After reading many articles on various cryptocurrencies, the question still stands for me: what is the future of cryptocurrency? Is this something that is going to completely take over in the future, or will it just be more of a supplement to our current banking system? Once again, I went to the professionals here in the office, and a couple of other places to get a hint of where things may be going.
If you were to take a good look at cryptocurrency, it can be compared to what happened with the music industry when peer-to-peer (P2P) file sharing started. It started up with Napster, and suddenly we see that we can hear music from mp3 files, and we don’t have to buy the music records. As a result, it strongly affected the music industry. There used to be lots of music stores, and now they’re almost nowhere to be found. The evolution of P2P file sharing software completely shook the music industry. Right now there is sort of a middle ground where it is taken by applications such as Spotify and Apple Music, who offer the sort of service that people nowadays expect, instantaneous, fast and able to stream and download their music from anywhere. Music companies, who previously had very strong ties with music stores, would not have agreed to do something like this; they would have wanted to keep the status quo. But something outside of their control shook their foundations, and gave it rise to what we have right now, which is to be able to stream or download music anywhere. So the same thing will happen with cryptocurrency. Bitcoin is shaking the foundation of the banking system and the financial system, and either they evolve to how people expect to use money or they will be completely taken and be obsolete, and Bitcoin will take over. The same way Spotify and Apple Music took over the music industry, the same thing is happening where the foundations are being shaken for the financial industry.
What I mean by “what people expect” is that we’re so used right now to communicate instantaneously with anybody by email or text messaging. It’s instantaneous and it’s free and borderless. We can talk to anybody anywhere in the world, but to transfer money, to transfer value, is much more difficult. It’s sometimes easier to physically take it and give it personally than it is to wire it. It’s cheaper and faster. But how is that possible in the age of email and messaging? We expect to be able to send value in the same way we expect to send an email: just put the name of the account and send it. But the fees are so high and it takes so long that it just isn’t right. The financial infrastructure didn’t evolve the same way the Internet did. So logical conclusion is that the banking systems need to evolve in order to stay pertinent.