Global currencies are always evolving. For example, the dollar was once backed by the physical commodity of gold. This meant that you could take dollars to the government and exchange them for gold. Nixon changed this in 1971 when he announced that the dollar would no longer be backed by gold. Instead, the full faith and credit of the federal government would support the dollar. The rise in popularity of Bitcoin has created a form of currency that now rivals fiat money, especially as we move into the age of technology. It is not backed by gold or any government or bank and allows for complete anonymity.

Research shows that the number of active Bitcoin users can approach five million by the year 2019, with fifty-one percent of users being outside of the United States. The biggest key to this currency is that it allows for inexpensive and quick online transactions without going through the traditional banking channels. For this reason, one of the bigger obstacles for the public is accepting Bitcoin as a safe venture. Bitcoin is self-regulating. New coins are issued at the pace of the miners who produce the coins. Bitcoin has garnered some mainstream success with companies like Microsoft, Dell, and Tesla, as each company has adopted the currency for use by its customers.

Bitcoin is also an accepted form of currency in many different countries as well. This rising popularity is giving it more potential to be a favored global currency, one that is not tied to any one country or bank. If use of Bitcoin continues to rise at its current pace, researchers expect it to be the sixth largest reserve currency in the world by 2030. This possibility of Bitcoin unfolding as a new global currency becomes even more interesting when you consider that China has recently been pushing for a new currency. The recent economic downturn in the US caused the dollar to fall, so China is seeking a new currency that is not directly tied to the American dollar and its banks. Bitcoin appropriately falls into that category.

The nature of Bitcoin has the potential to be a game-changer with our old-line banking system. While banks are required to have cyber-protections in place, they are still susceptible to hacking attempts and malicious phishing. Cryptocurrencies such as Bitcoin, however, use cryptography to make transactions more secure and prevent the creation of additional units of the currency. Although not completely free from hacking risk, these encryption methods are continually getting stronger, allowing for better-protected transactions. As these encryption methods develop, Bitcoin will be in an even better position globally.

In the meantime, U.S. regulators recently ejected a proposal for a Bitcoin Exchange Trading Fund in March 2017. Uncertainty surrounding Bitcoin, particularly on institutional and governmental levels, is the largest obstacle to mainstream adoption of Bitcoin as a global currency.