“Good and bad ideas both come from the same fountain of speculation and experiment”
The question is simple, why are we speculating on virtual assets that do not exist? The answer will be also that simple – because we are trying to find a way to secure our assets.
In the past, objects like gold were used to “protect” financial data based on the value human beings wanted to give to it. Today, the cyber security is the new gold, it is the way to protect a bigger variant and amount of data. By knowing that the most valuable asset today is our data, it is logical to imagine that the interest we put into cyber security will not be a bubble.
What makes Cryptocurrencies valuable/real?
Clearly explained in the Unchained podcast with Amanda Gutterman that I recommend you to listen, 5 specification elements are defining the monetary theory which are drawing the frame of a valuable money. Whitout that, be sure that the viability of the money will have some troubles (cf. Tulipe Craze).
By paying attention to those points, the Bitcoin and other Altcoins are fulfilling those criterias. More than that, they are pushing the current money limitations. Because it is digital, we can split it in unlimited fractional elements increasing in the same time the scarcity of the individual money.
In term of durability, except cutting the Internet (Good luck!), there is no chance that the asset disappears. Going even further, the durability of the asset could also go beyond physical frontiers, beyond political regime transformations, beyond all the physical limitations we could imagine today. The transferability is also improved by removing the middle man and the commissions. Exchanges are free, immediate and secure.
To those pretty interesting improvements, 2 more specification elements have to be implemented in order to surpass the current monetary system.
Trust, why is it so important?
Because since humans are humans, we are protecting our value, building walls, strong-box etc… Today’s bank system is facilitating assets transportability and transferability. What if law regulations could make it more difficult, like the latest exemple in Argentina, where the government decided to freeze bank accounts, forcing citizens to stay. We are living in a world where everything seems to be stable, but it could become absolutely nasty with the wrong elected guy…
Reason why the Blockchain technology is fantastically welcomed. A decentralised solution that is not belonging to anybody, any authority or any middle man. Nobody or nothing is able to have a finger on your valuable assets. Only you and your private key! (Don’t loose it!).
Regarding the trustability of the Blockchain solution and taking into consideration the fact that tomorrow, 8 billion people will have access to a global Wifi, it makes totally sense to go further in that direction. The security of the technology will be the key success factor. In three words : why not trying?
How security could be better than today?
Today, we are storing our values or assets in central places. If a hacker or a thief breaks the door, you loose everything. We’ve all heard about the Yahoo identity theft where more than 3 billion accounts have been hacked, devastating, but real.
Blockchain is working differently, it decentralizes the information. Your assets are split dynamically in smaller parts and in different places, in real time. If you want to break the “door”, you should break the code of all those places in the same time to be able to enter. Every transaction made is creating a new “door” to break and then building complexity to decrypt the code. Since the beginning of the Bitcoins, the code has not been broken.
To make it simple, so far, Blockchain is the most secure system the world has ever had. More than a bank which can do bankruptcy, more than a government that could change politics, more than a country that could be invaded. Your assets belong to nobody except you, and are everywhere!
What to do with?
The biggest question today is; how to implement it? Different Blockchain technologies are created days after days improving the system. Making it either faster, safer or even simpler. Major companies are still waiting a “stable technology”. Meaning they need a final viable solution.
To reply to the initial question. Acknowledged & Influential people think in two directions, it is a Bubble and it is not! Both of them could be right, but has Bitcoin a real value? It will depend and be defined by the trust & the value that people will put into it. Projects and new experimentations will support the attractivity of the Blockchain possibilities. It is just a matter of how we democratise it.
My personal indicator would be my Mom, the day she will ask me to explain her the blockchain (or to fix her blockchain), it would mean that companies of her interest, started to implement it…
I wish this article was fulfilling your curiosity… Comments are welcome!
Unchained Podcast http://unchained.forbes.libsynpro.com/how-to-explain-cryptocurrencies-and-blockchains-to-the-average-person