In the second half of 2013, Bitcoin made an unprecedented jump from the $70 level and passed $1,140 from July to December, an increase of more than 1,000 percent.

Then, it dropped. Not as drastically as it popped, but the crypto-currency has been on a steady decline since that all-time high. While some will argue that Bitcoin was in a bubble that has now burst, there are still many who believe that there is a lot of potential growth in the crypto-currency.

David Ripley is the founder and CEO of Glidera, a digital wallet for Bitcoin. Ripley was nice enough to take the time to answer a few questions for Benzinga on what Bitcoin needs to overcome this decline.

Related Link: What Is Bitcoin? Just Ask Robocoin CEO Jordan Kelley

Reasons For The Decline

BZ: What has caused the steady decline in Bitcoin since December 2013? Why is this happening? Are people losing faith in Bitcoin because of news events surrounding it?

DR: This price movement pattern has actually repeated itself several times over the history of Bitcoin. By that I mean, a substantial price increase over a short period of time followed by a longer period of decline. Each time, the high reached during the price increase typically exceeds the previous high and the low reached during the decline stays above the previous lows.

Despite the current period of price decline, real Bitcoin adoption races forward. We have seen significant adoption from new individuals and businesses this year. This growth yields a Bitcoin ecosystem that is substantially larger based on any metric you chose. We’re now at over 6.5 million wallets versus just over 1 million a year ago. We’re on our way to 100,000 merchants, and we were just at 10,000 last year with many $1 billion-plus revenue merchants adopting all in 2014.

Potential For Growth

BZ: What will it take for Bitcoin to grow?

DR: Bitcoin offers a significantly compelling set of benefits relative to the existing financial services industry. Further, the core technology underlying Bitcoin’s distributed ledger allows the ability to store and transmit data without the need for trust in a third party. This can have an even greater impact beyond just financial services.

Despite the potential, Bitcoin and distributed ledger technologies are still in their infancy. The consumer and business software and services that surround Bitcoin must continue getting easier and more secure. These new tools will provide a more compelling case for use by real users, which will ultimately drive even greater adoption.

Show Me the Money: More Businesses Accepting Bitcoin as Currency - See more at: http://t.co/5L9g6rKnUV #bitcoin — Glidera (@GlideraInc) August 21, 2014

BZ: Is it possible for a crypto-currency to become mainstream? Why is Bitcoin different than other crypto-currencies?

DR: Yes. Given crypto-currencies are still incredibly nascent, the reality of mainstream adoption is very much long term. However, crypto-currencies inherently possess the necessary properties to achieve mainstream adoption. Currency and money in general benefit from extremely powerful network effects, thus overcoming the network effect of legacy fiat currencies presents a significant challenge. Yet, if crypto-currencies continue along the current trajectory, it’s possible to see a path.

Over 500 crypto-currencies exist. Some of the alternatives offer different properties than Bitcoin, such as different security algorithms or different transaction confirmation times. Yet, the majority of the alternative currencies are more similar than different. In these cases, Bitcoin’s greater adoption or network effect is actually what drives its differentiating value. Right now, the combined market capitalization of all alternative currencies is just one tenth the size of Bitcoin’s market cap. Down the road, the new “Bitcoin 2.0” decentralized networks, which offer more flexible platforms for application development, may offer differentiated benefits that allow them to succeed alongside Bitcoin.

Challenges For The Future

BZ: What challenges does Bitcoin face in its growth?

DR: A number of challenges exist for Bitcoin as it continues to grow. As mentioned previously, better software and services for consumers and businesses must continue to evolve. Users must have several options for highly secure products and services that also have incredibly easy user interfaces.

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