As we know, blockchain technology has gained incredible momentum within the financial sector and others. What was once a public ledger system with the simple function of keeping track of value transfers within the network soon became much more. It’s now possible to apply blockchain to pretty much any infrastructure in order to benefit from its immutability and decentralized nature. Applications can be decentralized to mitigate hacks and server down time. Databases can be stored on private or public blockchains to ensure its immutability, and so on.
Bitcoin, the first implementation of blockchain technology, has also gained a lot of traction being a widely accepted payment system with few cryptocurrencies designed with the same purpose (payment system) coming close to its adoption and market cap size. The general direction in which the underlying technology that is found in almost all cryptocurrencies, blockchain, is headed has now moved away from the decentralized transfer of value into more ambitious goals like smart contract systems and decentralized databases and exchanges. While, many of the projects currently being developed in this realm of Blockchain like Ethereum, Bitshares, Waves, and others, rely on a cryptographic value token that introduces a monetary incentive to maintain and keep the network honest, their tokens are often not meant to be interpreted as a currency but rather as a “tool” that can be used to perform operations within its system. The value that is attributed to this currencies on the market not only reflects the demand and supply of the token but also its usefulness and unique features.
In the realm of currency, many countries seem to be considering a blockchain-based replacement for their paper cash systems, which will allow citizens to enjoy many of the perks provided by blockchain technology like lower transaction fees and fast international transactions while staying impervious to the volatility that currently plagues the digital currency scene. Among these countries are Sweden, Senegal and South-Korea.
While a blockchain-based national currency would bring price-stability when compared to Bitcoin, it also takes away from its decentralized nature, where no single authority controls the issuance or the transfer of the currency.
Although it is impossible to predict how the cryptocurrency scene will evolve in the following year, it is safe to say that its underlying technology, the blockchain, will continue to be studied and developed on. As for the future of cryptocurrencies themselves, it’s hard to say, but it is possible that the current economic crisis that plagues the entire world may play a vital role in the adoption of digital currencies like Bitcoin, Zcash and Monero.