Yes, you read that right. Despite popular belief after the Bitcoin bubble burst, Cryptocurrency is not dead. Around this time last year, cryptocurrency in general, and Bitcoin in particular, were experiencing exponential expansion.
This significant and expedited growth opened the door for over 4000 altcoins (alternative variants of Bitcoin, or other cryptocurrencies) to take center stage and compete for a share in the market. Fast forward a few months and we find that Bitcoin has lost most of its value.
The rise in unpopularity can be attributed to several factors, particularly the recent hacks which exposed a number of shortcomings in the security of cryptocurrency. This started with Mt. Gox, the world’s largest Bitcoin exchange, declaring bankruptcy and stating it had lost nearly $473 million of their customers’ Bitcoin due to theft. Following this, Tether was hacked and lost $31 Million in USDT from their primary wallet. In May 2018, Bitcoin Gold and two other cryptocurrencies were hit by a successful 51% hashing attack in which they lost nearly $18 million. A month later, Korean exchange Coinrail was hacked, losing nearly $37 million and causing a $42 Billion cryptocurrency market selloff.
Clearly, cryptocurrency is fraught with challenges, especially loss, theft and fraud at the helm. Legality is another obstacle that hinders the growth of the industry, especially as the unregulated global economy continues to expand. The use of cryptocurrency in controversial settings such as the darknet and online black markets is a recipe for disaster. The combination of all of the above factors, coupled with uncertainties pertaining to the volatility of its value, places cryptocurrency in an unfortunate position.
However, it is not all bad news, as big banks and tech industry leaders have continued to invest in cryptocurrencies. Rumour has it that Facebook is building a cryptocurrency designed to make it easier to transfer money via WhatsApp. Additionally, the Bank of Thailand announced in August 2018 plans to create its own cryptocurrency, the Central Bank Digital Currency (CBDC).
Furthermore, Blockchain technology, which powers cryptocurrencies, is becoming more prevalent than ever as novel and innovative ways to implement it continue to surface. For instance, IBM partnered with ASCAP and PRS for Music to adopt blockchain technology in music distribution. Additionally, Walmart and IBM are running a trial to use a blockchain-backed system for supply chain monitoring whereby all nodes of the blockchain are administered by Walmart and are located on the IBM cloud. Additionally, IBM and start-up Hu-manity.co launched a blockchain-based app that lets patients sell anonymised data to pharmaceutical companies.
Read more on the same subject: