If 20 years ago someone said that in a near future we would have an absolutely new currency, only a few of us would’ve believed those words. Now, when we are witnessing the rise of the bitcoin,which can also be named as the biggest revolution in the whole finance sector in the last hundred years, most people around the globe still stay skeptical. However, economists and experts, as well as investors, are excited about this phenomenon.European Business looks into the phenonenem.

Yes, bitcoin truly is a phenomenon, as it has no government, and yet, is a currency. Some are even calling it “e-cash”, and that is suitable, as bitcoin is purely and absolutely digital. Founder and chairman of the X Prize Foundation, Peter Diamandis, described bitcoin as “a smart currency, designed by very forward-thinking engineers. It eliminates the need for banks, gets rid of credit card fees, currency exchange fees, money transfer fees, and reduces the need for lawyers in transitions… all good things.” And we couldn’t agree more, although some people may need a little more time to establish confidence in it. However, isn’t that a case with all disruptive innovations around the globe? Besides reaching an absolute investment craze with a $10,000 price, bitcoin’s value has moved up to 11 million percent in the last five years, and its total value increased to 100 million dollars, which stands for the last 12 months’ growth to an unbelievable 600 percent. As numbers speak for themselves, some critics tend to stay suspicious and call bitcoin “a bubble of all bubbles”, referring to the fact that it’s not the only digital currency out there, and has no internal value after all.

The biggest question is bitcoin’s sustainability now, and almost everyone is wondering what will happen with the bubble in the long run. Looking from the most general sense, it’s pretty easy to clone or improve bitcoin’s technology. However, this cryptocurrency shows an extremely strong lead in credibility right now, which is a meaningful factor. The process also strongly depends on government’s position and consideration on whether they are going to tolerate the so-called “anonymous payment systems”. Experts say that it’s one thing to allow small transactions with digital currencies, but collecting taxes or measuring criminal activities can become quite tricky. Another important question related to bitcoin’s sustainability, is what would happen with its price if governments would be able to observe all digital currency’s transactions? Such transactions now happen extremely fast and overall fees, if compared to traditional billing instruments, reach just a few cents, which makes it the fastest and cheapest international transaction out there. Experts say that in this case, bitcoin would still beat the 2 percent bank’s charge on cards, although some improvements would be needed.

Analysing bitcoin’s behaviour in the past few years, Sax Bank’s analytic, K. V. Petersen, saw it coming: the incredible rise of the cryptocurrency for more than 165 percent. At that time many were surprised and even more skeptical by such forecast. Now Mr. Petersen says that it is very probable for bitcoin’s market capitalisation to overcome 1.75 trillion dollars in the next ten years. Interestingly, bitcoin is actually considered a limited currency, and only a certain number of 21 million units will be released. It is predicted that this number will be reached by the year 2140. Experts say it is very likely that we will see the rise of 2 or 3 other cryptocurrencies which will take place in the market, and even so, bitcoin will still remain the most popular one simply because of being the first, as well as demonstrating an amazing effect of prevalence.

Having the biggest perspectives, bitcoin is also a currency that brings certain threats to world’s economy. Many countries and governments are afraid of bitcoin because it has enormously high levels of competitiveness potential, which can also cause some serious damage to states’ sovereignty. You may ask, how is that possible? Well, simply by displacing national currencies out of the market. Central banks of the biggest governments note that if bitcoin starts to compete with traditional regulative amounts of money, that can decrease the whole efficiency of money politics. Along with bitcoin’s rising value, it is possible to witness deflation in the real market, and if the digital currency started to fall in price, it would cause a quick devaluation of currencies.

However, although there are many different opinions about bitcoins and whether they will pass the test of surviving, investments to Tesla, Snap or Uber also tend to be called risky and even unprofitable, as investors are losing money with them. Clearly, sometimes no match between the necessity, usefulness or project’s ability to raise money can be found.

This also means that there’s no need for skeptics to treat bitcoin as something that definitely has no future. What is more, it already caused a sensational value increase of electronic commodity, and as bitcoin investors are raising and constantly improving the technology behind it, bitcoin is improving and becoming even more fashionable day after day, as well as more interesting and relevant for financial institutions and even governments.

When you look at it, the whole bitcoin’s system resembles a financial pyramid in some way, which can work effectively as long as there are people interested in its existence. And how can there not be when such factors like the economic status of the state, currency wars, devaluation and even politics have no power to influence bitcoin? This is why investors keep coming back. It attracts. Clearly, bitcoin is alive just because of its unconditional trust and belief that it will rise in price. Even chances of sudden changes cannot frighten investors, and day after day we are witnessing a new era of bitcoin’s flourishing. Well, some people simply love the fact that they can be absolutely free and independent of everything, and as bitcoins can actually provide this opportunity, they gladly take it. That’s why, when talking about bitcoin’s future and its sustainability, the chances are in favour of seeing this digital currency phasing into the mainstream and reaching the tipping point.