Bitcoin: utility will be a key price factor in 2021

According to the President and founder of the Bitcoin Association, Jimmy Nguyen, in 2021 the real utility of cryptocurrencies will become a key price factor.

Nguyen argues that, after years of hype, 2021 will be the year in which the potential of cryptocurrencies will finally be put into practice. 

The real utility will be revealed by applications that exploit the benefits of the blockchain and the public ledger, both for data and microtransactions. 

Admittedly, Bitcoin does not make on-chain microtransactions any easier, given the high fees involved, but thanks to Lightning Network it enables fast, cheap and trustless off-chain microtransactions. 

The Bitcoin Association actually supports Bitcoin SV, and not Bitcoin, so it’s obvious that Nguyen is trying to promote on-chain microtransactions rather than off-chain solutions like LN. 

The president of the Bitcoin Association also imagines that we will see improved interfaces and user experiences that will make digital currencies and blockchains easier to use, and therefore more accessible compared to what they are today. 

In particular, he says that its use will spread to sectors that process and monetize important data, such as healthcare, gaming, digital marketing, supply chain and the Internet of Things.

For example, Nguyen says that most cryptocurrency prices today are based largely on speculation, including that of BTC, and that he does not believe bitcoin is a store of value, as many others do. 

Rather, he argues that the growing interest in cryptocurrencies by institutional investors, such as hedge funds, will make 2021 the year in which real utility will become a key price factor.

The sectors that will move the prices of Bitcoin and crypto in 2021

The two sectors he cites as examples of mass adoption are healthcare and online gaming, but to be fair, these hypotheses have been put forward for some years now. 

In fact, 2020 proved to be the beginning of the adoption of crypto technology in the gaming sector, and in particular of NFTs on Ethereum, and this is a phenomenon that could boom in 2021. 

The other examples that Nguyen has also looked at, namely new social networks, or the use of the blockchain in the supply chain or the Internet of Things (IoT), have also been under consideration for some time, but have yet to be proven to be capable of causing the use of cryptocurrencies and blockchain to explode. 

Therefore, while on the one hand, it seems that Nguyen’s predictions do not introduce any significant novelty, with respect to what was already known, on the other, they seem to be far less focused on the financial world, which has demonstrated to date that it is clearly and unequivocally the most interested in these technologies.