A new report from Juniper Research has found that the value of all cryptocurrency transactions will fall sharply this year to just over $30 billion, compared with over $71 billion in 2014.
The report, ‘The Future of Cryptocurrency: Bitcoin & Altcoin Impact & Opportunities 2015-2019,’ claimed that the decline was attributable to the combined impact of exchange collapses, Bitcoin theft, and regulatory concerns around cryptocurrency’s role in funding dark web purchases.
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According to the report, the surge in Altcoin transactions in 2014 was overwhelmingly attributable to brief spikes in activity during the first quarter in Dogecoin, Litecoin, and Auroracoin. By the end of the year, daily dollar values of these transactions were at less than 5% of their earlier peak.
Regulated Exchanges ‘Could Stabilise’ Bitcoin Values
However, the report argued that the introduction of licensed, regulated exchanges could lead to a stabilisation in currency values and with it an increase in retail transaction adoption. It pointed out that in an unregulated marketplace, consumer confidence had been eroded by the demise of the Mt Gox exchange in February 2014 and the recent theft of nearly 19,000 Bitcoins from BitStamp hot wallets.
Nevertheless, despite the fact that PayPal has now begun to allow US consumers to purchase digital goods via Bitcoin, the report argues that the scale of the challenges facing Bitcoin is so great that it will struggle to gain traction beyond a tech-savvy and/or libertarian demographic.
Real Time Transaction Settlement Opportunity
Instead, it identifies a longer term role for cryptocurrency protocols in the wider payment space. According to report author Dr Windsor Holden: “It is likely that we will see the technologies behind cryptocurrency deployed in areas such as real-time transactional settlement. Ripple Labs is already focusing overwhelming on that approach and in the medium term we may see a role evolution to this end amongst other cryptocurrency players.”
The whitepaper, Will Bitcoins Bite Back?, is available to download from the Juniper website together with further details of the full report and the attendant Interactive Forecast Excel (IFxl).
About Juniper Research
Juniper Research was founded in 2001 by the Wireless Industry Consultant Tony Crabtree, in the midst of the telecoms and dot-com crash. The business was fully incorporated in February of 2002 and has since grown to become one of the leading analyst firms in the wireless sector.
Juniper specialises in identifying and appraising new high growth market sectors within the mobile ecosystem. Market sizing and forecasting are the cornerstones of our offering, together with competitive analysis, strategic assessment and business modelling.
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