Blockchain-Internet 2.0
Blockchain and Bitcoin is now used synonymously but in reality, Bitcoin is just one of the application of blockchain. Blockchain technology has got a wide variety of application and we have just experienced Bitcoin only. These were backed by the idea that Bitcoin/Cryptocurrency is the new gold rush of the 21st century and people were interested to buy more and more of Bitcoins or Cryptocurrencies and which impacted the whole economy all over the world. Hence the new gold rush had captured the attention of investors, developers, entrepreneurs, non-government organizations, central banks and the regulators all over the world. This was caused by the idea that we would be witnessing one of the largest transformation of wealth in human history, from going analog to digital and would change our lives like no one would have imagined.
Then comes the most important question is this all a bubble? Well the most famous bubble which we had come across is dot-com bubble which had its ups and downs but had paved way to a new way of life Internet and companies like Google, Amazon, and Yahoo! also was there but ya these companies were part of the dot-com bubble and survived. These companies have a lot of influence in our life as we speak and are influencing by providing different services from Big data to Alexa. The Internet has changed how we live our lives in the past two decades and would continue to do so, which I strongly believe. There were people who perished during the dot-com bubble but that’s the case with all bubbles, some would become survivors and others might perish, but in the end, the majority was able to get the benefit. So the ones looking for quick bucks were the ones who got their hands burned in the process but otherwise sorted out the whole business model in a sustainable manner. Even though the Internet and world wide web were popularised by Mosaic but it wasn’t given due credit it needed and subsequently was licensed by Microsoft to create Internet Explorer Internet.
In this aspect blockchain and internet differ a lot, the Internet is a free utility built by different stakeholders and diverse groups with many of them having little or no financial incentives. Blockchain as such doesn’t have the same mentioned issues blockchain would provide huge financial rewards to the persons involved in building a scalable model through the appreciation of underlying crypto assets during the course of time. Unlike the Internet, in Blockchain the early adopters and creators can participate directly and financially in the growth. The most important aspect of the whole blockchain is that it is addressing value industries like the supply chain and financial market, unlike the Internet which was after media and publishing. So the impact is more.
- Cryptocurrencies
- Platforms
- UtilityToken
- Security Token
- Fiat Currencies
Cryptocurrencies
Most banks are supporting blockchain but tactically dismissing cryptocurrencies. Most of the major banks all over the world once said that cryptocurrencies are fraud. But as the time passed banks have started to know the potential threat it posses and the opportunity it has. They face the risk that the payment processing and other services can be disrupted by technology like cryptocurrency where it requires no intermediation. Bitcoin itself has taken the world by storm and has paved the way to many more cryptocurrencies like Etherium, Bitcoin Cash, Ripple to name a few.
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Platforms
Bitcoin and Ethereum would sound similar to most of the folks out there but they are not if you examine closely. Bitcoin can be said as a cryptocurrency designed as cash for the internet but that’s not the case with Ethereum. Ethereum is a platform technology designed for distributed applications(DApps), an application that runs on a distributed and trust minimized manner in a blockchain. At the core of the Dapps, you can find smart contracts software that can mimic the logic of business agreements as well as contracts. Since they are decentralized and would be running on the blockchain there won’t be any need for intermediaries like banks, brokers, lawyers, courts) as guarantee of execution. Which has made Etherium as the most prominent platform for ICOs(Initial Coin Offering).
UtilityToken
ICOs are an investment opportunity for most of the folks out there as it is an investment in the company itself and most tokens qualify as securities. But if any token doesn’t pass under Howey test, then it is considered as utility token. Utility tokens are not stand alone blockchain. They run on top of different platforms like Ethereum, ICON.
Security Token
The underlying technology of cryptocurrencies, blockchains is broadly applicable to basically any assets in the world.Why would anyone wait for T+3 days to get the settlement of the stock trade and involve intermediaries when the settlement can be done in T+0 on decentralized exchange. So all the non-physical securities like stocks and bonds can be migrated to this technology easily.
Security Token = Investment Contract
This transfer or migration of asset class from analog to digital would transform the world as we know especially market and the intermediaries.
Fiat Currencies
Nations all over the world have started their own cryptocurrencies. In 2017 Venezuela announced that they are launching a new cryptocurrency dubbed “The Petro” and was able to raise $735 million according to the sources. News of Petro was followed by countries like Iran and Russia considering their own fiat currency.
Crypto fiat currencies won’t be fully decentralized and censorship-resistant like other cryptocurrencies but if implemented properly would make markets more efficient through real-time settlements, more transparency into account and direct intervention of Central Banks policy.
So the future of the world would be like a mix of crypto-fiat currencies and decentralized cryptocurrencies .
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