Cryptocurrencies have been on the front page of investment and technology news for a while now. Bitcoin, widely regarded as the flagship among cryptocurrencies, saw an unprecedented run during the past couple of years, surpassing the value of gold. While many professionals in the finance and investment community remain skeptical about the true potential of cryptocurrencies as a financial tool, all eyes turn now towards the technology that powers them. Whether or not Bitcoin’s crazy run will prove to be a bubble after all, the blockchain tech that powers it as well as cryptocurrencies, in general, are already transforming other industries beyond finance – and many argue that their true reach is yet to be felt.
The Wild Chase of Cryptocurrencies
Whether or not you place your trust in Bitcoin, its rise has undoubtedly led to broader recognition of cryptocurrencies by the general public. Some professionals believe that this trend will continue and surpass expectations again in 2018 and beyond: while the cryptocurrency was trading at around $6,400 in mid-June, billionaire Tim Draper predicted that it would reach $250,000 by 2022, while Thomas Lee, CEO of Fundstrat, believed that its value will reach $25,000 by the end of 2018. Even if Bitcoin stumbles though, it seems that much of the focus has shifted to the applications of blockchain, the technology behind it. Also defined as a distributed ledger, blockchain is a list of encrypted transactions known as blocks, which are verified and distributed through a network of computers with P2P (peer to peer) connections. Blocks are then united together by hashes, which connects input and output value, which makes blockchains immutable.
Perhaps the most crucial aspect of blockchain, which is constantly celebrated by Bitcoin enthusiasts, is its decentralized nature: in a nutshell, nobody can unilaterally intervene in the process, as transactions are anonymously verified across a network of trusted users – as opposed to fiat currencies, which are regulated by central authorities such as national governments and banks. Oddly, one of the potential applications of blockchain technology is precisely at a government level: many believe that governments and cryptocurrencies are by definition in an antagonistic relationship. Others argue that this may very easily become symbiotic, if government understand the benefits of blockchain and cryptocurrency adoption. Many countries have already seen their share of national cryptocurrency plans, like the Petro in Venezuela, which was later ruled unconstitutional, the Cryptoruble in Russia and the proposed Estcoin in Estonia.
How Cryptocurrencies and Blockchain Have Transformed Industries
Cryptocurrencies and blockchain have already transformed many industries, and particularly the startup scene, as more and more companies spring up that introduce novel applications of blockchain – from digital advertising to ride-sharing apps like Arcade City, which organizes local drivers into guilds by eliminating the middlemen. Perhaps the biggest revolution to come across fields is the execution of smart contracts, which are powered by blockchain. This technology that might be out to replace lawyers is already being implemented in the music industry and allows parties to remain anonymous while it automatically enforces the obligations undertaken under the contract. When it comes to cryptocurrencies themselves, one of the major industries that have undergone probably the biggest transformation by Bitcoin is banking and financial markets in general.
Many regulators and financial institutions have turned their attention to Bitcoin and have considered how to better adapt to the new reality of cryptocurrencies. According to Reuters, Barclays Bank has concluded a deal with US-based cryptocurrency exchange Coinbase, in order to offer its British customers the chance to deal in cryptocurrencies. Cryptocurrencies have created a medium that according to some is optimal for cross-border transactions. Fastness and anonymity of payments along with low or minimal transaction fees have pushed cryptocurrencies at the top of the list of many transaction providers.
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Keeping in mind that it is not so complicated to get started with Bitcoin, the same reasons have made it one of the favorites in the iGaming industry, according to Betway. Online gambling providers are regularly early adopters of new technologies as they try to make payments more convenient for clients; the fact that most peer-to-peer Bitcoin transactions have no fees and are faster than bank deposits, makes the cryptocurrency very appealing for both them and their customers. According to Forbes, cryptocurrencies have also transformed the tech and the financial world from a slightly more mundane perspective: they have created a myriad of jobs for people who know and write about Bitcoin and its counterparts. As Forbes reports, Ivan Liljeqvist, a software professional, saw his YouTube channel, which tries to explain cryptocurrencies to the masses, grow by 2,500% in subscribers (from 4,000 to 100,000) in a matter of months. Journalists, IT professionals, financial analysts, have all seen careers being built on cryptocurrency expertise and received a mass boost after Bitcoin went through the roof.
Even though the long-term future of Bitcoin remains unclear to most, it is well-established that cryptocurrencies and blockchain have already significantly altered a wide range of industries – and by all accounts, it seems like we have only seen the beginning of their potential.
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