Blockchain's Potential to Revolutionize Different Sectors Unquestionable, Here's Why
As with any potentially revolutionary technology, cryptocurrencies have split opinions across board. This was reflected on the world stage during the annual World Economic Forum (WEF) conference held earlier this year in Davos, Switzerland. Critics have held that this asset class is over-valued and lacks the ability to replace fiat currency. During the WEF Conference, crypto antagonists argued that cryptocurrencies are not viable as stores of value and as such, they have limited retail use and no chance of overtaking fiat currency.
On the other hand, there seems to be a general positive outlook on the impact of the technology underlying these assets as the number of organizations that adopt or consider to adopt the technology continues to increase. Increasingly, we are seeing leading companies in this space develop impact investing models that could propel blockchain adoption in the coming years.
Market Gap Similar views have been shared by Joseph Oreste, founder and CEO of Qupon. Using the example of bitcoin which lost nearly 75% of its value in 2018, Oreste argues that such phenomena are the reason for the increase in the number of stable coins.
He says, “I agree with this outlook on currency usage. Look at the number of stable currencies that are emerging. In order to do commerce, you have to have price stability and you don’t get that with bitcoin for example. At Qupon, we are building a global decentralized platform for merchants to advertise discounts on products and services stored as digital coupons on blockchain technology. Stable cryptocurrencies are a key aspect of our offering.”
Consumer expectations are also in play here, they want to be guaranteed that the value of cryptocurrencies will not be fluctuating.
“Consumers want to be assured if they exchange $10 for a cryptocurrency that they can exchange it back for $10 a month from now. Bitcoin and others can’t provide this assurance. That is why they are better suited as stores of value. The issues affecting the store of value aspect are the constantly emerging new cryptocurrencies and hard forks of existing cryptocurrencies such as BCH into BCHSV. Until the issue of newly forming cryptocurrencies and hard forking of existing cryptocurrencies is resolved, the store of value claim by Davos attendees is correct,” Oreste adds.
Long term Effects In the long run, issues pertaining to fluctuating value and price will have a negative effect on the growth of cryptocurrencies in the foreseeable future. But this is not likely to happen to all cryptocurrencies. It is most likely that one digital currency will emerge strong, attracting the backing of the crypto community due to strong global governance. Currently, bitcoin is the single cryptocurrency that is enjoying this status despite its shortcomings.
“The cryptocurrency with the strongest global governance will be a key factor in which cryptocurrency will emerge as the industry leader. Bitcoin is the current leader in the store of value space. Will it be the leader in five years, I don’t know. I do expect over time a clear winner to emerge that the industry gets behind. At that point hard forks won’t have much of an impact because nobody will invest in new or forked currency,” Oreste states.
Blockchain growth, on the other hand, is on an upward trajectory. The WEF has agreed to form a global council on blockchain to forster its growth and unleash its potential to solve inefficiencies in various sectors. It will be interesting to see how this technology that underlies cryptocurrencies will develop in coming months.
Disclaimer: David Drake is on the advisory board for most of the firms mentioned or quoted in this article.