Up until a few years ago, very few people gave the concept of Bitcoin and the blockchain any merit, as this was all just another hype. After all, a monetary system completely outside of the control of banks and governments would never amount to anything, and Bitcoin would eventually be shut down. Fast forward to today, and the digital currency ecosystem is buzzing with more excitement than ever before. The opposition from banks and governments is coming to an end, although there is still a long way to go. But how will things look 10 years from now?
Although it is rather difficult to make any accurate predictions about how Bitcoin and blockchain will evolve in the years to come, there are some telling signs on the wall. Whereas financial institutions opposed the concept of distributed ledger technology for many years, they have come around to give the idea another chance as it seems like banks support Bitcoin and the blockchain—or at least the technology per se.
Bitcoin and blockchain are being copied
To be more precise, a lot of financial players are trying to copy the Bitcoin blockchain technology, and optimize it for their own internal needs—not that there is anything wrong with that as imitation is the most sincere form of flattery. But at the same time, it also begs the question as to whether or not Bitcoin will succeed a decade from now.
The answer to that question is most likely a ‘yes’. Despite the competition from mobile solutions, fintech players, and even central bank-issued digital currencies, which are being developed right now, there is no replacement for Bitcoin by any means. The decentralized digital currency will always have the first-mover advantage, no matter what other people like to think.
That being said, the concept of bank-issued virtual currencies is quite interesting. To many people unfamiliar with Bitcoin, this will make the popular digital currency completely obsolete, as the banks will do it ‘better’. Up to a certain extent, they certainly will because they have the customer base and existing relationships with other financial players and merchants to make these virtual currencies a success.
But in the end, very little will change for consumers and merchants, as central banks can still control the monetary supply. In fact, it will become even easier for them to bring more money in circulation. This is because there is no physical printing and minting process involved, and all it takes is changing a few lines of code. Hyperinflated fiat currencies will become digital and the key problems will not be solved by anyone.
While it is certainly positive to see banks embrace the future of blockchain technology—and it is about time they do, truth be told—they are looking to copy that as well. There is zero interest from financial players to keep the decentralized aspect of the blockchain intact, as they want to be in full control of anything and everything at any time.
The future is blockchain, the future is Bitcoin
It will take several years until consumers and banks realize these centralized copies of Bitcoin and blockchain will simply not work. Using a new form of technology and finance to create the illusion of a better system without addressing the inherent problems will only further reduce the trust relationship between citizens and those in charge.
Bitcoin and blockchain will not go away, despite this fierce competition right now. In fact, both solutions will only come out stronger, as there will be no other choice than to admit which system works better. Centralized authority is on the way out, and the sooner everybody realizes that, the better off we will all be.