Lesson 3: The Future of Digital Currencies Upon the surge in interest in Bitcoin and blockchain since 2009, a number of other cryptocurrencies (or tokens) have come into existence. There are over 850 cryptocurrencies currently being traded across the globe. Litecoin, Dash, Ripple, Stratis, ZCash, and Monero are some examples of the popular coins. The total market capitalization of all cryptocurrencies combined crossed $100 billion in June 2017, a remarkable milestone in the cryptocurrency journey. As an obvious outcome of this, a completely new industry of cryptocurrency trading has emerged globally. Blockchain-based apps will intrinsically make use of a cryptocurrency. To that extent, an exchange plays the role of a provider of access to cryptocurrencies, which the common people will utilize to use such blockchain based apps. A relatively new cryptocurrency called Ethereum (ETH) is competing in a race with Bitcoin for world dominance and popularity. Proposed in late 2013 by Vitalik Buterin, the Ethereum Project went live in July 2015. Ethereum is basically an open source, blockchain-based distributed computing platform, whose major highlights include smart contracts, the Ethereum Virtual Machine, and a set of programming languages to build blockchain apps. In a short time of existence, Ethereum has shown tremendous promise and received unparalleled support from developers, users and businesses. The total market capitalization of the currency is already around $30 billion. Being an open source blockchain project has enabled tons of startups to develop their own cryptocurrencies built on the Ethereum platform. The ease of development, the size of the developers community, the technological edge over other blockchain platforms, and its signature Enterprise Ethereum Alliance (a consortium of world’s leading businesses which employ and help the Ethereum platform) are some of the main reasons why it is getting so popular. The philosophy of cryptocurrencies is to break all borders and barriers, at least in the context of finance and trade. Cryptocurrencies and blockchain technologies, like Bitcoin, are revolutionizing the way people think about government currency monopolies, transferring money across the globe, maintaining financial privacy and security, and verifying ownership of money or potentially everything. Their place in society and the financial system is rapidly expanding. This is one of the reasons that the concept attracts criticism from bankers and politicians. They currently are playing the reactionary role in the face of a decentralization revolution. Nearly a thousand coins are competing with each other in these early stages of blockchain development. The future may see a single leader while others are rendered obsolete, or the future may see 3–4 leading coins which define the entire payments, lending, trading and banking infrastructures globally.
Within the next few years, cryptocurrencies may become popular enough for mainstream adoption of blockchain-based apps.