The Similarities Between Cryptocurrency and Social Media, and How Blockchain Will Survive

by Andrew McGuinness     Jul 16, 2019

Many experienced investors, analysts and experts agree – bitcoin is a fad that will die out sooner rather than later. The business model of bitcoin is based on being a fiat currency and will only last as long as there is attention paid to it by the media. As soon as the hype dies, so will bitcoin. If you’ve done some research on crypto and blockchain Trading 101 you’ll notice quickly that while bitcoin might be a fad, the blockchain technology that made it possible in the first place is definitely here to stay and shape a lot of industries along the way.

Blockchain is one of the most innovative inventions of our generation and will give birth to a new breed of entrepreneurs. In many ways, you can compare bitcoin to MySpace or Friendster and blockchain as a whole to Facebook and Twitter. If it hadn’t been for the first one to get wildly popular for a short time and then die out, then its successors would not have gone on to become the successes they are today – the same is true for bitcoin and blockchain. Bitcoin is the MySpace of the world and blockchain will be its Facebook.

Using that analogy, we need to explore why blockchain will stick around for a lot longer than cryptocurrency – what characteristics make blockchain the Facebook equivalent?

1) Transparency

Full disclosure is one of the most essential parts of the technology. Thousands of blockchain users maintain the ledger which is a record of all transactions ever done since inception of a particular blockchain. It details every user’s transactions and is technically viewable by everyone that’s part of the blockchain.

This transparency has made the technology adaptable to many other industries. Every transactions can be monitored and nothing can be hidden, which establishes a level of authentic trust by its users and protects the blockchain from malicious hacking attempts too. It’s this transparency that’s also made ICOs so successful across the board as investors can see exactly what’s happening with a cryptocurrency unlike in many other markets where a lot more information is kept behind closed doors.

2) Financial control and independence

We are, as a society, for the lack of a better term, dependent on banks and financial institutions. No one can safely keep all their money at home. Banks can be a pain to deal with at the best of times, with their outdated policies and weak customer experiences, only existing because we don’t have other choices but to deal with them. Their control over our financial decisions is significant, dictating everything from foreign exchange rates to minimum account balances and transactions fees.

It’s happened before where the decisions made by banks lost their customers’ money – the great economic crash of the housing bubble bursting in 2008 being a great example thereof, with many experts predicting the same scenario happening when the student loan bubble explodes.

Banks have a large amount of data breaches every year with hackers getting the best of them. Blockchain gives you a more secure option of storing you money as a blockchain is virtually unhackable. You even have the option of keeping your cryptocurrency wallet offline, which will absolutely ensure safety from having your personal details stolen by a hacker.

3) Transactional fees

Transaction fees are one of the most profitable ways that banks and other financial institutions use to profit from the fact that we don’t have an option but to let them control our money. These transactions can seem small to the individual user, but for companies that are transacting in the millions, those fees can rack up quickly – and those fees could have been spent better on building the company. Blockchain can help here too by allowing for safe and easy transactions without the need for a bank.

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