Analyzing How Society Will Use Bitcoin And Cryptocurrencies In The Future
Lawrence Wintermeyer, a contributor at Forbes, interviewed Navroop Shadev, Economist and Fellow at MIT Connection Science. During the dialogue they had, they talked about virtual currencies and the future of the space 10 years after Bitcoin was created.
Since virtual currencies became famous in the last years and months, there are some analysts and experts that are already studying the effects that virtual currencies will have in the future of our society.
At the moment, there are many experts that think in a very different way about the future of virtual currencies. Nouriel Roubini, for example, says that virtual currencies are worth zero. However, there are some companies such as the Intercontinental Exchange (ICE) that are developing services specifically designed for institutions.
So as the industry is divided on whether virtual currencies will revolutionize the financial landscape, Wintermeyer contacted Navroop Shadev to better understand how the industry works. Mrs Shadev is an economist that specializes in blockchain technologies and cryptocurrencies.
For Shadev, cryptocurrencies can be very valuable to the global economy and to the society. She explains that money has played an important role in the evolution of society and this could also be the case of Bitcoin. As she explains, money works as a store of value, as a medium of exchange, as a means of payment and as a common measure of value.
She mentions that as we have developed the internet and a worldwide digital world, there is a growing effort to transition from a physical asset as a store of value to a digital way that would allow us to store value.
Shadev was later asked whether cryptocurrencies are a suitable alternative to fiat e-currency. She answered that virtual currencies could serve as a stable store of value in a world where the value of fiat money is related to the actions of national governments. There are some countries that have high inflation rates and economic instability where virtual currencies could work. Governments are currently not able to change the future of virtual currencies, indeed, cryptocurrencies are decentralized and would continue in this way.
About mass adoption of virtual currencies, she said that the technology adoption lifecycle can serve as a useful framework in order to understand the rates of adoption of a new product. And this can be applied to cryptocurrencies in general, including Bitcoin. Nevertheless, in order to be adopted worldwide, Bitcoin would need to have a stable price.
At the same time, she explains that mining decentralization is also an important issue to solve. Most of the mining power comes from China, and this is something that does not help in terms of decentralization. Furthermore, cryptocurrencies will also have to deal with regulations imposed by governments, and sometimes, these regulations might not be ideal.
She then talked about the comparison between cryptocurrencies and the early days of internet and e-mail. For her, this is a very useful comparison that helps explain where the society is in terms of blockchain adoption. About it, she says that there are several Initial Coin Offerings (ICOs) and projects that are developing their platforms, something that is very positive for the industry.
Shadev commented about it:
“A lot of the projects that have managed to raise millions of dollars in ‘blockchain funding’ are yet to build out their technology platforms and hence the comparison with the early days of the internet.”
At the end of the interview, she said that from an Innovation Studies perspective, the emerging tech has the potential to transform the business as we currently know it.