With Bitcoin breaking investment records every day, we take a look at the future of cryptocurrency and blockchain

Bitcoin is exploding. Just today, the cryptocurrency expanded so quickly that the world’s top marketplace, Coinbase, was overwhelmed by the traffic.

In the decade since its invention, Bitcoin has transitioned from being an experiment to a proven concept. Well known and established services for Bitcoin purchase and exchange (like CEX.IO, Coinbase, Kraken) are becoming mainstream portals.

Now, entrepreneurs and businesses are starting to find real, profitable applications for bitcoin and its underlying technology — blockchain.

Let’s take a look at some new ideas from innovative startups, and also how bitcoin is being incorporated into more traditional business models.

Bitcoin startups

While blockchain is experiencing a moment of popularity, the tech has a long way to go, meaning the market is wide open for new companies and ideas. It’s still not clear what bitcoin’s best use cases are, but startups are already having great success with remittance and international money transfers.

The remittance market is worth half a trillion dollars and at the moment is slow, expensive, and inefficient — all things bitcoin has promised to help out with.

Startups like Abra, Bloom Solutions, Coinpip, and Bitspark are trying to provide a faster solution for a fraction of the price. They plan to do this with some creative applications of bitcoin and blockchain technology.

It won’t be easy though, with many regulatory and scalability obstacles to overcome. Also, the consumer base can be wary of new technologies promising cheaper international transfer rates. There have been many scams and problems in the past, and any bitcoin startups will have to prove themselves trustworthy in the long term.

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However, if these startups pull this off, it could be a serious shakeup for the big banks and finance companies. Banks make hundreds of millions in profits from transaction fees on international transfers — all of which could be at risk.

Companies now accepting bitcoin as payment

The deal-focussed e-commerce startup Overstock was the first major online store to accept bitcoin as a form of payment.

Since then, retailers of all sizes and kinds have followed, including big names like Microsoft, Steam, Dell, Expedia, and CheapAir. These companies are taking advantage of the low transaction fees associated with bitcoin.

It’s even possible to order food with bitcoin!

This form of payment is great for people in countries that do not have easy access to banking, or where international payments are difficult. This could lead to a snowball effect, with more available vendors leading to more people using bitcoin overall.

Bitcoin payment platforms

Payment gateways like BitPay are helping businesses all around the world accept payment in bitcoins. They offer a service that lets customers pay for any goods or services quickly and easily with bitcoin.

What is more is these businesses receive payment in the currency of their choice, so there is no risk associated with bitcoin price volatility. This is the type of service that is helping bitcoin to become a legitimate, day-to-day currency.

Stripe is another major payment company that has integrated bitcoin into its services. Stripe lets eCommerce stores add bitcoin checkout with just a couple of lines of code and a 0.8 per cent fee transaction that caps at US$5.

Alternative uses of the blockchain

The blockchain is an immutable, distributed ledger that can do more than just process payments. In fact, applications can be built on top of it to provide all sorts of other services.

This ‘second layer’ of bitcoin apps could be the key to making cryptocurrency technology scalable and usable worldwide.

An example of this in action is Factom.

This open source project is described as a publishing and auditing engine. It allows users to publicly publish information to the blockchain that can never be changed. This has all sorts of possible applications in areas that require a lot of trust and coordination such as asset trading, proof-of-publishing, and security systems.

Distributed marketplaces

Blockchain is the technology that underpins bitcoin, and entrepreneurs are finding new applications for it all the time. Mostly, developers are finding ways to cut the middleman out of different marketplaces.

OpenBazaar does exactly that. It is a competitor to eBay or Amazon that uses bitcoin and blockchain to offer a peer-to-peer online marketplace with no fees and no restrictions. It sounds crazy, but it really works.

The software is open source, so anyone can contribute to it, and there is no central server or controlling body that can manipulate things.

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Its developers have already received US$4 million in funding from investors, and the marketplace has over 10,000 listings. However, it will be awhile before it has the features and widespread adoption to compete with eBay.

More likely, the technology will be used to integrate with other services and platforms.

Other blockchain applications

For the first time, the blockchain technology itself is generating more excitement than bitcoin.

Storj uses blockchain to provide distributed cloud storage. It is a solution that keeps users data encrypted and private at all times, unlike big cloud providers such as Amazon.

It also claims to have higher data availability and lower cost than other storage providers. Storj was originally built to work with the bitcoin blockchain, but has recently started transitioning to using the Ethereum blockchain due to scalability issues.

Will it last?

Bitcoin and blockchain still are not accepted or understood by most consumers and businesses in the world.

We are in an exciting time right now where anything can happen but there is a good chance many of these startups won’t survive the volatile bitcoin landscape.

But, decentralization is disrupting many industries, and some are sure to profit wildly from these changes.

It is like building a town. Ten years ago, settlers decided this piece of land will become a city. Today, a Main Street has been built and people are wondering if it will become a major city — or a ghost town.

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