As part of the author's column, Alexei Voronin, the founder of the decentralized SmartValley scoring platform shared his opinion with the readers of DeCenter on the potential of the first cryptocurrency.
In those distant days, when the first veteran geeks were just beginning to be interested in cryptos, the dream of Bitcoin was for it to become "digital gold," which seemed obvious since it was the only one in demand. In the distant past, Bitcoin seemed an alternative medium of exchange like gold, but created especially for the coming digital age, and also reliably protected by cryptography.
Undoubtedly, it has its own unique features that make it the best in frontal comparison with gold. It has a limited number of coins, a decentralized blockchain, transparency of all transactions and emissions, adaptation to the network environment of the future, full independence from censorship in its work, cross-border payment functions, and, finally, the novelty factor and boldness of the solution. It was so, albeit by a stretch.
Now, however, after years of rapid development, cryptocurrencies have imperceptibly degenerated into a speculative, high-volatility asset class, and BTC is no exception. The extremely low implementation qualities and practical application of cryptocurrencies in the real financial sector of the economy have already become popular topics of criticism. Bitcoin never became what it had to become according to its white paper, but rather acquired functions of what it was not originally intended to be. Today, cryptocurrencies have deteriorated into endless pump and dump schemes and fashionable hype about overnight riches—a total divergence from their original purpose of forming revolutionary technology for the world of finance. The emergence of non-deliverable futures further exposed the essence of the ongoing "derivatization" of this process.
Gradually, a potential bubble appeared in the process of this race. As a result, these two antagonizing roles (revolutionary technology and just another derivative) have been so strongly interwoven in the minds of their followers that it prevents us from clearly and unambiguously diagnosing the problem as in the era of post-truth, each party sees only its own subjective value and purpose in blockchain.
If one starts from point zero, where Bitcoin was destined to really become "digital gold" (or a revolutionary financial technology), its acceptance is necessary by a significant part of society. And here we reach the Metcalf law as a criterion. Let us reiterate, however, that now we are balancing at the point of uncertainty, as the audience and its expectations are highly fragmented. There is a certain percentage of "true believers" of hodlers, there is a decent share of speculators, there are people who gratuitously improve and propagate this technology, and a huge sea of people who have never used Bitcoin in general.
The bad news is that now we are stuck in the speculative aspect of Bitcoin, which, frankly speaking, kills it as a technology. Essential deflation of the BTC bubble (and the inevitable deflation of all other altcoins along the chain) will substantially improve the situation, leaving only pragmatists and techies "doing business" in the game, no matter how painful it may sound for the speculating part of the population. The expensive and growing Bitcoin has attracted a huge number of hopefuls who saw in it a means to quickly enrich themselves.
The good news is that the prerequisites for a reversal towards the healthy positioning of Bitcoin in the future are likely to persist. For example, the already significant drop in the price of the asset (currently about 60% of the historical peak of its price) has significantly deteriorated the false euphoria of "easy money" created around it, while moderate regulation made it legal. The gradual deployment and rapid growth of nodes in the Lightning Network will finally decide the problems with scaling Bitcoin.
Yes, no one will want to use the "old" Bitcoin today, as it was technically implemented 5 years ago, just as no one would use the first versions of iPhone today. Modern Bitcoin is included in the top 5 most actively developed projects (according to statistics of Github). Over the years, taking into account all its superstructures and related projects, such as rootstock, atomic swaps, LN, and so on, it has already turned into a locomotive for the development of the crypto industry (at least, judging by its record price and the dominant influence on the market). All this together gives us hope for a bright future for BTC.
As a key conclusion to allow McAfee’s scenario about the million-dollar Bitcoin to become a reality, it is necessary to qualitatively and massively rethink Bitcoin in the role of a "cornerstone technology" in the field of FinTech, and not just as a speculative asset, as it has already become in the perception of many, including my compatriots. As it is introduced and its popularity increases, the price will rise again, but it will be a different, qualitative growth supported by the real demand of the economy and the growth in the number of transactions implemented. In conclusion, I will reiterate that the final battle for the triumph of cryptos is yet to come, and it will likely happen in the next few years.