Bitcoin is undoubtedly the best known digital asset, cryptocurrency, whatever you want to call it, but it is “just one asset class among many that are here to evolve financial services globally,” in the opinion of Julian Sawyer.
As Sawyer points out, blockchain technology has brought the finance sector to a crossroads, and we must now consider what the future of money is going to look like. Of course, this is a topic that has been contemplated since the birth of Bitcoin, but things have moved along since then. He says, “a myriad of outcomes is possible but one thing is for certain: The efficacy and innovation of the technology will influence well beyond traditional financial sectors.”
Arriving at maturity
Blockchain offers a faster, more efficient and more secure structure for financial transactions compared with the traditional financial system. The Harvard Business Review said, “The old financial structures] are like rush-hour gridlock trapping a Formula 1 race car. In a digital world, the way we regulate and maintain administrative control has to change.”
We have witnessed other types of technology cause big shifts in finance. For example, the credit card emerged in the 1950s, while PayPal was founded in 1998, and was very novel then. And since Satoshi Nakamoto started the blockchain revolution in 2008, around 55 out of the 100 biggest banks in the world use blockchain to some extent.
Sawyer also believes the language used around digital assets will change, because “Regulation and broad adoption will change the way the media and public perceive and talk about digital assets.” He suggests that although the ‘pop culture’ language of the crypto market, e.g. HODL, FUD etc, will stay, there will be a fusion of the languages of crypto and institutional finance that will make “a broader cohort of blockchain investors feel comfortable within the space.”
Furthermore, the industry must stop focusing on one particular use case for the technology, i.e. Bitcoin, and start talking more about money, investments, financial management and smart payments in relation to blockchain and crypto. We already know that customers are increasingly drawn to assets that have utility and can solve complex problems, not just those offering a payments platform (Bitcoin again!).
As a more sophisticated and broader audience understand the diverse applications of blockchain technology, this will instil greater confidence in it across industries, and lead to “the adoption of blockchain technology to unravel issues that no one ever dreamed could be addressed with blockchain.”