Bitcoin and the Future of Digital Payments

14 Pages Posted: 18 Jul 2015 Last revised: 24 May 2018

See all articles by William J. Luther

William J. Luther

Florida Atlantic University; American Institute for Economic Research

Date Written: July 15, 2015


In just six years, bitcoin has gone from a relatively obscure piece of code to an internationally recognized form of payment. Yet, opinions about bitcoin’s future are mixed. After considering the major factors affecting bitcoin’s future use, I offer some modest predictions. In brief, I expect (1) the share of electronic transactions will continue to increase; (2) blockchain technology will be widely adopted to process these digital payments; (3) bitcoin and other cryptocurrencies, to the extent that they survive at all, will likely function exclusively as niche monies; and (4) bitcoin or some other cryptocurrency might function as more than a niche money in countries with especially weak currencies, even though these countries would seem to pose the greatest regulatory risk to bitcoin.

Keywords: Bitcoin, Cryptocurrency, Digital Payments, Payment Systems, Network Effects, Switching Costs, Regulation

JEL Classification: E41, E42, E50, G21, G23, G28

Suggested Citation

Luther, William J., Bitcoin and the Future of Digital Payments (July 15, 2015). Available at SSRN: or

William J. Luther (Contact Author)

Florida Atlantic University ( email )

777 Glades Road
Boca Raton, FL 33431
United States


American Institute for Economic Research ( email )

PO Box 1000
Great Barrington, MA 01230
United States


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