Bitcoin and Crypto: Looking at Where We Are Going by Where We Have Been
As I write this, I am uncertain of the future of bitcoin and cryptocurrencies in general. The introduction of Facebook’s Libra Coin earlier in 2019 shoved bitcoin and cryptocurrencies directly into the mainstream’s consciousness, and now we have reached a point where people are looking at them and asking themselves, “what can they be used for?” In practical terms, are they a payment platform? A smart contract execution platform? A store of value? Money? Instruments that facilitate international remittance? Are they tools that dishonest and selfish people can use to evade accountability? Or are they protocol platforms that free human potential from the boundaries set by our ruling institutions? Even though these questions aren’t new, now that we’ve moved out of the hobby/enthusiast adoption phase, we now have to define what cryptocurrencies will be and become.
I’m currently reading Bill Gates’ book, The Road Ahead. It felt appropriate because I feel that where bitcoin and other cryptocurrencies stand today from a technology adoption standpoint, it is comparable to the internet and the technologies that utilized that platform at the time the book was published in 1995.
When the book was published, the internet was a very undefined creature; at that time, we had applications that we could use to interact with such as email, web browsers, search engines, chat rooms, news sites, very basic commerce sites,and if you knew HTML, you could set up your own web site. Today we have smartphones, cloud services, payment platforms, online shopping portals, media content and information sharing of unbelievable proportions, AI-driven application software, Wi-Fi, instant messaging, video chat, a cornucopia of apps and interactive games, and you can set up your own website using nothing but a smartphone while waiting for a cup of coffee.
Many of us have been able to witness the evolution of the internet since its infancy. When you take a step back and look at the history of it from 1995 to where it is today, what stands out is the scope and many layers of innovation and functionality of all the software and hardware connected to it.
In crypto, we are facing a similar situation. In the crypto ecosystem, we have many applications that help us to perform basic functions using the software protocols: making purchases, sending and receiving, first- and second- generation Point Of Sale dedicated payment platforms, putting information into immutable records, digital wallets that do more than communicate send and receive commands, financial companies creating instruments to monetize crypto, laws and regulations being debated to define the legal definitions of crypto (as well as usage access and transaction reporting,) margin trading, loans and interest-bearing deposits, and corporations and nation-states evaluating the issuance of their own cryptocurrencies. (Of all these, the legal realm will have the most overarching effect, as it will define what boundaries get set on the sandbox that technological innovation and development can move within.) When you apply the same framework used to analyze the internet’s evolution and insert it to where the crypto ecosystem is today, you begin to realize that there is no telling what applications and use-cases are going to be created in the next 25 years. The possibilities are mind-blowing.
To summarize, I don’t know how events will unfold in the coming years, but just as it took time to define the rules and explore the full potential of information super highway (which continues to evolve even to this day,) it is clear that we as a society have much work ahead of us now to define new rules and create new expressions of innovation to harness this new technological platform that cryptocurrencies offer, and define what it is to become.
Be well, Everyone.