Bitcoin is used as a currency in some stores, even though it doesnt have the backing of a central bank or government.

Bitcoin has come a long way, from a mysterious and controversial crypto-currency to a widely known medium of exchange.

Although faced with occasional challenges (such as the MtGox bitcoin heist, Silk Road incident or Chinas regulatory stance), the bitcoin community remains unshaken, showing a surprising amount of resilience and trust in the digital currency.

As time passed, many new altcoin variants (alternatives to bitcoin) have sprung to life, the most notable of which are Litecoin and Peercoin. Litecoin is advertised as faster and more efficient, and Peercoin uses the concept of proof-of-stake, which means you gain Peercoins based on the amount of the currency you hold and not on your computers processing power, as is the case with bitcoin.

Bitcoin this year gained enough momentum to become a market-disrupting force. More than 60,000 businesses now accept the currency (Dish Network DISH, +1.33% joined in August), and the value of venture-capital investments made in bitcoin jumped 28% in the second quarter from the first quarter.

So what will be the trends, and challenges, in the years ahead?

Bitcoin may become a new Western Union: This is what one Reddit user said:

Bitcoin and Circle just solved my remittance problem. I live in Belarus, people. I receive my salary here, in a local bank account tied to a debit card in U.S. dollars. One of my big problems is transferring my salary back to my U.S. account with minimal fees so that I can make payments on student loans and such.

With Circle, I can now send any amount of money to my Coinbase account to be withdrawn to my local bank account with negligible transaction fees. This is a game changer, folks. I dont care if bitcoins value drops to $0.10; its now the only way Im going to be transferring money.

Alternative currencies are disrupting the way money transfer is handled worldwide. With services like Circle, money transfers are now becoming instant, secure and free as they should be.

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Your Digital Self: Why youll finally be using bitcoin soon