Mass Adoption Stifling The Bitcoin Network Evolution — Part I
By on ALTCOIN MAGAZINE
This article consists of four parts. Each part of the series will be released sequentially on a weekly basis.
Outline Part I:
1. Bitcoin disrupting the Traditional School of Thought
2. Blockchain Technology: How does it power the Bitcoin Network
Outline Part II:
3. History & Overview: Central Banks & Open Market Activities
Outline Part III:
4. Reasons for Slow Global Mass Adoption
5. Internal Challenges Facing the Bitcoin Ecosystem
6. External Challenges Facing the Bitcoin Ecosystem
Outline Part IV:
7. Use Cases Accelerating the Growth of the Bitcoin Network
8. Summary
Bitcoin Disrupting The Traditional School Of Thought
“Bitcoin Maximalists” hold the view that Bitcoin is the most exciting form of new sound money, and a brand new asset class, which is disrupting the traditional schools of thought and views surrounding the orthodox theories backing macroeconomics and international finance. The technology borne out of a fusion of cryptography and information theory in computer science, blended with game theory, which is deep-rooted in economics, is now causing a paradigm shift from the old way of thinking. Assets and contracts are now being valued according to a new world of smart contracts, Internet of Things (IOT), and tokenization of all types of assets classes. Bitcoin enthusiasts admit that Bitcoin currently suffers from certain constraints and setbacks such as scalability, high transaction fees, high price volatility, geopolitical risks, and regulatory barriers. However, the Bitcoin community strongly believes that these challenges are minor setbacks and will be addressed in time through its growing popularity among most millennial’s, who were born in the digital era and the early days of the Internet. The community also believes that the philosophy behind the network is attracting the best minds in the crypto space (e.g. developers, economists, lawyers, fund managers, academics) to build sustainable, practical, and efficient infrastructure that can propel global mass adoption of the network.
The fundamental question that always seems to emerge from skeptics of the Bitcoin revolution is, “what fundamentally distinguishes a Bitcoin from any other digital currency such as the dollar, euro or pound?”
Blockchain Technology: How Does It Power The Bitcoin Network?
Bitcoin is a decentralized peer-to-peer payment system, which is censorship-resistant, permissionless, borderless, finite in supply, and runs on a distributed ledger technology known as the blockchain. Bitcoin is also a new internet protocol that enables transmission of value over a communications channel. The blockchain is a database that records transactions, smart contracts, and other tokenized assets in real time (it is time-stamped) with its most valuable signature being its immutability and robust security features that protect it from being hacked by malicious agents. Bitcoin creates an exit strategy from the traditional flawed financial system through software code. Bitcoin, therefore, empowers an individual with financial sovereignty over past, present and future economic activity essentially securing their assets within its unique and secure network. This is made possible by recording all real-time data and transactions on its decentralized accounting system.
Blockchain technology is also a new architecture system of the internet which many futurists believe will replace the incumbent architectural system of big data, cloud computing and biological algorithms that are run by the current internet giants of our digital age Google, Amazon and Facebook.
So what sets Bitcoin apart from traditional forms of digital currencies? Bitcoin is the second form of sound money that has emerged after gold, which has been the most valuable medium of exchange in the last 5000 years. There are currently four forms of money that exist in our global digital economy. The first being Gold which some historians and market watchers refer to as ‘God’s money’. The second being fiat which is government money minted by central banks. The third is Bitcoin which is currently termed ‘the money of the people’. The fourth is corporation money, for instance, the (JPM coin) built by big investment banks such as the J.P. Morgan. Facebook one of the main Silicon Valley giants released its white paper on the 18th of June 2019 and is currently working on releasing its corporate coin in early 2020 called the Libra coin. Some die-hard crypto enthusiasts hold the view that Bitcoin might prove to be better than gold in the near future because it is scarce, rich in data, finite in supply (only 21 million produced), extremely portable, divisible, and without a central figure to manipulate its price. Market forces of supply and demand dictate the velocity of Bitcoin’s economic activity. Due to this fact that Bitcoin has no central figure and it cannot be manipulated by central banks. It also controls inflation through its finite supply of coins making it a true deflationary asset.
Disclaimer: The views and opinions expressed by the author in this article are for informational purposes only. The author makes no representations or warranties of any kind, express or implied about the accuracy, completeness, correctness, suitability or validity of the information contained in this article and shall not be liable for any errors, omissions or any loss or damage including without limitation, direct, indirect or any further consequential loss or damage arising from the use of the information contained in this article.
Any reliance you shall place on the information contained in this article is therefore strictly at your own risk.
Coming up
In Part II of the Series, I will dive into the history and the fundamental pillars of monetary policy by central banks. I will also explain how their flawed economic models lead to bubbles, downside risk and ultimately recessions in advance economies. The next chapter of the article will throw a spotlight on current issues that are slowing done global mass adoption and pace of the bitcoin network. See below for links to Part II of the series.
Big thanks to Stephanie Amarteifio, Valerie Findlay & Seliana Kaguamba for your invaluable insights and objective feedback!!
