It’s been nine years since Satoshi Nakamoto introduced Bitcoin to the world, and whoever argues, it has managed to become the part of our financial lives – no matter how much we want it or no. Bitcoin is widely used nowadays for carrying out peer-to-peer transactions as well as storing value.
And its significance cannot be underestimated as its price went up from just one dollar in 2011 to nearly $20,000 in mid-December 2017. Even just a month ago, despite fluctuations, was traded at a much higher rate than its closest rival Ether. Today, there are 24 million active BTC wallets around the globe and lots of experts hint bitcoin will keep gaining popularity.
So is it anyhow possible to diminish the importance of bitcoin or make it useless? Morgen Peck in his piece for MIT Technology Review website suggests – yes. And there are even three ways to do so. Let’s have a look at them.
1. Governmental capture
The first way to disrupt the power of bitcoin is by central banks all over the world adopting their own Fedcoins. And those should be not mere national cyber-currencies, but all-purpose single state cryptocurrencies. They should be backed up by the central bank in all spheres, and there ought to be neither paper cash nor other currencies.
And the future with Fedcoins would be like this – with no declaration of taxes. All taxes would be withdrawn in Fedcoins automatically from the e-wallet.
The first person, who described the hypothetical idea of central-bank issued and integrated into all fields of life digital currency, was David Andolfatto. Andolfatto is a boffin at the Federal Reserve Bank of St. Louis. In the span of time, his ideas were perfected by Sahil Gupta. Gupta, in his turn, wrote a study about how such cyber-currency as Fedcoin would function. And he did it while pursuing a Bachelor’s degree at Yale University, by the way.
Sure enough, the whole thing would not work without blockchain. The ledger of Fedcoin would be managed by reliable institutions like JP Morgan or the Bank of America – those institutions, which got a green light from the central bank.
But what is clear is that Fedcoin indeed could rival Bitcoin as it could get refined in the view of all BTC’s failures and drawbacks. Then it becomes apparent why the top-world central banks are creating working teams that would look into the use of blockchain in the financial sphere as well as the creation of their own virtual coins.
2. Facebook usurpation
If central banks are not an option, then bitcoin’s reputation can be ruined by Facebook – yes, Facebook. If Mark Zuckerberg looks at how Telegram is conquering the crypto-world and makes money – it could destroy bitcoin in two shakes.
Telegram, for example, can boast with more than 200 million users worldwide, and some months ago the company notified about the creation of its own crypto-coin Grams. According to the concept, Telegram users could send it to each other as well as pay for the company’s services. In a month after the announcement Telegram collected $850 million in ICO, the same amount it got after the second round in March.
So Facebook, by doing the same, could tackle down BTC… or it could overcome it by adopting “the king” and integrating it into its own system.
To do that, Facebook will have to spend time on developing a user-friendly and well-protected Facebook-run BTC wallet. Then it could be integrated into every Facebook account. And there are 2.2 billion of them. Can you imagine the scope? Nobody else will need to bother about opening a wallet elsewhere. By the way, it would also be a good idea to adopt mining software to Facebook needs.
3. The incursion of altcoins
This is the last and, most importantly, the most natural way of disrupting bitcoin’s reigning. The broader adoption of progressive altcoins backed up by serious players in the financial and technological world (let’s imagine there to be an iCoin/Applecoin or SamsungCash).
The advent of a new altcoin – is the advent of new possibilities – faster and cheaper transactions and more secure payments. Altcoins can bring to the world what bitcoin cannot (and will never be able to) show off with.
The future is already happening, so whether bitcoin will be there or not, it is not the most crucial question. But cryptocurrencies will definitely remain there for long.