While centralized banks are still very much running the global economy, the rise in the popularity of cryptocurrencies and blockchain technology has been exponential over the last few years. Indeed, the concept underpinning this technology, which eliminates the need for a central system to keep records and instead sees them spread around everyone connected to a network, is already being used by a number of multi-million dollar companies.
For example, Airbnb, along with other companies making their money within the sharing economy, uses blockchain technology in order to ensure only reputable home letters are able to advertise on the site. By storing people’s identities on the blockchain, potential customers are able to verify whether a host is trustworthy by checking their ID number.
In this way, blockchain technology has already proved itself to be a useful and trusted way of storing information, and its potential to become a mainstream way of managing the global economy is clearly burgeoning.
Despite the ingenuity and security of blockchain, however, cryptocurrencies have been treated with suspicion by much of the media and the general public as Bitcoin, Ethereum, and Litecoin have become household names.
In some ways, this is understandable considering the fact that many people would have first heard of currencies such as Bitcoin in media coverage related to underground organisations including the Silk Road and other sites encouraging illicit activity.
There is also a sense that the world of cryptocurrencies is an esoteric one, with Dogecoin (a currency based on an internet meme), for example, turning the new technology into somewhat of a joke amongst the technological elite.
However, there is a case to be made for the success of cryptocurrencies and their potential shift into the mainstream. In part, this is due to the fact that banks are looking into adopting blockchain technology in order to keep up with the changing face of the world economy.
The People’s Bank of China and the Danish central bank are already running trials and developing strategies for their own blockchain systems. Bitcoin, meanwhile, continues to rise in value every year. Full-scale adoption of the blockchain could be much sooner than we think.