Blockchain in 2017: is Optimism Sustainable?
Linas Beliūnas
Reinventing Finance 1% at a Time ?? | Scaling Digital Asset Infrastructure ?? | The only newsletter you need for Finance & Tech at ??linas.substack.com?? | Financial Technology | FinTech | Artificial Intelligence | AI
2016
2016 was a good year for blockchain. It was the year when many bank and other financial institutions executives understood both the threat and the underlying potential of the blockchain. At first skeptical, now many of them are investigating how this technology can and will transform their companies and industries in which they are operating.
2016 was the year when many bank and other financial institutions executives understood both the treat and the underlying potential of the blockchain.
They key driving force behind interest in blockchain is its potential in improving efficiency and reducing risk. Hence, it is not surprising that 2016 was a major year for investment in this new technology, with $387 million being poured into blockchain startups.
$387 million was poured into blockchain startups in 2016.
Bitcoin, the most popular and best-known cryptocurrency, experienced a good year too. Its price rose steadily and with lower volatility than had been experienced in the past, also, it gained wider acceptance and legitimacy as a means of payment.
2017
Looking at 2017, we can definitely state that the new ecosystem still lacks clear frameworks and well-defined processes. In order to gain the momentum and realize its potential, everything has to be as precise and flawless as possible. Also, it is very important how governments and each of us will act, because we can mess it all up – either in terms of rational standards, or regarding proper research.
- Nevertheless, this year central banks should start testing digital fiat currency, and it should work, leading to broader adoption.
- Large commercial banks should start employing blockchain technology as well. No major shift will take place, but step-by-step adoption will definitely be present.
- Major companies in other industries will start developing a blockchain strategy.
- Demand for Bitcoin as a currency will continue to grow in 2017. The key demanders will be from China and India due to capital controls and panic for cash. To add, rising dollar will also cause some in emerging markets to seek alternatives to fiat currencies as debt denominated in dollars becomes more expensive to service.
- Bitcoin should continue to be dominant digital currency amid many alternatives.
----------------------------
Related: