Blockchain technology is much like the internet in the mid-90s. They compare because both are complex technologies that have been poorly communicated by experts. The industry needs a good spokesperson who understands the technicalities but can also communicate with the uninitiated. Most importantly, the industry needs someone who can provide a balanced and realistic view of the opportunities and risks.
A Bit of History
Even before Bitcoin was introduced, several organizations had already tried implementing digital currency. Digital currencies attempted to enter the mainstream amid promises of a cashless society versus warnings of malware and digital insecurity. However, credit cards and bank cards were already pushing physical cash out of most consumer wallets and cybersecurity was tightening up.
The mainstream logic is that a cashless society will be more secure. Without cash, petty thieves will stop the violent robberies of convenient stores and even bank heists will become a thing of the past. At least, that’s what digital currency proponents have proclaimed through the years.
A Bit of Coin
Much of the difficulty for previous digital currencies was more political than economic. It wasn’t until Bitcoin introduced the blockchain in 2009 that cryptocurrencies became fully decentralized. With the security and transparency that blockchain offers, the notion of replacing national fiat currency became popular.
The blockchain is a distributed ledger which anyone can read, and it makes Bitcoin more secure and more transparent than cash. It also means the currency never goes through a bank or similar institution. Therefore, the fees are much lower, and no central authority can target your account. However, no central authority can guarantee any goods or services in exchange for a bitcoin.
As strong as proponents want to make Bitcoin sound, it has its weaknesses. The cybersecurity alarms rang loudly recently when both CoinDash and Swarm City were hacked. Bitcoin became associated with drug cartels and other criminals such as human traffickers. Whether these associations between Bitcoin and the black market are fair or not is irrelevant. The key point is how society will adapt to Bitcoin and other cryptocurrencies.
A Block of Chain
Now the hype has moved from Bitcoin to its underlying technology, the blockchain itself. Researchers see the role blockchain can play in innovation expanding beyond mere currency. From powering a better internet and keeping better records to trading shares and securing real estate, blockchain is expected to improve much more than just payments. Even Airbnb wants a piece of the action.
In fact, some commentators have said that the blockchain is more promising than the currency. They say the value of the blockchain will exceed the currency that brought it to life. Still others claim that blockchain without Bitcoin is pure folly. These experts claim that this year, 2017, will be the hallmark year when Bitcoin reigns supreme, albeit with blockchain supporting it. In fact, both sides of the debate may be correct. The truth may be somewhere in the middle.
A Lag of Culture
Bitcoin, Ethereum, and all the other blockchain based cryptocurrencies have their strengths and weaknesses. Yet, amid both the positive and negative hype, it is often difficult to tell what the reality of the situation is. Proponents are naturally biased, and detractors have their own agendas.
The reason for this is a phenomenon known as cultural lag. Every time a new technology is released to the world, its introduction is accompanied by idealist utopian promises and reactionary dystopian warnings. However, the reality is always somewhere in the middle.
All of this plays out while the technology rolls through four key stages: technology developers, the industrial sector, government, and society as a whole. The truth is often lost in the translation between each of the four stages. The cultural lag of both cryptocurrency and blockchain is still playing out. Governments are still trying to decide what to do with the cryptocurrencies. Society will need government to address the challenge before the masses start to understand it.
The above was written for Excel4theStreet https://www.excel4thestreet.com/future-cryptocurrencies-needs/