A Journey To The Future Of Cryptocurrencies
Someone once said:
“Without a past, there is no future.”
I think we can’t disagree with this saying since we always have to look into our past to learn something new by either avoiding the mistakes we’ve done or repeat, improve and/or develop what we did right. This applies to the field of cryptocurrency and blockchain technology too.
Although it doesn’t sound like a very long time, twelve years isn’t a short time in the technology field, and I guess you will agree with me if I say the last twelve years were too long compared to the events we had witnessed through them. We got three US presidents, the end of a global recession and a new one that approaches our doors now, the Arab spring, a tsunami in Japan which caused a radiation leakage in Fukushima nuclear plants, an eruption of Eyjafjallajökull volcano in Iceland that disrupted air travel in western Europe and caused global chaos in airports, and many other events that end with Brexit and a pandemic which killed more than two million people so far.
For the cryptocurrency and blockchain field, it wasn’t any different. Bitcoin was created in 2009 as the first blockchain and Ethereum was released 6 years later with the promise to create the most secured platform for developers, other blockchain followed in the path with hard forks of bitcoin and Ethereum, and thousands of coins emerged as tokens from Ethereum smart contracts. Algorithms in turn started to evolve and we began to see debates about the differences between PoW (Proof of Work) and PoS (Proof of Stake) and the advantages and disadvantages of each of them.
During the latest years, we got a huge number of blockchain-based projects but most of their founders were mainly aiming for raising funds by launching ICO’s, marketing, and monetizing their own tokens. Unfortunately, most of these projects ended up nowhere and we ended up with a huge list of tokens that have low to no volume at all “according to CoinMarketCap we have more than 8,200 coins at the time of writing this article”.
With all of these in our minds, we should start thinking about the future of the cryptocurrencies field and how will it change to avoid getting back in the circles of uncertainty like those we’d gone through during the collapse of the cryptocurrencies market at the beginning of 2018 which lasted for more than two years.
There are many questions which need to be answered like:
- What is the plan for bitcoin supply since hodlers are increasing and the total supply is already low “21,000,000 BTC”? Where is the roadmap leading us?
- With the high usage of the ethereum blockchain currently and its high gas fees per transaction, do we have to wait for Ethereum 2.0 to be completely working till we see lower fees again? And how to avoid such a situation to achieve the promise of a lower cost decentralized technology?
- How can we avoid the increase of coins number to create a unified system of this technology?
Without clear answers to these questions and other issues that put this promising technology at risk, we won’t be able to predict a shining future for the industry.
What I personally see incoming is the extinction of a lot of coins and projects and most of them will end up as monetary value-less tokens inside their blockchain networks (like virtual coins in games) and won’t have value outside these networks. Weren’t they supposed to be that exactly?!
Technology cost is another big issue which we’ve on our table at the moment. The increasing usage of electricity to power mining machines is crazy and leads to many financial and environmental problems, these problems are imaginable if we know that the electrical power consumption for the mining of bitcoin alone exceeds the consumption of entire countries.
On the other side, the unbelievable increasing fees of transactions on many blockchain networks isn’t good for the crypto field, I saw many transactions which had crazy fees on ethereum last few months and although it’s good for PoS blockchain networks, it harms ethereum which have thousands of projects hosted on it. With these high fees, users are unable to do small transactions and thus many developers started to move on to other networks or terminate their businesses.
One more problem is the lack of effective blockchain applications for day-to-day life and this can be discouraging for the basic users to start adopting cryptocurrencies on daily basis usage. Most of the applications we see these days are geared towards enterprises and institutional use which let down the single users and left them with nothing other than the only usage of investing their money into cryptocurrencies.
That said, we can clearly see that all we have done so far is creating another store of value “SoV" asset and that all cryptocurrencies are still valued by dollars which is nonsense if we are considering cryptocurrencies a game-changer. Isn’t it crazy valuing a cryptocurrency in fiat to fight the fiat currencies spoiled system?!
Even when we tried to solve this issue the result was creating a few stable coins like Tether which is already valued in US dollars!
The only thing I can think of to exit this maze is to create a new base coin from the currently existing cryptocurrencies “like bitcoin for example” and value everything in it. To be honest, I see it as a “Mission Impossible” though due to all issues I’ve discussed above, we have to come out with a solution to separate the cryptocurrencies' value from the fiat currencies system if we need a real change.
So to summarize it all, till we find a solution to these challenges and more other security and cybercrimes challenges I think we’ll always have two parallel economies fighting for domination over the future economic world order.
I wish I’ve been able to shed light on some of the challenges that face cryptocurrencies in the near future.
If you like this article, you can support my writing by sending me a coffee at:
Or just press the clapping button ☺
