By Natalie Lord
The influence of cryptocurrencies and blockchain has been significant for numerous industries around the world to date, with the potential for further benefits in the future substantial. We look at how cryptocurrencies could impact our lives going forward.
There are believers in cryptocurrencies and, inevitably, nay-sayers. Some consider that it could be the invention of the century and have visions of digital currencies replacing tangible money in due course, whilst others argue it will go the same way as the dot-com bubble and, like many passing fads, will soon be little more than a memory.
Cryptocurrencies are still in their infancy in terms of its credibility in the financial world, but everything has to start somewhere. There weren’t many disciples when the internet dawned, and look what happened. The fact that cryptocurrencies have garnered so much attention can only ultimately be a positive, not least when you consider the potential of its underlying blockchain functionality.
Critics baulk at the volatility of cryptocurrencies and liken it to a rollercoaster ride, but a number of commodities have suffered similar highs and lows. Think coffee, oil, tulips! Bitcoin in particular has suffered at the hands of the critics with people saying its unpredictability may render the coin boom worthless. It is entirely possible that Bitcoin may lose value as alternative cryptocurrencies increase their market share. But cryptocurrencies are just the beginning of what blockchain functionality offers and Bitcoin is essentially a single example of a simpler structure of blockchain. Going forward Bitcoin could be eclipsed by alternative digital currencies. Even now, Ripple and Ethereum are gaining in popularity which could help regulate Bitcoin.
Granted that Bitcoin was the first digital currency out of the starting gate, followed by Ethereum which demonstrated potential beyond just the token, but Ripple has increased the odds of success with its smart contract capability, with supporters saying it’s the cryptocurrency that has best showcased the potential of blockchain technology.
Ripple is apparently now considering replacing Swift payments for cross-border transactions and could entice further investors not because it’s a cryptocurrency, but because it offers a formulation of blockchain in a practical environment. Santander, UBC, Standard Chartered, UniCredit, CIMB and Euro Exim Bank are a few of the banks currently utilising or looking to use RippleNet blockchain network or its XRP network for international transactions.
The increase in institutional money in the marketplace will further enable changes and propel the cryptocurrency space forward. The daily number of cryptocurrency transactions is up year-on-year which signifies growth in spite of its volatility. There is also talk that crypto could be floated on the Nasdaq. If this happens it would add significant credibility to blockchain and render it a serious contender to current financial options. Some say that a verified exchange traded fund (ETF) would be sufficient to further elevate the status of cryptocurrencies, and make it easier for people to invest in Bitcoin, but that requires demand.
Demand in turn depends on historic and predicted performance and on the belief that crypto is here to stay and growing great. Cryptocurrency, as it stands, needs to have an added component to prove its viability and quash the rhetoric of critics, but with the potential lent by blockchain technology success is as certain as change.