FinTech

Bitcoin Usage and The Future Of The Blockchain

Despite some ups and downs over the years, Bitcoin is still hanging round as an alternative currency. There are those who still believe that the future is bright, and that Bitcoin may just represent the future of money. Indeed, we’re still pretty early in the life of the leading cryptocurrency. As more companies begin accepting it and more consumers begin using it, it’s becoming less of a concept and more of a reality.

There are a lot of specific reasons for the continued presence and potential of Bitcoin, and many would point first to foreign nations because their treatment of Bitcoin has been newsworthy. From Greece to Argentina, there have been rumors about nations with struggling economies turning to Bitcoin as a national alternative to save citizens from crippling regulatory restrictions. And while such a maneuver is still a long shot in any national economy, we have seen citizens in such countries turning to Bitcoin on their own. Most notably, when ATM withdrawals were capped in Greece, people began investing in Bitcoin so they could access their finances how and when they needed to.

For the most part, however, the continued relevance of Bitcoin comes down to a simple increase in the number of companies and stores that are treating it like currency in the U.S. Indeed, the largest proliferation of Bitcoin-friendly merchants remains in the U.S. despite rising numbers of such merchants in Europe as well. From independent, local shops, to massive online retail chains, we’re simply seeing more and more companies growing comfortable with the idea of these tech-based transactions. And this certainly bodes well for at least the short-term future of Bitcoin.

Despite all this, there are still many skeptics who don’t view Bitcoin as a long-term solution for those looking for alternative currencies. Historically alternative currencies tend to either fizzle out or gradually be treated as commodities, and many view the latter as the logical path for Bitcoin. Recently, concerns have even been raised that the energy costs of mining and using Bitcoin may ultimately be the cryptocurrency’s undoing. But if it does die out or succumb to commodity status, it won’t do so without leaving a monumental impact on society. That impact comes in the form of the blockchain, which has already become far more than a digital ledger on which Bitcoin transactions are tracked.

The blockchain is not a specific software used by Bitcoin, but rather a concept that can be recreated and adapted by most any financial institution, industry, or even individual. The basic concept, as many know, is that it’s a public registry of transactions that cannot be altered or erased; every relevant transaction is marked down in permanent ink, so to speak, for every involved party to observe. Not long after Bitcoin became a mainstream phenomenon, people around the world—primarily, those in charge of financial institutions—recognized the game-changing potential of this technology. And so, regardless of what happens with Bitcoin, the blockchain wars have begun.

Many who are working on developing new forms or applications of the blockchain view it as possibly the most impactful technological development since the Internet, as it holds the potential to change the ways in which pretty much every type of market or industry operates. We’ve seen banks adopting forms of the blockchain, either for their own record-keeping purposes (so, a private version of the technology) or to keep consumers at ease via transparency, and thus keep them from seeking alternatives. We’ve also seen the real estate industry flirt with blockchains as a means of eliminating title fraud. And more surprisingly perhaps, we’ve even seen a company emerge with the sole purpose of cleaning up the diamond trade by tracking and recording the origins and transactions regarding individual stones.

Most exciting of all, it appears that these adaptations are only the beginning. As simple as it seems in practice, the blockchain holds enormous potential to disrupt all kinds of industries and transactions. While Bitcoin’s future remains a hotly debated subject, there appears to be no logical reason for blockchain growth to be held back.

image credit: Craig

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