If this term sounds familiar, you might work in tech and nod enthusiastically whenever the term “blockchain” is thrown around the office. Or, you are like me — working in tech but lost in the sauce of crypto jargon — trying to wrap your head around everyone’s current obsession.
These days, I can’t log onto Twitter without being bombarded by enthusiastic bros, respected journalists and bitter naysayers with one word at the tip of all their tongues: cryptocurrency. And if their tweets are anything to go by, it is set to change everything.
The difficulty is that the space and its impact remain a mystery to many, and our natural fascination with the unknown has led to an array of hot takes that leave us in the same place as we started. I, for one, am totally lost. So, I sought to educate myself. Lucky for me, the stars aligned and I was given the opportunity to attend a Ripple panel on the future of cryptocurrency at a client’s event last week.
For those unfamiliar, Ripple is a technology that acts as both a cryptocurrency and a digital payment network. They dubbed the term “internet of value” in a quest to solve the issue of cross-border payments. While emails took seconds to go over, cross-border payments could take days or weeks, so they wondered: Why not find a way to send money with no friction, like you can information? Enter blockchain.
Led by Ripple’s VP of Product Asheesh Birla, the panel I attended mused on blockchain’s rousing potential and Bitcoin’s struggles, and offered a moonshot view of what a future dominated by cryptocurrency could look like.
Here are my main takeaways:
- Two things determine the value of cryptocurrency:
- People have to trust that the currency is going to have value.
- You need to have a use case.
- Today, less than 1% of the world has cryptocurrency. It’s a nascent space and nowhere near ready to disrupt traditional institutions — whether we’re talking about banks or investment firms.
- A key problem is infrastructure. It turns out that cryptocurrency is still very much “stuck in the 90s,”relative to where it projects the industry will be in ten years time, which is how long it will take to build a solid foundation.
And so, we wait. In the meantime, it’s interesting to see how the space is set to affect not just banks and VCs, but the rest of the tech world, as well.
Just yesterday, Facebook announced it is banning all advertising having to do with cryptocurrencies. This move isn’t totally surprising, given recent cries of disinformation surrounding the social giant, and the current lack of regulation around ICOs and scams ruining the credibility of legitimate blockchain projects. Robinhood recently introduced early access to a new crypto trading service. Amazon’s subtle investment in blockchain isn’t fooling anyone.
Nation states too want in on the action, with its prospect to help better identify tax fraud and terrorist activity, or simply enable a world where money is globalized.
On the flip side of all the innovation cryptocurrency promises, we know that mining is very bad for the environment (Bitcoin and Ethereum mining taken together consume more power than countries like Jordan, Iceland, and Syria), and that it remains widely unregulated.
Birla concluded his talk pointing out that “using Bitcoin is liberating in a lot of ways, but it’s also devastating to the earth.” This statement isn’t likely to leave me, and underpins the fact that we should tread lightly as blockchain and cryptocurrency enter the mainstream. As far as its consequences go, only time will tell.