12 Years On From The Bitcoin Whitepaper, We Continue To Face New Challenges

12 Years On From The Bitcoin Whitepaper, We Continue To Face New Challenges
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Tomorrow marks 12 years since the release of the Bitcoin whitepaper. Created in response to the perils of the 2008 global recession, 12 years on, the world now finds itself in the second deep economic downturn since the turn of the millenia.

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Below, five leaders from the blockchain and cryptocurrency industry look back at the last 12 years. How has bitcoin shaped the new innovations we see in the blockchain industry today? As the world continues to battle the pandemic recession, what kind of effect might this have on Bitcoin, and how might the Bitcoin philosophy help us overcome some of the greatest challenges of the day?

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Eran Haggiag, Co-founder and Executive Chairman of Clear, the developer of blockchain-based settlement and clearing networks, said, 

“12 years on, Bitcoin and its underlying technology, blockchain, has proven it has the potential to change the way we do business forever. Blockchain is starting to revolutionize the way in which enterprises carry out business across a myriad of industries — from telecoms to pharma and healthcare to insurance —  by increasing the speed of transactions via instant settlements, as well as greater transparency, trust, and traceability between enterprise partners.

As bitcoin is proving itself as a very successful "digital gold" application of blockchain technology, I think we will see blockchain technology bringing immense benefits to enterprises creating the next generation of fintech infrastructure for the coming decades.”

Ali Mizani Oskui, Founder and Chief Investment Officer at FiCAS AG, the swiss-based asset management firm behind the world’s first cryptocurrency actively managed ETP said,

“The Covid-19 pandemic has had a massive effect on economies around the world, requiring fiscal and monetary stimulus of a kind not seen before, that will inevitably  increase inflation rates in most corners of the world. These inflationary and macroeconomic pressures will position Bitcoin as a new asset that acts as a recognised store of value against inflation.  This is already evident by the clear trend among companies and institutions who are allocating a noticeable amount of their reserves into digital assets , most notably Bitcoin.  Keeping these trends in mind, and with more economic uncertainty arising from the pandemic, it is very feasible that Bitcoin will approach $20k by the end of the year.

Great market adoption, a bigger influx of investors and favourable market fundamentals, will send Bitcoin’s market cap towards $USD 1 trillion over the medium term. Bitcoin’s growing market cap means volatility will reduce and as a result , we will see the recognition of Bitcoin as a legitimate asset class among retail and institutional investors.

One of the great benefits of Bitcoin is its ability to open borders and connect  users with new possibilities through a frictionless means of payments and a universally diversified population derived from productivity and innovation. This will ultimately be the catalyst for wider market adoption.”

Chyna Qu, Co-Founder and COO of DeFiner, the decentralized financial network for digital loans, savings, and payments, said

“What is needed is an electronic payment system based on cryptographic proof instead of trust…” -Satoshi Nakamoto

Twelve years ago, Satoshi published these words in the Bitcoin whitepaper.  

That year, 2008, happened to be the most economically-uneasy year in more than a generation. Now in 2020, we face a fresh economic crisis spurred on by the COVID-19 shutdowns. The market crash, the need to print masses of inflationary money for multiple bailouts each dwarfing the 2008 efforts, and then the difficulty the U.S. government has had in distributing these funds to citizens—all this reinforces the truth behind Satoshi’s quote and the place for Bitcoin and cryptocurrency in the world. 

Naturally, we now ask what the future will hold for Bitcoin. By 2032, blockchain and cryptocurrency will have become as ubiquitous as smartphones are today. All major companies will have adopted blockchain tech in probably several areas of their operations—inventory, accounting, billing, and payroll. Meanwhile, individuals’ lives will have been enhanced by their own direct benefits of blockchain—more ways to earn, easier access to capital. This will be pronounced in the developing world, where earning and capital—not to mention banking—have long been steep impediments.

Bitcoin’s genius is in overcoming these impediments—an ironic blend of removing the middlemen (removing trust altogether) so we can all be more connected and prosperous.”   

Nick Cote, Senior Analyst at Hxro Labs, the gamified crypto trading platform:

“The pandemic caught many governments and institutions off guard, and their knee-jerk reaction to fix things was a massive stimulus program and subsequent inflation of the money supply to historic levels. Actions have consequences. While some of those consequences may take years to materialize, the pandemic has both catalysed the growth of digital payments, and the mainstream adoption of Bitcoin as a digital store of value, or even as a practical hedge against inflation. This rapid shift to digital currencies positions Bitcoin and central bank digital currencies (CBDCs) at the forefront of the digital revolution. With the accelerated institutionalization of this asset class, it’s probable that Bitcoin, along with other major cryptocurrencies, will continue on their upward trajectory as other fiat currencies continue to inflate.

We expect Bitcoin to continue gaining traction within institutional circles, and for Bitcoin to appear on the balance sheets of many more public and private entities. As a result, the price of Bitcoin will continue to appreciate.

Without Bitcoin, there would be no altcoins, which have been one of the major drivers of innovation in the entire space. This is reflected by the decrease in Bitcoin’s proportion of the total market capitalization in the crypto space. Bitcoin has led to the decentralization of money, and the majority of financial services, such as borrowing and lending, which make up the cornerstone of most economies. It has underpinned the next generation of currencies, while showing that central banks are not necessarily needed as administrators or gatekeepers.” 

Zahreddine Touag, Co-founder of the Paris Blockchain Week Summit and Woorton said, 

“The current pandemic crisis is marked by non-conventional monetary policies resulting in massive injections of new liquidity by central banks to support the economy. We believe Bitcoin is a good hedge against the future negative effects of these types of macroeconomic policies and we are therefore bullish on the asset.

In the short term, we think Bitcoin will be democratized due to the entrance in the market of centralized actors aiming to provide cryptocurrencies, digital corporate currencies or digital central bank currencies to their clients or citizens. The centralization aspect of such actors could artificially re-create the type of issues Bitcoin was designed to solve such as censorship, trust in intermediaries and control. Therefore we see on the long term a wave of emancipation from such actors to reappropriate the original philosophy of Bitcoin accompanied by a higher usage in daily transactions thanks to the first democratization.

The standout moment in the last 12 years was in our opinion the 2017 Bitcoin bashing when large institutions like JP Morgan or politicians suffering a trust crisis were virulent about Bitcoin. Today the same companies and countries have plans to work in a way or another with Bitcoin and created or are creating innovative regulatory frameworks.

Bitcoin showed the world that software can be open source, censorship resistant, decentralized, permissionless and borderless. It has attracted many talented developers and entrepreneurs who found those aspects appealing or revolutionary. This worldwide community then with the impulsion of Bitcoin innovated in a lot of different aspects including scalability, privacy, governance or financial inclusion. The philosophy of Bitcoin remained present as well in the decentralisation of crypto exchanges or lending platforms as we have seen recently with the DeFi craze.”

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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