10 years after the first blockchain appeared, this technology is still largely experimental. It is difficult to predict with confidence the future of the blockchain industry and the technology itself, but its certain outlines are already looming.
Bitcoin orthodox believers believe that the blockchain itself is not needed by anyone, and all attempts to use distributed ledgers without cryptocurrencies will not meet expectations and will be discontinued or their improvements will lead to the abandonment of the basic principles of the blockchain. Their opponents, mainly representing banks or government agencies, on the contrary, declare that cryptocurrencies and most public blockchains will disappear in a few years and the future will remain with standardized and certainly regulated distributed ledgers.
Reality is unlikely to meet all the hopes of idealists or will fully meet the expectations of skeptics: the sum of all efforts will lead to a certain compromise, and the blockchain will take its place among other achievements of mankind. Let’s try to formulate positive and negative factors that will influence the development of the industry in the foreseeable future.
Bitcoin emerged in 2008 as a reaction of a free society to the growing ability of the state to regulate financial flows. The transition of developed countries to non-cash payments and the gradual abandonment of cash make all people’s income and expenses visible to the banking system, and through it to regulators. If the transfer of even large amounts of cash is not difficult to hide, then any non-cash transactions before the advent of cryptocurrencies could only go through intermediaries in the form of banks and payment systems. The intermediary has all the possibilities not only to trace, but also to cancel the transaction, freeze or even confiscate the funds of a citizen who is only suspected of illegal activity. But even in day-to-day operations, the presence of intermediaries slows down operations and increases costs. With the development of global communication networks, the old financial system became more and more cumbersome and more and more lagged behind technological progress.
Society’s need for new money with better opportunities led to the emergence of cryptocurrencies (almost immediately after the 2008 financial crisis, which remains the largest in the 21st century). They gave people the ability to completely control their operations, get rid of middlemen and disregard borders. Unlike a suitcase full of cash, any amount in cryptocurrency is transferred anywhere in the world in a matter of seconds, and the transaction cannot be blocked by a bank or regulator. Therefore, the emergence of bitcoin made a real revolution in the minds and a few years later caused a new “gold rush”.
With a new type of money, a new bunch of problems have appeared. Speculative bubbles bloomed on high volatility, many weak and often fancied security systems for cryptocurrency exchanges turned out to be vulnerable to hackers, and the anonymity and lack of control of cryptocurrencies attracted scammers: with their help, sales of illegal goods began, cases of tax evasion and money laundering became frequent. Regulators, concerned about the lack of control over the growing financial flows, began to sound the alarm and introduce restrictive measures from a complete ban on cryptocurrencies in a number of countries to attempts to control transactions with them.
Meanwhile, while the excitement around cryptocurrencies and the emerging platforms of smart contracts was raging in society, the interest of business grew not so much in the new financial system as in the blockchain the basic technology that allows you to solve the problems that have matured both in the financial sector and in production, logistics. energy, government and even medicine.
In fact, blockchain is a niche solution and is unable to completely replace existing DBMS or international payment systems, but it can be integrated with them.
However, in 2016-2017, a strange and possibly more dangerous bubble formed in the business environment, which has been repeatedly compared to the boom of dot-coms (Internet companies), which originated in the wake of the spread of the Internet. The dot-com bubble burst at the turn of the millennium and took with it not only most of the failed startups, but also hundreds of billions of dollars invested in them by investors.
Since 2016, they have been trying to apply blockchain literally everywhere, even where its implementation is completely unnecessary and will not give any economic effect. Tens and hundreds of millions of dollars are invested in startups only because their names contain the word “blockchain”, and also often because of empty promises that are not backed up either by the professionalism of the development team or by a well-developed and substantiated concept. And this happens not only in unregulated ICOs, but also with public companies whose shares are traded on the US stock exchanges.
All rights reserved Everything You Need To Know About Blockchain