Bitcoin vs. Blockchain: Who wins the race in 2018?
This year marks the 10th year for bitcoin and its underlying technology — blockchain. Conceived by Satoshi Nakamoto in 2008, bitcoin and blockchain are often ticked off as “the revolutionary technological innovations with a potential to change the world”.
Well, bitcoin and blockchain technology might be viewed as wrapped up together in the same solution, both lock up different trademarks that strike an interesting debate as to who eclipses whom and who stays unbeaten in 2018.
In the heat of the moment
While many may think bitcoin has cut the mustard, a vast majority cannot brush off its exposure to a market that takes wild daily swings in either direction. Its surging prices and catapulting valuation can’t be flashed as a stable payoff seeing its recent tumultuous gain and plunge.
The menacing volatility of bitcoin makes it highly unacceptable for real-world trade use cases and has put the digital cryptocurrency in a place where it can witness a severe crash. Its excruciating volatility results in price fluctuations where it can go as high as 10 times the current price in USD and fall to 20–40% in a relatively short period of time. Consequently, market witnessed some big names like Steam parting ways with bitcoin. The company will no longer accept bitcoin as a payment method and attributed its big decision to cryptocurrency’s “high transaction fees and volatility.”
Apparently, bitcoin’s intrinsic value lies in its utility as a medium of exchange — something that has turned out badly for the cryptocurrency because it can’t be used as a mainstream payment system like normal currency, anymore. Why would a merchant take such a currency where few seconds (let alone few hours!) can make a big difference in the price? Merchants will never accept an extremely volatile currency that could be worth greatly more or less than the label price of goods by the time they deposit cash in their bank accounts. Even if they agree, it is highly likely that they will demand a premium to safeguard them from the risk — something that makes bitcoin a less attractive affair for consumers.
On the other side, bitcoin’s store of value is mostly supported with explanations about how it’s an exemplary medium of exchange. With history as our guide, bitcoin will definitely lose out as a dependable medium of exchange in year 2018, leaving it with no practical utility and intrinsic value.
Best thing since sliced bread
It goes without saying bitcoin’s real power lies in blockchain — the distributed ledger technology. While people often inadvertently use “bitcoin” to mean blockchain, the undying reality is: bitcoin is only a specific case or application of blockchain. Unlike bitcoin, its underlying blockchain Technology is widely accepted by multiple banks and exchanges to process financial transactions.
The technology that was established particularly for the cryptocurrency can be adapted for real world use-cases. blockchain can be used for a much broader range of financial and non-financial use cases and any asset — tangible or intangible.
2016 and 2017 saw blockchain domineering Gartner’s Hype Cycle, fraternizing with independent vehicles, technical research, Internet of Things (IoT) and other such magnates. While 2018 will witness more and more people jumping on the bandwagon, it will also prove to be the year when blockchain Technology goes ‘run of the mill’. From digital currencies becoming mainstream, new initiatives arising, stringent regulations being made by governments embracing blockchain, 2018 has a lot in-store for the game-changing technology. The year will spot numerous enterprise use cases and consumer apps build around blockchain.
The blockchain technology that is often defined as a ‘financial technology’ can also be utilized for substantial non-finance use cases. Undoubtedly, the first application of blockchain was around crypto (bitcoin), innumerable blockchain and IoT based customized solutions can also be deployed across segments like business process re-engineering, supply chain, human resources, healthcare, aviation, energy, travel, legal, auto, and many other non-finance sectors.
This will definitely be an encouraging sign for businesses on the fence for deciding whether to execute Proof of Concepts (PoCs) or not, in 2018. Nevertheless, many enterprises have tried hands at blockchain this year and last year; executing several PoCs across different use cases. And, these use cases move into production in upcoming months. Even, the global trade finance will see a larger and more meaningful use of blockchain technology in 2018.
Hitting the nail on the head
While bitcoin’s drama and continued future uncertainty puts a question on its use going mainstream or whether it becomes a victim of its own success, blockchain’s utility and potential speaks of good times where enterprises and governments can leverage the ace technology to make a difference to the world. Therefore, blockchain emerges as a clear winner in 2018!