The volume of cryptocurrency transactions are presumed to face a 50% steep fall by the end of this year, according to a recent report of Juniper Research.
The study, authored by Dr. Windsor Holden, brought out several factors to prove its pessimistic conclusion. It credited Dogecoin, Litecoin and Auroracoin for inciting an overwhelming transaction volume during the first quarter of 2014, but at the same time mentioned a 5% dollar value drop in all these transactions by the end of the same year. Somewhere between the lines, the report stressed that such drops might extend to about 50% by the end of 2015.
The report came at a time when many of the world’s leading retail merchants are already accepting Bitcoin payments. However, the study believes that the scalability of cryptocurrency technology is so limited that it only appeals tech-savvy and/or libertarian demographic – nothing beyond that. In simple words, the growing merchant adoption never solves problem until and unless user adoption rises coherently as well.
Value Instability, a Hurdle
Dr. Holden described a multitude of factors before concluding his prediction. For instance, he thoroughly argued that the introduction of regulated, licensed exchanges could ever bring stabilisation to the cryptocurrency economy – another reason why users will prefer to keep a distance from using virtual currencies like Bitcoin. We could always notice the deteriorating health of cryptocurrency markets post Mt. Gox and BitStamp incidences.
Cryptocurrency Protocols Will Stay
The report however predicted a steep growth for Bitcoin when it comes to considering it as a protocol to improve current payment technology.“It is likely that we will see the technologies behind cryptocurrency deployed in areas such as real-time transactional settlement,” said Dr. Holden. “Ripple Labs is already focusing overwhelmingly on that approach and in the medium term we may see a role evolution to this end amongst other cryptocurrency players.”
Image from Juniper Research