Cryptocurrency is, in the scheme of things, extremely new. Bitcoin has been around since 2009, and during this time its value has skyrocketed to over $8000 for a single coin.
This eight year period has seen cryptocurrency burst into the mainstream, making headline news due to its ability to make ripples in international markets and change the way we think about money.
What’s more, the blockchain technology Bitcoin was built upon has the potential to totally transform how we store data, allowing us to easily build systems that are totally decentralized and transparent.
There are now hundreds of cryptocurrencies and ICOs out there, and more spring into existence every day. The birth of Ethereum in 2015 opened up the possibility for companies to build their own cryptocurrency tokens and blockchain-based applications, and the rise of crypto got even sharper.
Trading, making payments across borders, building ICOs, and drafting smart contracts—these are some of the main uses for cryptocurrency that have the potential to shake up society in a big way.
And we’re still in the first DECADE of this.
The future for cryptocurrency definitely looks exciting, and as the technology becomes more accepted by society we’re sure to see more and more innovative uses emerge.
But what could they be? What does the future hold for these infant technologies and how could they impact our lives?
Well, in quite a few ways, as it turns out. Let’s take a look at some.
In Venezuela, turbulent political events have left the country in something of a crisis. Their currency, the Bolivar, has lost 99.4% of its value since 2012, and this soaring inflation has had enormous effects on the way people live.
Many Venezuelans are unsure how to store their money safely. The banks don’t seem safe, and the plummeting value of the currency makes stashing physical cash even less reliable.
To deal with the uncertainty, many people in Venezuela rely on payments from relatives overseas who earn stronger currencies. But this money is tough to get into the country, and transaction fees are cripplingly high.
Their solution? Bitcoin. It’s a cheap, fast way to send money overseas without having to convert currency. What’s more, Bitcoin has proven to be a much more reliable way of storing currency than depending on an unstable banking system or a nosediving currency.
Other Venezuelans are turning to mining Bitcoin, taking advantage of the country’s low electricity cost to make money, a practice which has led to an aggressive crackdown by the authorities.
The situation in Venezuela is a strange reversal of that across the developed world, where people tend to see cryptocurrency as a less stable way of storing money than traditional banking.
In the rest of the developing world, cryptocurrency is being explored as a way to make aid payments easier. About 75% of all global remittances go to developing countries, and in Sub-Saharan Africa for example the average cost of such a transaction is 12% of the total amount.
This can obviously end up as a huge number, and with cryptocurrency those fees could be significantly reduced.
Blockchain also has promise for the third world. After Haiti suffered a devastating earthquake in 2010, a lot of property ownership information was lost. Now, blockchain is being explored as a possible way to ensure that information remains safe.
Blockchain’s inherent transparency and resistance to corruption makes it a valuable tool in countries where corrupt governments are common. Blockchain-based records can be used to prove ownership of property and land more easily, and are tough to falsify and alter.
E-Commerce (and commerce)
Buying and selling online has blossomed into quite the industry over the last couple of decades and with cryptocurrency this process has the potential to get even easier.
Cryptocurrencies like Bitcoin make it easier to process payments, avoid fees, and make transactions in record time. It’s also more secure, with blockchain’s distributed ledger eliminating a lot of fears around corruption and theft.
More than 100,000 merchants already accept Bitcoin, with huge platforms like PayPal and Shopify giving their users the option to use cryptocurrency. It’s possible that this kind of payment might well overtake traditional methods in future.
The change isn’t restricted to e-commerce. New software and apps will make it possible to use cryptocurrency in brick-and-mortar stores, too, perhaps even replacing credit card and cash payments in time.
Internet of Things
The internet of things has really exploded recently. Remote devices like speakers, cameras, and printers that link to your computer network are just the beginning, in the future we could see entire homes and businesses connected by this technology.
Obviously, this presents a pretty big security risk. As IoT devices are linked to the internet, they’re vulnerable to hackers and cyber criminals. Once these devices have been accessed, they can be used as a gateway to more important devices like computers. They can also be hijacked for use in DDoS attacks.
These networks are hard to defend at the moment, as many devices are rolled out of factories in a hurry to meet deadlines without investing proper time in security. The decentralized nature of the IoT is also vulnerability, as it’s tough to cover an entire network with one security program.
However, it’s the decentralization of the IoT that makes it such a good match for blockchain. They’re both distributed by nature, and the airtight security of blockchain helps ensure safety across a range of devices.
Keeping our data safe and proving that we are who we say we are has always been a big deal. In past decades, it was as easy as locking private documents away safely and always having a form of ID around.
Today, things are a little more complicated. In our digital world, data is much more vulnerable to hackers, and the Equifax breach earlier this year served as a harsh reminder of this.
There’s also a whole lot more personal data to worry about, ranging from our browsing history to our social media profiles. And while proving your identity in real life is often as straightforward as just looking like the photo on your passport, things are a little murkier in the anonymous world of the internet.
Fortunately, blockchain technology could have the answer to both of these issues. It allows for the storage of large amounts of data without the need for a third party—minimizing the risk of corruption and theft of details.
Confirming identity is also possible through blockchain. Some companies are working on giving people unique keys which can be cross-referenced with the encrypted blockchain to prove ownership of certain documents.
The process of democratic voting has always been difficult to do properly. There are many potential issues involved, ranging from election fraud to difficulty identifying voters.
Often, these issues are more serious in developing countries without an established democratic infrastructure, but they exist all over the world—as the controversy surrounding last year’s U.S. election showed.
To get around many of these problems and create a voting system that’s fair, safe, and resistant to fraud, some companies are looking into the possibility of using blockchain. Because blockchain is decentralized, it can be used to build a network of voters with no central point, making it much harder for a corrupt third party to tamper with results.
It’s also immutable, meaning the chain can’t be altered, so any attempts to change the results of the vote would either fail or be immediately obvious to everyone with a copy of the blockchain.
Voting via blockchain would also make the process easier for voters, as it could be done from home with nothing more than a webcam and some government-issue ID.
It’s unlikely that blockchain-based votes will take over in the near future, as there are still quite a few hurdles to overcome, but as the idea becomes more refined it could well lead to a big change in the way democratic elections function.