The Blockchain Districts
At the dawn of 2017, bitcoin first touched a 1000 dollars trade value.
During the first half of the year, bitcoin, as well as other cryptos, begun its steep and silent climb towards a 4000 dollars valuation.
Now we are at the beginning of the year and bitcoin, after having reached its high against 10K dollars and having fallen once again against 6k dollars, it is now being cited by media outlets worldwide, and thousands of people have finally realized that something somewhere is creeping in a neo- anarchic fashion under the frozen bed of the old economy.
The World is being introduced to a new phase of blockchain applications, that will question several position incomes and that will ultimately force many operators to find new strategies to attract clients, instead of merely being the better broker.
And while people start realizing that if they had invested in bitcoin or other cryptos at the beginning of 2017, they would have now realized a 1500% gain, new companies specialize in financial mediation are now sprouting out of the old economy: consultants and journalists trying to intermediate at the heart of this revolution by giving advice on how to invest with new hedge funds (which could be over 120 by now) and with the first stock derivatives tied to the bitcoin value.
After all, faced by a technology that tends to destroy mediation, how can an istitutional intermediate agent reshape itself to still make sense?
Of course disintermediations can be fought against, or accepted to understand the new trajectories of demand, to test a system’s ability not live solely off its status, but rather to reinvent itself by proposing new services.
And it is also true that all disintermediations turns into a sterile destructive anarchy if the intermediary agents try to blindly fight innovation, instead of embracing it.
But is it at all possible to mediate the relationship with one of the fastest and most unrelenting revolutions in history? Or would we just be postponing the moment in which the new disintermediated economy will instate itself and demonstrate its new ecosystems to the world?
An ecosystem (a system of instruments and applications available to thousands of new users) was rapidly created over the course of a single year, 2017, allowing capital accumulation with an overall estimated value in dollars of hundreds billions.
This means that thanks to several new instruments of daily usage, people became aware of bitcoin and other crypto currencies in 2016, and in 2017 they have been able to start investing and making transactions in an increasingly simple and convenient way, aggregating capital in these currencies.
As a result there has been a consolidation of the plus value that has increased the value of the main crypto currencies with a speed and breadth never experienced before by any other asset in the world.
According to rumours from around the blogs, in 2018 the silent revolution expects a new crucial phase of this new economy.
There should be shift from the high-volatility trading on currencies, to the adoption of cryptocurrencies chosen to invest on industrial projects, aiming at the exchange of goods and services in the economy of new communities aware of their ability to achieve end-to-end interaction across the blockchain,acting free from any institutionally, economically or financially structured mediation.
In 2017 millions of people have been exposed to cryptocurrencies through simple resale and transactions, with the sole aim and function of achieving capital gains or realize returns.
In 2018 something more concrete might happen. Cryptocurrencies could start being used to purchase specific products/services
Many of the projects linked to cryptocurrencies, that were either kicked-off in 2017 thanks to large investments obtained via ICO, or that will be subsidized in 2018, will soon begin to be operational.
This will create hundreds of new products and services that will be used by an ever increasing number of people across the blockchain…ready to embrace cryptocurrencies as the exchange currency.
These products and services will allow an increasing adoption of cryptocurrencies, turning them from simple investment assets, into real “e-valute”.
It will be probably the manifestation of a true parallel economical system, discovering new worlds and creating an exchange currency for all those who settle in this new spaces. With the peculiarity that these worlds and spaces are numerous and keep being created at a rate and number that cannot be preestablished.
Economists have studied the phases that lead to the establishment of a new currency in a new economic system:
- At the beginning, the ability of the currency to preserve its value is tested. And this has happened and continues to happen to the cryptocurrencies with the increasing number of transactions and investments, which have soared in 2017.
- Then, the new currency starts being utilized as a proper exchange currency for goods and services. This might happen in 2018, when people will start using cryptocurrencies will begin to use the products and services that these currencies were conceived for.
Will 2018 therefore be the year in which the “blockchain districts” that were founded in 2017, and that will continue being developed on the web throughout 2018, will become populated adopting their respective trading currencies?
The currencies that will be utilized will certainly be all the cryptocurrencies that will have been able to pass the value retention test.
All these new “districts” are not parts of territory, they are in real terms new services and traded products that will become commonly used. And we are not talking about just any product or service. We are referring to products and service that use the blockchain to radically affect our daily routine.
Trading of assets and real estate transactions, registrations of deeds and personal identification records, exchanges of commonly used products, creation of stock market, sales of goods, creation of database, and much more… In practice, everything we do in our daily routine, one day could be done by using a block chain.
A year ago, thanks to the advice of economist Hernando Soto, Georgia introduced a blockchain technology application that allows you to set up new companies through a phone app. Georgia in a year has increased from 37° to 9° place in the ranking of the most efficient to open a business.
The block chain is a system more safe, efficient, flexible and fair of traditional systems, so there is no big company, no bank, no private or governmental institution of any importance that can afford not to evaluate or experience the way of having all their activities on the block chain. We probably will have the opportunity to witness the manifestation of something that will be adopted by all mankind. A better opportunity.
We are dealing with a technology that is making possible the beginning of a new civilization in a somewhere else right next to us.
And it is not by utilizing the bitcoin as a decoy device, that the old system of financial mediators will manage to keep people at bay. And the bitcoin probably will no longer be an essential element to this revolution. Even if for many people the lines between the disruptive blockchain technology and the most famous virtual currency are still blurred, in reality the bitcoin is merely a derivative of a technology that holds the potential to quickly change our World.
The real difference between the two is that while the bitcoin could burst into bubble, the technology is about to reveal a new economic dimension: “The blockchain districts”.
The so-referenced distributed ledger, the chain of blocks upon which is shared the database that allows securely managing any type of transaction, could one day cause the fall from stardom of many intermediary bodies of our current economy.
According to the Israeli prime minister Netanyahu, banks are fated to disappear with the advancing of the blockchain technology. And while it is still uncertain whether this will happen tomorrow, or whether it will be caused by the bitcoin, this statement is very telling of the blockchain potential to become the engine of a radical change of the economic and financial universe, with an impact that clearly surpasses that of Napster on discography, that of Uber on mobility, and that of Diners on finance.
If in 2016 to purchase 1 bitcoin one had to spend 117 ethereum, on the last day of 2017 a bitcoin was being traded for only 19 etherums, an 83% decrease. The same holds true for the phenomenal Ripple (7.587 XRP for 1 BTC compared to the 149.928 at the end of 2016), and so forth for the other main currencies.
These are the first signs of something that in 2018 will change the face of this revolution.
Cryptocurrencies could be adopted as new exchange currencies and not only as generic trading instruments, and will begin to circulate in the new ”blockchain districts”, generating highly integrated and complementary ecosystems. Some currencies will disappear forever, because they are not supported by valuable products and services. Others however, are highly likey to increase in value gaining a level of fame that will equal or surpass that of the bitcoin.
