There is always speculation when it comes to the bitcoin price. The fact is, however, that you cannot predict the Bitcoin and other Altcoin prices because none of us can look to the future. What is possible, however, is to compare an analysis of the current blockchain technique and the price of a crypto currency with the current value, because the price always adjusts (more or less) to the actual value.
Value of cryptocoins
Now with crypto currencies it is very difficult to determine the actual value of a coin. This can be caused by a lack of information, deception, insufficient technical knowledge or simply by false statements. Therefore, it is always important to do your own research on the individual coins and not to be irritated by third parties. A nice shortcut gets to the point: DYOR (Do your own research)
So how do we determine a value? It used to be very simple. Take, for example, the company XY, which owns buildings, vehicles etc, i.e. material assets. If the number of these assets increases, the value of a company also increases. (Of course there are not only material assets, here only as an example) Now with Bitcoin this is relatively difficult, because Bitcoin has no material assets except the Miner. So nothing to “touch”, nothing material.
Here too, there are not really many tangible assets that could contribute to the increase in value of the company. The “Facebook” platform, however, is of enormous value. Thus, one is forced to revise the value determination of a company and to incorporate the virtual technologies into the value determination.
If you now see these technologies and their benefits, it is only possible to determine their value. Now the question: Which technologies will Bitcoin 2018 bring this increase in value?
Bitcoin Lightning Network
To understand the lighting network, we have to start with the Bitcoin network. That is, the fact that this is a broadcast network, which means that each node must receive, validate and store each transaction. There is a point to this, but it is obviously terribly ineffective.
Imagine yourself: A group of students have to solve 5 math problems together, and each calculates all five tasks. The first person to correctly complete the tasks is rewarded. However, since this system is very time-consuming, a bitcoin transaction from sender A to receiver B takes relatively long. In addition, the Bitcoin blockchain is predefined and cannot be changed, i.e.: Bitcoin is not scalable.
The lighting network scales super
The lighting network, which is the subject of the following section, is now eliminating precisely this problem. It forms a network of payment channels that only sends a transaction from the person who sends it to the person who is to receive it. That means, if I transfer money to Martin now, it does not have to be stored on every node in the Bitcoin network, but basically only on my and Martin’s node. This eliminates some serious weaknesses of bitcoin with a single stroke:
- Privacy: With Bitcoin, everyone notes what everyone does. Blockchain analyses are possible and massively impair privacy. However, if everyone only reads and stores the transactions that are important to them, the blockchain reveals nothing about other people’s money.
- Speed: A bitcoin transaction can be seen almost instantly, but is only confirmed after a few minutes to an hour. Until then, it is possible to reverse the transaction. With the lighting network, on the other hand, transactions are instantly valid.
New technology = increase in value
If one now sees these enormous advantages, which the Lightning network brings with itself, I see with Bitcoin a clear increase in value and besides the use of the Kryptowährung increases. As described at the beginning of this post: The price always adapts to the value of a company / technology. Therefore I am sure that Bitcoin will aim for two prices in 2018: $5,500 and $55,000.
Why $5,500: At the beginning of the year there is always a drought in the crypto area. There are many reasons for this: Taxes to be paid, panic selling, correction, etc…. (I will publish a post of my own for this purpose) Therefore I see this as the “lower limit” of Bitcoin in 2018.
Why $55,000: As already explained in detail in this post: The Lighting Network.