Innovation without permission: Bitcoin
Bitcoin, blockchain, cryptocurrency have all become mainstream media topics recently with the meteoric rise in the value of Bitcoin, breaking through the 10 000 USD resistance level with needless to say … no resistance and approaching the 11 000 USD level only a few hours later. Naturally, a correction followed. Who knows what the value will be by the time you read this article.
Most of the world has now come to realise that it is inevitable that we are now going to see (over a period) broad adoption of a form of peer to peer digital money that is developed on a shared borderless, uncensored cryptographic ledger. Whether or not this will be called Bitcoin or ultimately something else remains questionable. Broad adoption does not mean just Bitcoin. Bitcoin is essentially a test bed. Alternative cryptocurrencies might also become popular, some even more so than Bitcoin.
Adoption will unquestionably not come without various challenges. There is going to be resistance mainly from Financial Institutions due to the inherent threat that Bitcoin poses to them, and Governments who are determined to eradicate cash, the ultimate peer to peer currency in the form of a digital currency system that is driven by control, centralised authority and complete surveillance. We only have to look back at recent events in India, Venezuela and Zimbabwe to realise the scale of this problem. The other problem facing adoption is its simplicity of use. Currently, very few people are capable of understanding how to perform transactions, store Bitcoin and secure Bitcoin on an individual basis without the need to involve a centralised authority or custodian.
With time, the technology will be simplified in a similar manner to how technology surrounding the use of email evolved. In 1989, this was an incredibly complicated and arduous process. Within a few years, it was not necessary to have computer programming knowledge to send an email. With Bitcoin, we are therefore at a similar stage in its evolution. Its broad adoption will be successful when you do not need to understand how the technology behind it functions.
We will see many new applications built on the bitcoin blockchain. We see many new variants of the original blockchain in the form of alternative cryptocurrencies. These new variants aim to improve the limitations of the existing bitcoin blockchain. There are now literally hundreds of alternative cryptocurrencies available. I believe that ultimately only a few will be adopted mainstream, the remainder will be insignificant.
Many of the applications built on the Bitcoin blockchain will be introduced by individuals who will have grown up in a decentralised environment, in a similar way to how successful applications like Facebook and Twitter were developed by individuals who never experienced life without the internet. This is inevitable.
Bitcoin is not a failed experiment. It is a practical manifestation of a major invention. It is un-censorable, durable, portable and fungible. It is the Internet of Money.