Cryptocurrencies like Bitcoin offer a viable alternative to money and could become mainstream within the next decade, according to recent Imperial College and eToro reports.
The new academic research entitled ‘Cryptocurrencies: Overcoming Barriers to Trust and Adoption’ by Professor William Knottenbelt from Imperial College London and Dr Zeynep Gurguc from Imperial College Business School has made a case for mainstream adoption of cryptocurrencies over the next ten years.
The research argues that, due to the evolution of money over time, through shells being replaced by promissory notes, then coins and paper money, the rise of digital money is simply a natural step.
This view is by no means revolutionary. As Bitcoin News reported recently, Shanna McEachern, writing in the Global Banking and Finance Review, made a similar analogy using Darwinism to explain the arrival of cryptocurrency.
As McEachern pointed out, evolution occurs through the survival of small, inheritable mutations that render a species better able to survive and flourish through slow change and impact of initial change makers. There is no “eureka” moment, she claims. This is true as, over time, careful research ideas are developed, considered, tested and finally released into the public domain. Such was the case with Newton, only releasing his theories on gravity 20 years after he commenced his research.
The new research offers by Professor William Knottenbelt offers three constant features which define the term “money” factors which are all shared by Bitcoin, in that money has a store of value, it is a medium of exchange and it is a measure of value in the economic system.
Of this evolution, Professor Knottenbelt from Imperial said:
“The world of cryptocurrency is evolving as rapidly as the considerable collection of confusing terminology that accompanies it. These decentralized technologies have the potential to upend everything we thought we knew about the nature of financial systems and financial assets.”
Six factors need to be addressed in order for a mainstream scenario to exist for digital money, according to the research: scalability, usability, regulation, volatility, incentives and privacy.
Professor Knottenbelt argues everything is in place for cryptocurrency’s next major step, saying:
“There’s a lot of skepticism over cryptocurrencies and how they could ever become a day-to-day payment system used by the man on the street. In this research, we show that cryptocurrencies have already made significant headway towards fulfilling the criteria for becoming a widely accepted method of payment.”
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