Will blockchain be enduring? – of course. Will Bitcoin be enduring? - not likely.
Unless you are familiar with the terminology of blockchain, having an argument about its future is like arguing with a physicist about the Big Bang. Right now the myopia caused by ignorance centres the crpyto discussion on Bitcoin, store of value and speculative demand. The real delivery of money, the medium of exchange and the unit of account that blockchain brings to anything from IOT to AI is still vastly misunderstood.
Analogue has been on the retreat to digital since the enigma machine. When CDs were introduced there was a massive boom of listeners upgrading their analogue record collections to CD Collections. A boom as big as Bitcoin. Companies like Sony and Virgin were built on this boom. Whereas digital music has grown stronger, CDs have not. The boom companies like Virgin and Tower Records selling CDs have all but disappeared and been replaced with App stores.
Can Bitcoin make it as a Universal medium of exchange? I believe not.
Think of digital currencies as the new wave of digital and Bitcoin as its first mainstream manifestation. There are many great things about Bitcoin that embody the spirit of the block chain revolution and the Libertarian promise of a free and egalitarian society. But these very features are what is likely to bury the granddaddy of crypto currencies.
Two outstanding features of Bitcoin are its low barrier to entry – it is an unpermissioned block chain and its proof of work mining algorithm. The mining algorithm is a great idea of democracy but both these features kill the idea of private transactions and make you suspicious of every user. But mostly they lead to the inevitable over-complication of the blockchain. As the Merkel Tree twists its branches, mining and consensus will become more expensive. Cost of electricity will be the ultimate limiting factor.
As the blockchain winds in on itself transactions become more expensive (not less expensive) to verify.
Ethereum has overcome some of these limitations. Think of Bitcoin's Ethereum as the CD's DVD. With Ethereum there are now smart contracts and the mining has been replaced with a proof of stake algorithm. This means that the bigger players in the blockchain have more say than the little guys (oh oh back to the pitchforks).
We are experiencing a Moores law of Crypto development with weekly advances. Like the CD (600 MB) and the DVD (4 Gb) were replaced by the Cloud (Terrabytes), so it will be that Bitcoin and Ethereum will be replaced with smarter more modern blockchains, capable of private transactions, complex smart contracts, permissioned systems and near zero transaction costs.
These new generation blockchains will take us back to the original plan. Remember like recording artists in the sixties were trying to beat the Man this is still holy grail for the crypto users – a bank free, tax free world.
In the future we may tip our caps in respect as we walk past old CD collections, but we won't be buying them in the future with Bitcoin. It is too early to tell what we will use. For that answer we must wait and see “ukuthi iyozala nkomoni” (what creature will come forth). There are a number of technologies vying for this space. I have put my money on TurboCASH, Rhodesium and Hyperledger.
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