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2018-11-24 10:56:32

What will happen to bitcoin in 10 years? The future of Bitcoin and Blockchain Technology

Experts of the company Weiss Ratings shared their opinion on how bitcoin has changed since its creation and what cryptocurrencies and blockchain will become in the next decade.

What will happen to bitcoin by 2028? Will it become many times more expensive or will it almost die? Or maybe it will be replaced by other, more advanced currencies? And if that happens, maybe they'll start pushing out the Fiat money, too?

Before we talk about the future, let's look at the past.

10 years ago, when bitcoin appeared, the world was gripped by a financial crisis. It was 2008. The governments of the major countries have accumulated huge debts. Lehman Brothers collapsed, triggering a chain reaction in the international banking system, and governments responded with virtually unlimited emissions. Thus, bitcoin was born as a reaction of Satoshi Nakamoto to what is happening.

What did the Creator of bitcoin dream about? He wanted to create a peer-to-peer digital money system, killing three birds with one stone:

1. First, bitcoin was designed to bring money out of control of those who unleashed the financial crisis;

2. Secondly, monetary policy here is determined not by behind-the-scenes negotiations, but by the mechanism built into the system;

3. And, as a result, it will be stable, predictable and completely transparent for everyone.

Alas, reality has diverged from the dream.

Over time, it turned out that bitcoin is more a way to store capital than an electronic money system.

How did this happen?

When the creators of bitcoin planned their currency, they did not really delve into how the money is arranged, what is good in them, and what is bad — the specification of bitcoin is designed so that it turns out to be the complete opposite of the usual monetary system.

1. The offer of Fiat money is unlimited and infinitely expandable. The money supply of bitcoin is strictly limited and unchanged.

2. Access to digital money is controlled by banks. Bitcoin can be used by absolutely everyone.

3. Fiat systems rely on a limited number of trusted organizations regulated by the Central government. Code bitcoin provides nothing of the sort, including regulation and influence governments, the system is not subject to anyone.

That was the theory. However, in practice, these principles have undergone some changes:

1. Since bitcoin is a scarce commodity, most people are reluctant to part with it, expecting it to rise in price over time.

2. In the absence of official regulation, there was an oligopoly of miners controlling the issue of most new bitcoins.

3. Since there was no mechanism to choose the administration, the development of the network is controlled by a narrow group of developers.

Thus, it becomes obvious that bitcoin was an excessive reaction to the financial crisis and gave rise to its monetary system.

Instead of a peer-to-peer payment system, bitcoin has become a tool for storing capital, something like gold, and if nothing changes, in 10 years it may remain its only function.

Or even worse: it may happen that bitcoins will be mined by an oligopoly of large Asian companies, and it will belong mainly to large Western financial institutions.

However, there is good news: like gold, bitcoin still has the potential for significant growth. Moreover, bitcoin has become the first public and open digital asset in the world and the first successful experiment in the use of blockchain, which has been actively developing in recent years.

So, what will happen in 10 years?

The technology of a distributed register is already being used not only to create a new generation of monetary systems — it can increase productivity, contribute to policy, social interaction of citizens and much more.

Blockchain can change elective systems, reverse lending, and completely change the face of social media. In General, the potential of cryptocurrencies is great — much more than it seemed 10 years ago.

Another question is whether bitcoin will ever meet the expectations originally associated with it-perhaps this and much more will be achieved by the following crypto — currencies.

It is important to understand that the emergence of bitcoin was a major milestone:

1. Thanks to his appearance, many talented teams are now engaged in the creation of decentralized monetary systems, devoid of the shortcomings of bitcoin.

2. More recently, we have seen another important trend: regulators and other pillars of the traditional financial system see what is happening, understand the benefits of distributed Ledger technology, and try to adapt and modernize the existing order.

One can imagine two scenarios for the development of cryptocurrencies over the next decade.

The decentralized blockchain

Open registry systems with random access will replace the traditional monetary system: instead of saving, spending or investing dollars, euros or yen, people will start doing the same thing with cryptocurrencies such as EOS, Cardano, Ripple, Stellar, or Holo.

The share of such people will gradually grow. In addition, cryptocurrencies will attract users with the convenience associated with the ability to run distributed applications in blockchain networks.

And such activities are not controlled by state or quasi-state organizations, but only by the consensus of the community.

At first, governments will resist, but eventually accept, accept the new reality, realizing that it will not be possible to control the monetary system in the usual way, and recognize these new forms of money as a legitimate means of payment.

The only winner in this situation will not be — probably, the dominance will go to a whole group of cryptocurrencies, characterized by good technology, high-quality applications and wide distribution.

A centralized blockchain

Governments of the world's largest economies-the US, EU, China and Japan — will decide to implement a distributed register. If that does not happen, the smaller countries will be the first and the larger ones will follow. They will understand that digital money is the future, and that it is most effective to build a new monetary system based on the blockchain.

Only they will not create open decentralized systems-on the basis of the same technology they will create money controlled by Central banks.

For a politician who wants power and control over the population, this is a real godsend, because the government can directly control every transaction in the system, and any account can be frozen with a few clicks. Moreover, once the various types of property are digitized, it can be confiscated from any part of the population in just a few seconds.

But the basis will still be the technology of distributed registry, not open, and permits access and the authorization will be issued by the government. In addition, it will no longer be a system that does not need trusted intermediaries, because all the rules are written in the code — in this case, the participants are forced to recognize a certain Supreme power.

In a country with strong democratic traditions and a good judicial system, this will not be a tragedy, because in such circumstances it is assumed that the government acts in the interests of the people, using its new digital powers only against intruders.

But in countries prone to authoritarianism and deprived of an independent judiciary, the situation will only worsen: a centralized blockchain will be used to destroy any individual freedoms.

How can one technology form the basis of two so different scenarios?

It is important to understand that the technology is always neutral: steel can be made of sword and sickle.

In this sense, the blockchain is a good example. This is one of the most important technological open, able to expand the limits of personal freedom, guarantee property rights and become a source of wealth of society — and it is in the hands of the authoritarian ruler can become an instrument of total surveillance and control.

What will happen in 10 years? Much depends on which of the scenarios described will win.

We assume that at least at first we will see a bizarre mix of both options, but in the long run a decentralized distributed registry will always have two important advantages:

1. Blockchain benefits most from voluntary mass participation of users, while centralized blockchain suppresses mass participation;

2. Even if governments can create their own fully controlled cryptocurrency, they will be unable to ban decentralized blockchain networks.

Thus, the same laws that make democratic countries stronger than dictatorships will ensure the benefit of a decentralized blockchain compared to a centralized alternative.

 

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