What is the future of Bitcoin?

We don’t know how the Bitcoin economy will grow in the coming years, but there are two broad theories.

The optimistic view is that over the next decade or two, Bitcoin will have the same kind of transformative effect on the financial system as the internet had in the telecommunications industry during the 1990s and 2000s. Bitcoin supporters argue that the openness of the Bitcoin platform will allow a wide variety of innovators to provide financial products and services, leading to faster, cheaper, and more reliable payments, and perhaps new types of financial services that aren’t feasible using existing financial networks.

The pessimistic view sees Bitcoin as being of little value, and predicts that it will have only a marginal impact on the global financial system. In this view, the alleged weaknesses of conventional financial networks — its centralization, strict regulation, and slow pace of change — are actually virtues, because they protect consumers from scams, volatility, and other headaches.

Critics also say that Bitcoin doesn’t solve any problems ordinary users actually have, and that disadvantages such as the currency’s fluctuating value and its propensity toward scams will make it unappealing to the vast majority of ordinary customers.

So who’s right? We’ll have to wait a few years to find out. The key question is whether someone is able to build compelling bitcoin services that push the technology into peoples’ lives the way the web helped the internet go mainstream in the 1990s. In late 2015, seven years after Bitcoin was created and after three years of lavish investments in Bitcoin startups, Bitcoin hasn’t had a breakout hit. The pessimists have more reason for confidence than they did a couple of years ago, but the jury is still out.