In late October 2008, the world was going through one of the most crippling financial crises ever. Lehman Brothers had collapsed a month earlier, and the world’s financial powerhouses were forced to implement a range of emergency fiscal policies to prevent the very real possibility of a full-scale collapse of the global financial infrastructure.
It was against this backdrop that one Satoshi Nakamoto published a paper entitled: Bitcoin: A Peer-to-Peer Electronic Cash System to a mailing list of subscribers in the cypherpunk community. Under the circumstances, it is unsurprising that this paper escaped the immediate notice of mainstream economists, despite the fact that the timing could not have been more appropriate.
Two months later, the first cryptocurrency was formally launched, and the rest, as the saying goes, is history. Last year, Bitcoin’s market cap exceeded that of Visa and it is now just one of a whole list of cryptocurrencies that are vying for our attention.
The state of cryptocurrency today
Ten years have passed since that paper was published. Despite the growth, and that of altcoins like Ethereum, crypto is still seen as something of a fringe technology. Ecommerce has gone through the roof, but very few of us are using digital currency to pay for those digital transactions.
A significant exception is in the online gaming sector, where crypto adoption is far higher than elsewhere. You can read more about cryptocurrency as a safe payment method straight from the horse’s mouth at one of the specialist crypto casino sites, but essentially, gamers love the convenience, speed, security and anonymity that using Bitcoin and Ethereum brings. Those in the know see this as an indicator of things to come, and suggest that it is a matter of when, not if, crypto truly enters the mainstream.
Allaying security concerns
One of the biggest roadblocks to crypto adoption has undoubtedly surrounded security. We can read all the papers we want about how blockchain technology knocks every other form of online security into a cocked hat, but when the media inundates us with stories of Bitcoins being lost and stolen to the tune of $1.5 billion per year, a degree of reticence is understandable.
Implementing a cryptocurrency ecosystem that is both secure and convenient is therefore fundamental to adoption. A simple way of doing this without reinventing the wheel is to adopt technology that is already in everyday use within the conventional finance sector and bring cryptocurrencies to the same levels of usability and security that people experience with any modern currency.
Chakib Bouda is the Chief Technology Officer at Rambus, a US firm that develops online wallets and payment software. He told The Independent newspaper that getting this kind of system in place will “transform how many sceptics view bitcoin transactions.” Bouda predicts that in 10 years’ time, cryptocurrency will be a mainstream payment method and nobody will think twice about using it.
Will the original stay on top?
Developing something completely new and pioneering is always fraught with risk. And even if it is a success, it does not always remain at the top of the tree, as others follow, and turn a great idea into a multi billion dollar money spinner.
We have seen examples in the online world time and again. Webcrawler and Alta Vista brought search to the world, yet Google and MSN are now the search engines of choice. Friends Reunited and MySpace invented the very concept of social media, while Facebook and Twitter have now become a way of life to a third of the world’s population. Will we see the same phenomenon in cryptocurrency?
Nigel Green, the CEO of London-based financial consultancy deVere Group, certainly thinks so. He predicts that the overall crypto market is set for exponential growth of at least 5,000 percent between now and 2028, but he believes Bitcoin’s near stranglehold will disappear and that its influence will reduce significantly.
In part, this is because of the blockchain technology that underlies the currency. Bitcoin is not highly scalable, so if adoption really does grow in the way Green suggests, it will be a technological impossibility for it to grow at the same rate. This is a challenge that Ethereum founder Vitalik Buterin has sought to face head-on using sharding technology, but even Ethereum would face scalability issues with this type of growth.
Green suggests that the biggest players in the crypto market of the future might be ones we have not even heard of yet. He predicts that in the long run, Bitcoin, and to a lesser extent, Ethereum, “will be hit by the superior technology, features, and problem-solutions, offered by yet-to-be-released cryptocurrencies.”
One thing that everyone agrees on is that cryptocurrency is set to become a part of our everyday life over the coming years. But beyond that, only time will tell whether Bitcoin, Ethereum or some other cryptocurrency will be the one that has most to celebrate in October 2028.