As bitcoin’s bull run dominates headlines, critics including US President Donald Trump have slammed it for being “based on thin air” and “highly volatile” while the People’s Bank of China rushes to prepare its own digital Yuan in response to Facebook’s recently announced Libra cryptocurrency. With bitcoin approaching its adolescence and institutional adoption on the rise, Tara Annison, Technical Product Manager of the PR9 Network , shares her thoughts.
Bitcoin enters its adolescence
Borne out of the 2008 global financial crisis, bitcoin and its underlying blockchain technology have had somewhat of a turbulent decade. From market highs and lows, to real-world use cases beginning to emerge and traditional institutions making their foray into the world of emerging tech, it’s been quite the ride.
Fast forward ten years, blockchain and bitcoin are familiar buzzwords, and we have weathered the storms of prolonged crypto winters and lived to tell the tale. In doing so, we are making the somewhat subtle shift from money-making venture to underlying technology adoption.
Big players are entering the space
One of the big trends this quarter is the focus for institutions and corporates towards blockchain projects and cryptocurrencies. We have seen announcements such as Facebook’s Libra project dominate the headlines, as well as the FCA and their ban on crypto instruments for retail investors, Nestle’s blockchain-based supply chain tracking, the IMF’s prediction on CBDCs, and the Swiss Stock Exchange’s comments around stablecoins.
This quarter, we’ve continued the move away from ICO-related discussions and even managed not to get side tracked too much with the price uptick. Now, the focus is on how blockchain projects can show real-world use cases and how cryptocurrencies can take their place as an alternative asset class.
What does the future of blockchain hold?
We often hear the phrase ‘mainstream adoption’ when it comes to blockchain technology and cryptocurrencies, but what exactly does that mean? And, more importantly, what does it mean for the average user, if anything at all?
For all its real-world use cases and benefits, of which there are many, including reduced costs, improved transparency, and increased collaboration, I believe the hype surrounding the mainstream adoption of blockchain can be slightly misguided at times.
After all, it is not the panacea for all business problems as it may not consist of the right tech stack. It’s simply a back-end technology stack and, as such, the majority of users will never directly use it or feel its presence; the same way nobody really cares about how the internet works. We just take for granted that we can be on a train watching YouTube, or in a mountain hut ordering Deliveroo. As such the measuring of blockchain's success by 'mainstream' adoption is the wrong metric. It shouldn't be used in anything and everything but should be, instead, used well in those specific use cases where it makes sense.
While there can be no doubt surrounding its status as a revolutionary technology, blockchain also requires a purpose and a product to be leveraged by. On the other hand, a cryptocurrency simply needs two people who want to transact and move value around — giving crypto far more ‘mainstream adoption’ in my eyes.
So is blockchain the be-all-and-end-all of the tech world? Probably not. However, blockchain adoption is undoubtedly on the rise, real world uses are continuing to emerge, and widespread mainstream adoption will likely follow suit in due time — whether we realize it or not. Over time, hype will be separated from reality and those projects with relevant real-world applicability will become an essential part of our daily lives.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.