Development into and adoption of blockchain technology is growing, and this trend has no signs of stopping. In spite of last year’s price action, more and more institutions and major players are dipping their toes into cryptocurrency.
Riddled between criticism and skepticism of the cryptocurrency space, recent news points to strong indicators that the next several years will highlight massive growth in the use of cryptocurrency and blockchain technology. KPMG reported that almost half of the world’s tech leaders plan to implement blockchain in the next three years. CISCO predicted that blockchain will take on US$10 trillion of the world’s wealth by 2027.
There are a lot of hypotheses about what this predicted adoption likely entails, but not all will likely hold true. Here are three guarantees that mass adoption can’t ensure.
3. Cryptocurrency will abolish fiat
Ideologically, there are many superiorities cryptocurrency carries beyond fiat currencies. However, ideology doesn’t always translate to pragmatic appreciation. A decentralized, sovereign currency sounds like a great idea, but the road to replacement is quite murky.
Unless governments lose hold of the world’s population within the near future, the replacement of the US Dollar and Euro with Bitcoin and Ethereum seems highly unlikely. And while the deflationary nature of crypto is attractive, it eliminates a lot of the benefits ensured by inflationary fiat, like a pressure to consume, invest, and build.
2. Banks will become obsolete
In the same vein as currencies, it is very difficult to justify the destruction of banks in favor of peer-to-peer or autonomous financial alternatives. We’ve already seen banking practices employed by Coinbase and Bitfinex, two of the largest players in the crypto space, and its ignorant to suggest that these services will simply wither away.
Additionally, banks are among the leading experimenters and adopters within the space. JP Morgan recently launched their own crypto, and the banking industry is the world leader in blockchain patents. Cryptocurrency enables users to “be their own bank”, but it’s unlikely that the vast majority of the world’s population will take on that initiative voluntarily.
1. Your coin will make you rich
Even if the cryptocurrency space does grow close to 1,000 times by 2027, as CISCO believes, the individual projects and coins that make up that valuation won’t all appreciate uniformly. There are over 2,000 active cryptocurrencies, with dozen new ones being created every day.
The one-use-one-token philosophy that has enabled so many concurrent cryptocurrencies is simply an unsustainable approach. As time goes on, it is likely that certain currencies will grow to absorb the utilities of those that struggle. Realistically, there is no reason why Ethereum could not be an accepted currency for all the dapps and protocols it hosts.
By 2027, several dozen of today’s cryptocurrencies will likely see unparalleled growth alongside the maturation of the industry. Of the other thousands, some will enjoy moderate growth, and many will inevitably wither to nothing.