Any disruptive technology has to face its fair share of challenges in its nascent stage of growth. It could be electric cars, it could be 3D printing, or it could be the most successful cryptocurrency in the world. They are all still used by a rather small percentage of the world population, although we know that they are the future. Bitcoin is making people take notice of cryptocurrencies and has taken the world of financial services by storm. The symptoms evident in the financial services sector today are similar to what the mass media showed in the nineties. So, is bitcoin on the path to becoming the next internet? Let’s try to understand the comparison.
Both are not owned by anyone
Bitcoin is a revolutionary concept. There is no one authority that controls the bitcoin. Governments or any private players do not control the value of this currency, unlike the national currencies of the world. In effect, it is shielded from any changes in the monetary and fiscal policies of a country. Bitcoin works as a peer-to-peer network. Users and transactions are added to a shared public ledger. This is called a blockchain. If there was a voluntary project, where people publicly updated all their Master Card transactions, then that would look very much similar to a blockchain.
The decentralized nature of the cryptocurrency is very similar to the internet. No one organization or government owns the internet. This is the very reason why the internet has become synonymous with freedom. In the 1990s, media houses coughed at experts who claimed that news will be read online in the future. With all the major media houses moving online today, they are not coughing so much now.
Both offer easy access to everything in their domain
The internet was initially built as a mode of connecting universities and other research institutions for sharing knowledge and working in a collaborative mode. As the internet grew, it offered a lot of information freely to the users. This information was locked away in books, which were locked away in libraries inside the universities. You had to be either a student or a professor at the university to have access to that information. The internet got rid of these restrictions.
The same kind of free access is what is making Bitcoin popular as well.When people pay via regular payment networks, they have to jump through a lot of hoops. Imagine applying for a credit card. You need a good credit score to be eligible and get a high credit limit on the credit card, comply with a lot of regulations, and then you have to pay a fee to keep using the card. On the other hand, Bitcoin is like an open field. Absolutely anyone can use it. There is no regulation or limitation on how bitcoin-based services can use it. Since there are no rules, everybody is eligible to use it, and there is no fee.
Both offered fertile ground for experimentation
The internet in the eighties was not as friendly as you see it today. It took a patient and determined user to work through the minutes it took to open a website. It would take anyone hours to get anything useful out of the network. But, these challenges and the complete freedom to tackle them gave us the most innovative companies like Google, Amazon, and what not.
This is true for bitcoin as well. The freedom to innovate is tremendous in this space. It can make international money transfers faster; it can make transactions dramatically more secure; it can even create services that do not even exist today. The blockchain technology that powers bitcoins has the potential to make the financial service sector stand on its head. Does this sound familiar?
It is not radical anymore to think that an unregulated currency like bitcoin will become a mainstream currency today. But, like the internet, the currency is gaining ground. Financial institutions are also dabbling with blockchain technology using Enterprise Ethereum, Hyperledger, or even by creating their own standalone platforms. It is possible that all players in the financial world will have to upgrade themselves to this new development as media houses were once forced to do so, after the advent of the internet.