Bitcoin at 10: Industry Maturing, Experts Say
It’s Bitcoin’s tenth year anniversary. On 31 Oct. 2008, the whitepaper that birthed Bitcoin as a peer-to-peer electronic cash system was released by yet-to-be-identified programmer, Satoshi Nakamoto. The cryptocurrency was later made public by Jan. 2009 and has since grown to have a $109 bln market capitalization today.
What was proposed as a system for electronic transactions without relying on trust started with the framework of coins being made from digital signatures for control of ownership and prevent double-spending. The peer-to-peer network was made to use proof-of-work to record a public history of transactions that quickly “becomes computationally-impractical for an attacker to change if honest nodes control a majority of CPU power.” The whitepaper also brought about the emergence of the underlying blockchain technology.
While blockchain grew from a simple concept to a global community carrying the technology forward, Nakamoto’s envisioned bitcoin as “electronic cash” is yet to be achieved. Transactions per second on the Bitcoin network are still slow and the ease in user experience is lacking. There are also security issues as related to users’ wallets which is now allowing third parties that Bitcoin was supposedly created to avoid.
Speaking on what the future holds for decentralised technologies and crypto-assets, Lisk co-founder, Max Kordek, said the Bitcoin whitepaper and the subsequent blockchain movement laid the foundations for “a sustained phase of technological development” that is now maturing.
“Right now, the technology is maturing, but the next ten years will reveal the real fruits of the wider blockchain community’s labour,” Kordek says. “Nakamoto has inspired hundreds of dedicated teams around the world to build on his vision for a future powered by blockchain, a future in which individuals are empowered to bring real change to the world.”
Another industry expert who shared his views is Ken Lang, an early ndau collective member. He described Bitcoin as a groundbreaking innovation that has helped to understand people’s use of digital currencies as a unit of account, a means of exchange, and a store of value.
“The rise in popularity of bitcoin – and consequently, other tokens – has also taught us about the shortcomings of particular digital currencies for particular purposes. It’s led to trends that try to solve governance and volatility problems with bitcoin and ethereum – e.g. stablecoins – that show that the industry is maturing and attempting to solve its own problems over time.”
He adds that the next step for this industry will be to determine the best solutions to these problems by designing digital currencies that incorporate the best elements of bitcoin as well as other features to protect against the excessive volatility.
For Jehan Chu, a co-founder of Social Alpha Foundation, a not-for-profit grant-making platform supporting blockchain education and outreach, bitcoin may not be used widely as a store of value. This he says is because its technology has not developed enough to be used as a payment system. Rather, he sees upcoming projects like Connext and Lightning coming to solve the problem.”