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Blockchain's Disruptive Potential - Bitcoin and Ethereum Lead the Charge

April 28, 2017

 

I view the world of blockchain (distributed ledger) technology as especially intriguing because of its potential to disrupt most industries and processes as we know them today. Decentralized networks utilizing this technology can provide monumental efficiency gains, remove unnecessary intermediaries, and provide power back to the people to secure and protect their personal information.

 

For the public blockchain space, my two main predictions over the coming years are as follows:

  1. Bitcoin will continue to be the cryptocurrency of choice and extend its growth as network effects intensify.

  2. Ethereum will be the distributed computing platform utilized for developing decentralized solutions across many industries. It's disruptive potential is far greater than the Internet, itself.

Money always talks, and the money trail aligns with these assertions, evidenced by the exponential growth of both the Bitcoin and Ether price. Developers and investors alike are gravitating toward these networks because of their boundless potential to disintermediate the world in ways we deem unfathomable today.

Bitcoin

Bitcoin's dominance will ensue for a number of reasons, including first mover advantage, networks effects, and its value storage properties, to name a few. It is impossible to keep track of all of the altcoins on the market today trying to take market share in the cryptocurrency space from Bitcoin. While many of these alternatives resolve some of the limitations present in Bitcoin, their networks have not been hardened over time like Bitcoin's and they are disadvantaged by minimal network effects. These altcoins will continue to receive investment from intrigued investors as the cryptocurrency space as a whole grows, but it is improbable they will take any significant market share from Bitcoin. To learn more about Bitcoin's value proposition as an investment, check out this article.

Ethereum

Ethereum's capability spans into uncharted territory that we cannot yet fully comprehend. The Ethereum platform can be likened to the protocol of the web in its disruptive and expansive potential. The Internet disrupted commerce by shifting the retail space to the digital world away from bricks and mortar locations and by introducing an entirely new communication channel for producers to reach consumers. Ethereum takes this further and enables producers to use the Ethereum blockchain to bypass intermediaries entirely in order to deal directly with end consumers. Producers will no longer need an intermediary owned marketplace, like Amazon, to connect to the end consumer. 

Decentralized marketplaces are just one use case of Ethereum's disintermediation ability. Other applications already in the development pipeline include identity management with digital signatures ensuring authenticity, IoT security, digital rights management, prediction markets, crowdfunding, social media platforms, payments, and digital tokens pegged to fiat currencies. The full scope of possibilities is not even close to being defined, just as the full realm of capabilities of the Internet was not yet imagined in the 90s when it was a relatively new technology. Smart contracts executing on the Ethereum Virtual Machine create a secure, trusted network without any counterparty trust required. For these reasons, development projects building on the Ethereum platform are pulling in large investment and top development talent in the blockchain space.

Conclusion

Although blockchain is a relatively new technology, it has peaked the interest of developers, investors, hobbyists, and industry-leading corporations as everyone races to discover the breadth of opportunity. It is still unclear the scale of impact blockchain will have on our lives, but it is likely to revolutionize most of what we do today.

 

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