Bitcoin has been around since 2009. However, most people only became aware of its existence in the last couple of years. Today, it’s a household term. This sudden popularity of Bitcoin may be directly attributable to its meteoric rise in price. In the span of just a few years, Bitcoin’s price rose from mere pennies to thousands of dollars. From college students to investment bankers, everyone now wants in on it.
The rise of Bitcoin and other digital currencies was not without its challenges. There have been ups and downs along the way. However, such volatility comes with the territory when dealing with new technologies and ideas. In fact, there were many skeptics in the early years of the Internet, as well. They believed the Internet would never have mass appeal because of its complexity. Yet the Internet went on to become one of the most popular and widely used technologies in human history. In many ways, digital currencies and the underlying blockchain technology powering them appear to be headed in the same direction. We seem to be poised for another exciting tech revolution.
Here are the top four reasons to be excited about the future of blockchain technology:
1. The infrastructure is being built
The decentralized blockchain is computationally intensive. Transactions need to be verified and recorded into the public ledger, and this requires an underlying infrastructure of decentralized nodes. This is where miners come in. Miners provide the critical backbone infrastructure necessary for the blockchain to operate. Think of the blockchain miners as a power plant that powers other users down the line.
As blockchain-based applications gain traction, more and more mining power must come online to ensure optimal performance. There are already many examples of mining being performed on an industrial scale.
In response, governments and regulatory bodies around the world are scrambling to put a regulatory framework into place for digital currencies and other blockchain applications. Given the large market capitalization of these assets, the accounting treatment, tax laws, and trading guidelines are being rewritten by governments around the world.
2. Startups are building the ecosystem
The most powerful business trend of the last two decades has been Venture Capital seeded startups dethroning established industry leaders. Everything from entertainment to shopping to ridesharing to social media has been disrupted by these startups. Now we are seeing Venture Capital funds pour billions into blockchain-based startups. The rate at which these investments are happening is truly mind boggling: VC investment in the first two months of 2018 exceeded 40% of the entire total for 2017. It is apparent that the smart money is betting on these startups to be the next major disruptors.
However, even this VC funding pales in comparison to the massive amount being raised through Initial Coin Offerings (ICOs). For example, between January 2017 and February 2018, about $1.3 billion was raised via startups compared to $4.5 billion raised through ICOs, according to industry reports. ICOs are a relatively recent phenomenon and the scale they have already achieved bodes well for blockchain startups.
3. Early problems are being tackled
Looking at the hype around Bitcoin and blockchain, it is easy to forget that it is still a relatively nascent technology. And as with any new technology, there are bugs, technological hurdles, and some uncertainty about regulation.
Anyone who used the Internet in the 1990s can see the stark difference between then and now. The slow speed, limited content, and expensive services meant that only true enthusiasts participated. Today, the Internet has become a hallmark of our civilization. Blockchain-based applications have similar potential. Just as the Internet revolutionized so many industries, blockchain has the potential to do the same.
4. Brightest minds are crossing over
What ultimately makes any technological revolution possible is the innovation and creativity of the people pushing for it. We saw this at the beginning of the digital age when entrepreneurs quit grad school or their jobs to build new tech companies in their garages. Today we are seeing this trend in the world of digital currency and blockchain. Thousands of new startups have sprouted up all around the world.
These startups are being run and funded by the brightest minds in their respective fields. It’s not just programmers, either. Doctors are working on medical applications, professors are working on academic projects, and bankers are working on blockchain-based trade and payment-related ideas. The decentralized blockchain provides a better way of doing things and industry leaders have taken notice.
Digital currencies and other blockchain-based applications are at the forefront of innovation today. There is no other technology that has such wide applications and such a massive potential to disrupt existing players and even entire industries. We have looked at just the tip of the iceberg of the exciting developments happening in the digital currency world. The future will be nothing short of revolutionary.