Across the different dispensations and generations of the human race, there has been a significant evolution in trade and value exchange. Numerous asset classes have been utilized as a means of keeping and exchanging value. Many factors are involved in the use and disuse of these asset classes.
In the first part of this article, we considered a few "flaws" of the blockchain technology and cryptocurrencies in general. While some have argued and maintained that factors such as bitcoin volatility, mining, and scalability and decentralization are flaws of the distributed ledger, they are merely setbacks. In the coming years, I fully expect bitcoin to trump all expectations and become fully institutionalized.
In this article, we’ll consider some very crucial arguments in defense of bitcoin as a means of exchange.
WHY BITCOIN AND CRYPTOCURRENCIES ARE NOT A BUBBLE
LONGEVITY: For any asset class to truly gain relevance and become a means of exchange worldwide, one of the questions usually raised is the class's longevity. When bitcoin came into the scene in 2008, many financial experts quickly labeled it as a scam. Former world's wealthiest man Warren Buffet has labeled it "a real bubble," and he has been a staunch critic of the asset.
However, twelve years and counting, bitcoin is thriving more than ever before. Institutions, organizations, and traditional banks are slowly easing cryptocurrency adaptation into their daily operations. By 2025 the global blockchain market size is expected to be over $39 billion.
Inevitably, a bubble that has been around for twelve years and counting is ironic!
WORLDWIDE SOLUTIONS: Let's take a step back from cryptocurrencies for a minute; very often, people forget the idea of the blockchain technology. Blockchain is a distributed ledger where users can share, protect, and disseminate information without depending on a third party.
Globally, the 21st century has been laden with civilization and rapid advancement in technology. With the world desperate for solutions in many fields, blockchain is rapidly providing answers. Fields like gaming, agriculture, medicine, and healthcare have begun to adopt blockchain to enhance efficiency further.
During the COVID-19 pandemic, the center for disease control (CDC), in conjunction with IBM, developed a blockchain-based data-sharing platform. This was used to store, track, and protect health information in real-time.
Owning or investing in a "bubble" that solves problems and increases globalization is undoubtedly a risk many investors have proved they are willing to take.
INDEPENDENCE: The unique properties of cryptocurrencies are undoubtedly immutability and autonomy. By relying on unique protocols of verifying transactions on the distributed ledger, Satoshi was finally able to create a financial system independent of government and central bank policies.
Consequently, a system of trust and accountability began to grow on the users, and today there are over 6,000 cryptocurrencies with bitcoin leading the way.
Indeed, it remains to see how cryptocurrencies lead the next financial evolution the human race will witness.
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