcoin. For a whole year I have often hinted at some tailwind for bitcoin, and now some of them are gaining strength. Therefore, I would like to summarize some of these statements by breaking them into three main points:

Using bitcoin in the industry comes forward

More than ever, investors invest in opening new bitcoin companies. Their overall contribution has already exceeded one billion dollars. These companies are developing blokcheyn system in the spheres of industry, where before the use of such methods was simply impossible or would not be an advantageous step in terms of benefits.

The financial sector makes a significant contribution, in what they call "blokcheyn". But at the same time, all possible methods, avoids the use of bitcoin. I personally think that as soon as they will have security problems in this area, they immediately changed their attitude. Although, in spite of this, many foreign banks have already been studied and used bitcoin blokcheyn, while improving its own methods of financial transactions.

I think we should accept that we live in a world where the "chain" includes many other "chains". Bitcoin can not be led by ever financial chain, but it is likely to become the main platform for intermediary operations between different areas.

Short selling (or selling without cover)

From my point of view, the main reason for a sharp rise in price of bitcoin is what I call "short sales (or sales without coverage").

This problem occurs when people are selling assets abruptly realize that the price they flew up, and they urgently need to buy these assets back to avoid further financial losses.

In the world of bitcoin, this situation may occur due to several scenarios.

Traders and speculators who have decided that the price will continue to fall bitcoin, bitcoin can take a loan on the exchange, and then sell them, hoping that the price will fall further, which will allow them to buy back at a lower price, twirling with a small profit.

People, mining bitcoin, usually changing them into other assets. But the day will come Halving.

Halving Day - the day when the number of blocks reaches a certain number, and remuneration for one block are divided into two (eg 25 for the BTC block to 12,5 BTC). It is expected that this will happen in the beginning of July this year.

This creates a problem for people, bitcoin mining, if they earn by borrowing for resale, hoping to repay the debt after Halving. If they do not have a stock of coins, they will be forced to buy bitcoin on the open market, without having time to replenish their prey.

It is like to trade in wheat, only the future of the market, and then suddenly swooped hurricane and destroys half the crop. Theoretically, the only way to avoid this is if the price doubled on the day Halving (which will not happen).

Because traders bitcoin limited (meaning that they can be resold only a certain part of the created bitcoin) of this significantly reduced liquidity, and sharp jumps as 50% less than the fee for a block, will lead to more tangible results than previously assumed that the cause a crisis.

To some it may seem that such a scenario has already been provided, but in fact it is not. The reason is that the cost per unit per day upolovinikaniya be repeatedly and rapidly changing. Merchants and miners it will create instability and explosive situation. Also still unknown true rate of deflation bitcoin. I'll explain it further.

The present inflation and nominal inflation

Bitcoin is designed as a deflationary currency. Full supply of currency is 21millionov, a figure that will never change. Now turnover is about 15,500,000 BTC and about 3,600 new coins are produced every day, or somewhere 100,000 coins per month. This amount is equal to the nominal inflation (proportional to the total stock), approximately 8% per year.

On the day of Halving this figure will fall to 4%. And if it is so?

If we assume that 4 million BTC will not disappear in the near future, whereas in the current turnover is approximately 12 million units (based on the number of units available for today). Given that we produce close to 100,000 units per month, while real inflation bitcoin is not 8, and 10% per year. Because of this, when the day of separation, the real inflation rate is equal to 5%.

Based on the research of John Ratcliffe (John Ractliff), I would like to create a real idea of ​​the bitcoin inflation. Based on some of the facts that should be only 25% bitcoin is not in constant circulation (lost in stocks, Satoshi, etc.). This is true even if we assume that Craig Wright (Craig Wright) is Satoshi (which means it will not take bitcoin in circulation until 2020). All numbers are rounded.

• In 2014, the nominal inflation bitcoin was 10.3%, while the real was 15.5%

• In 2015, the nominal inflation bitcoin was 9.3% and the real was 10.1%

• In 2016, the nominal inflation bitcoin will be 6.4% and the real inflation of 8.7%

• In 2017, the nominal inflation bitcoin will be 4%, and real inflation of 5.3%

Curiously, the inflation bitcoin takes a slightly different form than inflation in the usual sense of the word. It lies in the fact that prices will not grow out of the fact that the government print more banknotes. Prices are rising because of a lack of reserves bitcoin (supply and demand).

Note that the real inflation bitcoin fell by two-thirds over the past three years. This means that in order to turn left at the current level for bitcoin will need to find a new point of balance price.

It seems to me that such payments were not properly taken into account in setting the market price of bitcoin.

Coming arms race

Over time, when it becomes clear that bitcoin is a strategically important asset, this will lead to so-called "arms race."

At this time, the capitalization of bitcoin on the world market of $ 7 billion, which is quite enough to motivate state structures in the purchase of large amounts of currency. But if bitcoin will begin to spread rapidly in the global market, he gains strategic importance for the state. I believe that this will lead to a kind of race for digital assets.

Imagine if China suddenly bitcoin buy in large quantities, you think other countries will just calmly look at it? But I do not think so, according to my forecasts, by 2017 it will become the largest buyers of government bitcoin that will significantly increase the price.

Of course, anyone can do all sorts of vague forecasts. I wrote this article to show that now accompanies bitcoin tailwind.

I do not know whether the price will rise to $ 1,000 or even $ 10,000, I just know that it is growing. If I was to give a quick assessment, I predict that the price will rise slightly more than $ 1,000 in 2016 and more than $ 3,000 in 2017.

I am very interested to see how things will actually!