There’s been a lot of talk over the last year—and even more over the last few weeks—about the roller coaster ride and alleged eminent crash of Bitcoin. Sometimes it feels like all the news is negative, and the naysayers simply can’t wait for the currency to flatline. Part of that, of course, is the nature of the reporting business. All the same, the overall mood seems cynical at best.
While some industry insiders remain bullish on cryptocurrency, it’s hard to envision Bitcoin being accepted by the masses anytime in the next 10 years. Who wants to sock away a form of wealth that could lose 90% of its value in a year’s time?
It could be argued, of course, that people do the same thing when buying stocks, but it’s not really a fair comparison. If nothing else, stocks represent ownership of something larger. Bitcoins represent ownership of … Bitcoins. At the end of the day, cryptocurrency is really only something useful for making transactions. That’s all it does.
To illustrate why this matters, let’s say the bottom drops out of the gold market. Suddenly, the $2 million in gold bars you had yesterday are worth, say, $200,000. Ouch.
But here’s the thing: you still have the gold bars! You can make something with that—jewelry, circuit boards, whatever—and hopefully still recoup some of your investment. On the other hand, the Bitcoin that was worth nearly $20,000 a year ago is worth $3500 today … and all you have to show for it is a Bitcoin worth $3500. The average man on the street isn’t willing to take that kind of risk.
Cryptocurrency isn’t the whole story, though. It never has been.
The Value of Blockchain
I’ve said before that the real value of cryptocurrency is the technology upon which it’s built and operates: blockchain. Even people in the fintech industry sometimes have trouble separating blockchain technology from cryptocurrency as a whole. Not nearly enough people understand what the blockchain is, how it works, and the opportunities it presents.
That’s why it’s critical that thought leaders help the public distinguish between the blockchain and the currencies exchanged through a blockchain. Cryptocurrency was invaluable to blockchain, serving as both a proof-of-concept and brilliant advertising. However, blockchain and Bitcoin are not the same thing.
Here’s another way to look at it: today, iPads and other electronic tablets have industrial and commercial applications that range from inventory control to medical diagnostics, from shipping and logistics down to ordering and paying at a neighborhood restaurant. With all of that, sometimes it’s hard to remember that when they were first introduced a decade ago, iPads were mostly sold to consumers, and let’s face it: in the beginning they were primarily used for playing solitaire.
Tablets are an important part of our culture and economy now, but they essentially debuted as expensive toys. That start proved the concept was viable, which in turn brought app developers on board, and the entire process snowballed.
Moving Beyond Crypto
I believe what we saw with the iPad can happen with cryptocurrency and blockchain. Everyday people look at the nature of cryptocurrencies and can’t wrap their heads around the lack of any intrinsic value. But the blockchain concept does have intrinsic value, above and beyond the value of Bitcoin.
As a tool, the blockchain concept holds tremendous potential. It can make processes easier, more efficient, and more cost-effective across a wide range of industries and applications, including banking, medicine, retail, realty, government, and more. The inherent security factors alone have the potential of revolutionizing our voting system.
But that is never going to happen if we continue to keep all of the focus on Bitcoin. We need to move the conversation beyond cryptocurrency and start concentrating on the other possibilities that blockchain represents. We need to be exploring blockchain’s capabilities, its compatibilities with current technology, and yes, even any plausible dangers.
I’m not saying that every single consumer needs to fully understand the ins and outs of blockchain operations. The more we talk about it, however, the closer we come to bringing blockchain into the mainstream, and that’s when we’ll start to see real progress.
