Bitcoin and the blockchain technology behind it have been grabbing headlines across the world for some time now. While the majority of these headlines are in relation to the popular cryptocurrency's astronomic 2000% increase in value on the Bitcoin Price Index (BPI) over the course of 2017, there has been a quieter revolution taking place behind the scenes.
The skyrocketing value of the price of Bitcoin, which hit $7500 per unit in November 2017, and $19,783 per unit the next month, has both propagated and been the result of a increasingly widespread use and acceptance of Bitcoin and other e-currencies as a legitimate form of currency. Once seen as a fringe phenomenon advocated by tech nerds, the events of 2017 proved that Bitcoin and other cryptocurrencies have the potential to completely change how we see money.
The Bitcoin gold rush was one thing, but the acceptance of it as a legitimate form of payment by some of the world's biggest companies, such as Microsoft and even the popular holiday agent Expedia, have shown that cryptocurrencies and blockchain technology have the potential to change the world as we know it. There have been a number of developments in recent months which you might have missed, all of which tell us that Bitcoin and blockchain are on a precipice. Let's take a look.
How Blockchain Has Continued to Rise
While one might be forgiven for thinking that the adoption of Bitcoin by Expedia was an isolated PR incident confined to the events of 2017, events since then have shown that blockchain technology is being adopted far and wide.
In 2017, one of the largest payment processing platforms in the world, Alliant Payment Systems, entered into a partnership with BitPay to allow for users to process payments with Bitcoin. While this news didn't exactly make global headlines, the implications of this decision have raised the bar in a way that will affect us all. Alliant processes payments for organizations, many of which are e-commerce sites and small businesses, but the most striking detail is that Alliant also serves clients including major medical providers, NGOs, non-profits and government-associated bodies. By extension, this decision means that some of the biggest and most important service providers in the world are now enabled to use Bitcoin to run their operations.
Over on the other side of the world, one of South Korea's largest telecommunications companies, LGU+, recently launched an overseas payment system that uses Blockchain technology to circumvent overseas transaction fees and increase security for labetrge transactions. The service has been launched in collaboration with Japan's SoftBank and the US-based TBCASoft, and highlights how the key features of blockchain that were once considered suspect, such as the anonymity and ability to avoid fees and taxes on payments, have become accepted by big business and beneficial for customers.
With vital and popular services suddenly stepping up to embrace the blockchain to improve user experience, the next important question is what the future will look like for businesses that we use every day?
The Future of Blockchain Currencies
Developments such as these have given rise to flurried speculation about which industries will be the first to adopt Bitcoin as a mainstream form of payment. One sector which has seen an unprecedented boom in Bitcoin transactions is the real estate market, with the last two years seeing entire real estate firms such as Bitcoin Real Estate being established to help facilitate such transactions. Although such transactions are limited mostly to the luxury real estate market in tech-heavy areas such as Silicon Valley, it offers a glimpse into how blockchain could be used for larger transactions in the future.
On a smaller scale, digital service providers in the entertainment sector are also considering how such technologies can be adapted to fit their users. One such example is the online casino industry, which has long embraced emerging technologies to improve their operations. Online casino Betway argues that a million dollar Bitcoin is needed to facilitate regular gambling with the cryptocurrency. Such a model would admittedly require the value of Bitcoin to rise in value by a large amount so that smaller units (Satoshis) could be used to bet with, but such a future does not look too far off.
Will Governments Step In?
The explosion of a new currency and monetary system that does not recognize national borders and allows for uninterrupted, unchecked flows of real money should naturally be of concern for governments and regulators. As well as concerns surrounding money laundering and tax avoidance, governments are finally waking up to the potential of cryptocurrencies as a state revenue source and a way to improve efficiency.
For now, at least, most governments have chosen to embrace the positive aspects of blockchain rather than focus on the potential negatives. For example, the British government briefly considered using blockchain technology to distribute welfare payments and monitor student loans, since blockchain reduces the margin for potential errors and fraud.
Meanwhile, tech-savvy Singapore is investing in a blockchain networked aimed at increasing the efficiency of the tax and investment system. On the other side of the spectrum, economic giants like China have taken major strides to attempt to ban the use of Bitcoin and blockchain altogether, seeing it as a threat to the rules-based order.
Whether blockchain will turn out to be embraced or scorned by governments worldwide remains to be seen.