The Future of Bitcoins
The Future of Bitcoin is vast and ever expanding. The carrier of this growth is the Blockchain and Bitcoin is but one application that can run on the Blockchain. At this moment Blockchain technology is rocking the Fin Tech world. In this article we will be discussing not only the future of Bitcoin but also the future of Blockchain technology. There are far too many possibilities and opportunities to mention them all, so we will focus on what we feel is most important.
Beginning with a discussion on the future uses of Bitcoins as money and their role in future capital systems is important because of the disruptions it will cause to traditional banking systems. However, Blockchain is much more important due to the endless systems that can be built on and in to it, including Bitcoin and other Cryptocurrencies. Decentralization is their strength and security and provides a uniqueness and flexibility that has never been used.
Future of Bitcoin
Bitcoin is more than just a currency, it is money. Currency must be a medium of exchange and a unit of account. It must be portable, durable, divisible and interchangeable. Bitcoin is all these things but with one exception. Like gold and silver it is also a store of value and possibly generational wealth.
Hundreds of thousands of immigrants working outside their home country send money back home to relatives. This process is known as foreign remittances and they make up hundreds of millions of dollars in transactions on a monthly basis. With the current systems in place, billions are lost annually to money transfer services. These fees can be significantly minimized and in some cases be removed completely with the use of Bitcoin, thus putting more capital back in to the pockets of families around the world. This extra capital will be a tremendous source of added income for many of the poorest people on Earth. Bitcoin makes it possible to access a previously inaccessible banking system with nothing more than access to a smart phone and a transnational money such as Bitcoin.
In addition, transnational money will decrease the difficulty many companies and individuals face when conducting cross boarder transactions. The current system is expensive and slow. Many companies have suppliers, partners and subcontractors located in various countries because of resources they have access to. Converting funds to pay for products and services from these suppliers, partners and subcontractors is cumbersome, rendering the current system, inefficient. By simply utilizing a transnational currency many businesses, including import/export businesses can be competitive in the world. Payment systems for large scale operations such as these are now scalable with Bitcoin. Bitcoin provides the ability to bill and pay in micro increments putting individuals in the poorest countries on an equal playing field with large corporations.
As an afterthought , it is important to note that many discount the efficient use of Bitcoin for all the reasons stated above due to its volatility. While Bitcoin has many variables making it difficult to predict future price movement one thing is for sure, the more Bitcoin is utilized the less volatile it will be.
With the increased use and acceptance of Bitcoin, more people are realizing that the true strength of the technology is the Blockchain. A good example of this is Crowdfunding. Crowdfunding is an alternative financing technique where a project is funded using many people. However, problems arise when the individuals requesting the funds do not complete or carryout what they said they would. Using Bitcoin and Blockchain provides some security to the Crowdfunding platform while giving protection to the investors. This is done by a type of Smart Contract. The agreement is coded directly into the Blockchain and the individuals who need the funding can write a contract into the Bitcoin transactions that states certain criteria must be met for the individuals requesting the funds to receive them. Because it is written into the Blockchain the details are open for anyone to read. This allows for more transparent investment. But the uniqueness of it is in that the delivery of the funds will not be sent to the project until the requester completes the criteria set in the contract.
Another example of using Bitcoin and Blockchain is Pay-For-Proof. Someone may offer their services online for anything from Virtual Assistants to software coding. The contract is written into the Blockchain indicating that payment will not be released until there is proof of complete work. Once complete, the individual providing the service will broadcast the project or the contract to the Blockchain for confirmation. Once it is confirmed the Bitcoins will be paid out. This is a variation of smart contracts which we will discuss further in the Future of the Blockchain section.
The Future of the Blockchain
There is a growing theme within the Cryptocommunity to, “Decentralize Everything.” Meaning, everything will now be placed or built on a network that has no central control or central facility. There is no central management or controlling entity. Blockchain technology will provides limitless possibilities in innovation and creativity in terms of its possible uses, and while I will discuss some of the more important aspects and innovations, understand that I am taking a broad stroke here. By the time this article is published Blockchain tech will have already moved light years.
The development of Smart Contracts alone have given berth to new Blockchain projects. The use of Smart Contracts make it possible to maintain an immutable copy virtually forever. Births, deaths and marriages can all be kept uncorrupted on the Blockchain and later tied to identification. Companies such as Ethereum and NextCoin are pioneering this area. In addition to Cryptocurrencies they have also developed a decentralized application network providing additional service layers. These service layers can be networks, programs or api’s etc. built on top of the Blockchain to perform tasks that the Bitcoin network cannot, while still utilizing a Blockchain. Thus tying Blockchain’s future to more of an infrastructure role rather than limiting it to a currency application, such as the development of Smart Property.
Smart Property will use “Colored Coins” to create customized assets. These coins will be tied to or represent the actual asset allowing for the management of real assets on the Blockchain.
Paring Smart Property with Smart Contracts will make it possible to lock/unlock or sell/purchase an asset. They will automatically execute the change in ownership and transfer the ownership by simply coding it into the contract and then broadcasting it onto the Blockchain for verification. Variations on this involve atomicity, where both or all parties must complete a certain action in order for the contract to execute, “All occur or nothing occurs.” “Two out of Three” escrows can also be used in cases where there is subjectivity. This is the use of a third party mediator or judge. This innovation will make it possible to transact the sale or trade of one or more assets nearly instantly anywhere in the world.
Similarly to locking or unlocking an asset, the Blockchain can be used to automate security by denying or granting access to buildings, offices, rooms, safes or even software applications using Smart Locks. These locks can be software or hardware based and can be opened with identification verification or by simply paying to gain access with a transaction between an individual and the lock itself, with no third party needed.
Identification verification can be as simple as broadcasting an image of yourself on to the Blockchain and matching it with identity and reputation data such as birth certificates or family photos stored on the Blockchain. Digital ids can be tied to a Bitcoin debit or credit card or even a paper wallet in the instance of an emergency. Family, friends or even business can fund these wallets from anywhere in the world, helping loved ones and colleagues in a bind.
Identity verification will be used in voting polls where your vote will be tied to your id preventing fraud and corruption.
Daily tasks can now be moved to the Blockchain to expedite and make them more efficient. For example, something as simple as a grocery list can be broadcast to the Blockchain by you or your refrigerator. Not only can you be choosey about your items but you can know exactly where they came from and how long they may have sat at various ports or storage facilities prior to ending up at the store. Products can be matched to their supply chain that has been broadcast by the supplier so the consumer can make an informed decision.
Appliances and vehicles will now have the ability to make and execute decisions by themselves. They can communicate with each other, place orders and even report to insurance or repair companies when they are malfunctioning. Utilizing the Blockchain and Bitcoin or other Cryptocurrencies appliances can settle transactions without any action on your part. While some may find this unsettling others invite “The Internet of Things.”
The Future of Bitcoins is that of more than just a digital currency. This invention is so much more and has opened up a wave of technological advancement that has not been seen in a long time. Bitcoin and Blockchain are changing financial systems yes but they are also bringing our world into a new technological era not seen since the introduction of the internet.