The future beyond BitCoins
Even though the bitcoin concept has lately loss some credibility, its technology still has growth perspectives since it is applicable to many other business sectors. The big hit to his reputation was received with the bankruptcy caused by a 450 million dollars theft by Mt. Gox, probably the most important bitcoin exchange (one of those online places where you convert real dollars in bitcoins). Than there were the Chinese and Indian prohibitions and the IRS decision (Internal Revenue service) to fiscally penalize bitcoins by considering them an investment and not a currency. From the beginning of 2013 till today, a period that lasted less than a year, the value of bitcoins highly volatile, switching form a value of 14$ to another of 1200$ in November. Today a bitcoin is worth 431$.
Bitcoins have definitely seen better days; however, some parts of this bauble will probably have the chance to survive and develop. Bloomberg for one has been putting together some of the initiatives that have been born based on bitcoin technology. The system element that can be used in tons of ways is called “blockchain”: a public and shared transaction database that permits to verify if someone who makes a new transaction actually owns that specific amount of bitcoins. Mark Andreessen explains it this way: “If you trust unknown people online, which are guaranteed by the blockchain system, you can reinvent sector after sector".
On the investment side, the most active are the Venture Capital firms Andreessen Horowitz and BitAngels, two clubs focused on bitcoin related startups. David Johnston, BitAngles founder, believes that: “People are just starting to realize that bitcoin is not only a currency or a payment method but we are dealing with the Internet of money”. The blockchain technology has also started to be tested on various scenarios; all of those where authenticity is needed and where there is some competition in commission margins.
Following, some interesting applications in the fields of:
Stocks online trading. BitSharesX is an online broker, and a digital bank, that will be launched within the year, its objective is to guarantee to its clients an additional safety feature by making transactions public. This is something that traditional banks cannot guarantee and it leverages todays’ limited trust on other financial intermediates.
Traditional Financial Institutes. Some of them are starting to think about how to use blockchain for internal operations. JP Morgan is working on a concept that resembles the bitcoin system while Standard Bank based in South Africa and the biggest bank in the continent are starting to make experiments with Switchless a Singapore company about the use of bitcoins as part of the bank system.
Than we have the e-commerce, which, even if it developed quite a lot, it still bases the most of its transactions on PayPal or other intermediaries in exchange of a commission will ensure the correct execution of the transaction. According to Michael Terpin (BitAngles) there is a reach of 10% of the value of all made transactions: 120 billions of dollars to manage with blockchain systems will probably leave not much to intermediates.
Moreover, one of the most interesting and visionary applications is the Online Voting, on which there is loads of rumor. The idea is to integrate the blockchain technology to platforms such as LiquidFeedback in order to increase the credibility and enhance the role of political choices and direct participation.
Anyway, It is possible that the best innovations are not about to be released yet. In fact some companies such as: Mastercoin, Ethereum and Colored Coins are providing only the raw blockchain technology in order to be used for different purposes.
Di Federico Invernizzi, su Twitter come @federicoinv