Bitcoin survival relies on community ‘growing up’

Summary: According to security experts, the cryptocurrency community needs to grow up in order to thrive -- and become more like the establishment it originally tried to break away from.

ISLE OF MAN The cryptocommunity needs to "grow up" if Bitcoin is going to flourish, according to a prominent member of the security community.

Interest in Bitcoin exploded after the 2008 recession. In 2012, there was a sharp rise in Bitcoin-based merchant services. Since this time, the cryptocurrency has become monetized due to rising demand, which peaked last year at over $1,000 for a single BTC. Many attempted to cash in, but the price fell by over 50 percent following the decimation of major Bitcoin trading post Mt. Gox.

Despite this, faith in virtual currency remains strong but could the lure of cryptocurrency's unstructured and unregulated system also be its undoing?

There are endless possibilities for cryptocurrency, and this is not limited to Bitcoin. Litecoin, Dogecoin and Peercoin to name but a few are also in the mix, and many individuals and businesses are working out how virtual currency will fit in to our future. Traditional financial institutions may underpin transactions using virtual currency, more individual power and privacy could end up in the hands of consumers, and underdeveloped nations may be able to use crypto to circumvent corrupt governments or to allow for easier payments and reduced transfer costs where traditional economies are volatile.

Bitcoin may have had its name tainted by association with underground marketplace Silk Road, but virtual currency's story doesn't have to end there.

Bruce Elliott, anexecutivefrom financial services firm Boston, told attendeesat the Crypto Valley Summit on the Isle of Man:

Bitcoin for us is a nice thing and a nice way to make money. For others, it's a matter of life and death and a way to transform their own lives [...] and control their own destiny.

In short, Bitcoin is more than a "scheme," as a recent report issued by the Bank of England implied.Within the report, the financial institution said that while Bitcoin had the potential to "disrupt monetary policy," the inherent volatility of the currency means crypto is not a threat to traditional currency and the "small size of such schemes" leaves virtual currency outside of the bank's notice.

However, in order for virtual currency to succeed, more is needed than ideas, glue and tape. Major ingredients including investment, security and regulation may also be necessary.

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Bitcoin survival relies on community 'growing up'