A group of Bernstein analysts has recently reported on a publication this week that the cryptocurrency ecosystem is developing as what could be considered an alternative to the financial system that is spearheaded by Wall Street.
According to the report, the blockchain industry is creating a network that exists as an alternative system to the mainstream one, a parallel financial network, the report calls it. While still operating on the margins of the economy, the authors believe that there is potential for blockchain.
They state that with size and scale, there is a future for the cryptocurrencies in the mainstream market. The report argues that you could consider this new ecosystem that the blockchain industry is creating to be a market based innovation experiment.
This new experiment has issues, its true, like the scams and the other problems that plague the market and make a lot of money to be completely lost. On the other hand, the market is also far away from being useless or not having a certain value, researchers state.
A New And Experimental Market, Not A Bubble
Basically, the main argument defended by the Bernstein specialists is that a bubble would just be made of bad investments of scams that have no real value whatsoever and that have as a characteristic the fact that the market gives a very positive feedback to investments that do not have any real potential. They are, in short, weak businesses with a lot of hype.
The cryptocurrency ecosystem, on the other hand, is backed by a real technology that is very strong and important (although the tokens may have less value than the technology itself). Not only that, the market that is made by these tokens never closes for business. Therefore, it is able to serve as a natural correction system, the researchers believe.
Being a natural correction system means that this will be a 24/7 market that will always be open for business and that will create new ways to trade assets. It’s not only hype, as this impression is only caused because many failed companies have been aggressively pursuing funds using Initial Coin Offerings (ICOs) and many scams have appeared on this new market because of lack of regulation.
According to the researchers, Bitcoin was the first global exchange that is fully digital and is not controlled by any state or central authority. It works 24/7 and facilitates money transfers across the globe with low fees by using the blockchain technology.
The researchers from Bernstein have also cited how ERC20 tokens and the Ethereum technology have been a fertile ground for innovation and that many “killer applications” have been created for the platform.
The cryptocurrency market might be full of scams, fraud, regulatory uncertainties and problems like lack of a core infrastructure or volatility but the researchers believe that it has, indeed, a future, unlike the Dot-com bubble.