Cryptocurrencies such as Bitcoin, Ethereum, Ripple, Cardano, and Dogecoin are demonstrating the increasing importance of blockchain technologies through rapidly rising value prices and ever greater adaptation.
While many users are excited by the possibility to conduct tamper-proof transactions without interference from banks or governments, last year also showed that more and more companies want a piece of the pie.
A particularly prominent example regarding this is new Casinos 2022 and that electric car maker Tesla temporarily accepted Bitcoin as a means of payment. But service providers such as MasterCard, Visa, and PayPal are also trying to secure a good position for themselves as early adopters.
If experts have their way, corresponding technologies are likely to play an increasingly central role in the future – and have an impact on almost all areas of life. It is no longer a secret that the central banks of several countries are also looking into the question of how traditional currencies could be led into a digital age thanks to blockchain. But that seems to be just the beginning.
Innovation Takes Time
Crypto is an innovation that can be compared to the Internet or even the smartphone. It is therefore quite logical that the innovations would initially only be adopted by individuals, then by smaller companies and finally by large institutions.
It’s believed that inflation will continue to rise and trigger investment decisions. This will drive new money into the ecosystem. If you have a limited supply, as is the case with Bitcoin, for example, this will also increase the price.
But why is blockchain so popular in the first place? And what makes the technology so secure, given that there is no regulating institution to prevent fraud through duplicated transfers?
Well, in a way, the question is also the answer. Because currencies like Bitcoin have taken a step toward a democratized financial market that, in the case of currently popular currencies, is not subject to the control of traditional financial institutions – and is absolutely fraud-proof.
This is possible because every transfer made is visible to all users on the blockchain. So if one were to attempt a forgery, one would have to manipulate the devices of hundreds of thousands of people to whom a particular transaction is displayed. That represents a virtually insurmountable hurdle.
Security Concerns Resolved?
Nevertheless, there are isolated security concerns, primarily due to the fact that transactions made cannot be reversed on the one hand, but on the other hand, are potentially vulnerable to cyberattacks during execution. And new ideas are also constantly emerging with regard to asset storage so that assets are not connected to the Internet and stolen.
According to experts, there are more than 100 companies worldwide that are currently already specializing in such safekeeping, with leaders said to include Curv and Fireblocks.
But more traditional financial companies also seem to want to find a place in this line of business. For example, Spanish security company Prosegur not long ago entered into a partnership with Israeli startup GK8 to offer what they themselves call the “world’s first crypto-bunker,” the ability to securely store all sorts of cryptocurrencies.
Today it’s bitcoin, tomorrow it’s the euro, the dollar, or Swiss francs, but also stocks or car bills.
Future and Change
But what would commercialization mean for the scene and enthusiasts? There will be a change, but for the better. All people want technologies to catch on, after all. And when they do, sooner or later big companies will also deal with the topic.
It’s not like there’s a single Bitcoin scene. Of course, there are a few hardcore techies, but also a lot of people who are looking forward to blockchain technology catching on.
Besides the risk of total loss described above, the biggest danger is not getting to grips with the issue. Nevertheless, it is likely to take a while before it becomes established, as traditional financial institutions are still not sufficiently engaged with it.
While three to four smaller banks are said to have jumped on board in the meantime, larger ones are slowly joining in. Experts are definitely certain that there is no stopping this development.
