Bockchain is one of the world’s top technology trends in 2020.Here is some important Blockchain Q&A.
In your opinion what do you think is responsible for Bitcoin’s dominance?
The network effects i.e., the number of people globally using bitcoin, the number of exchanges accepting bitcoin, the ease of use, the stability of traffic, the stability of the network, the number of nodes supporting bitcoin, and the predictability of supply, the predictability of demand and standardized mining support
Effect of COVID on cryptocurrency
If at all covid19 has bought about 1 understanding – it is that bitcoin is a store of value. If you observe the stock market before and after the March 2019 crash – BTC’s value has recovered most of its value. The price of Bitcoin over the past 1 year – has relatively been stable – despite the market crash. Compare this with the NASDAQ, DJI, and S&P500 i.e., refer the 1 year horizon plot from Yahoo! Finance, and you can see the difference. Bitcoin has – over the last 1 year remained mostly at the same price. In fact – during the crash Bitcoin price crashed as well, but has increased significantly more.
what is better? Proof of Work Vs. Proof of Stake
Proof of stake is ASIC resistant, and ensures more or less equitable participation by users. There are many variants of proof of stake such as Distributed proof of stake, Delegated Proof of Stake, True proof of stake, etc. Each of these have their own advantages and disadvantages compared to Proof of work. However, on the overall the True Proof of Stake algorithm that is being added to Ethereum as well already live on production in the Algorand cryptocurrency provides an equitable, decentralized mechanism to prove consensus.
In what ways do you think the crypto space will evolve this year?
We will see a huge increase in applications in decentralized finance. The innovations in decentralized finance using smart contracts are proceeding at a tremendous pace. Already, we see that firms such Celsius.network , compound finance, DAI and Maker protocols are creating such a financial environment where they are able to unlock a lot of value using cryptocurrencies. This year will be the year of decentralized finance, in my opinion wherein newer modes of creating borrowing and lending at a much more equitable position is going to be possible.
What’s your take on Central Bank Digital Currencies?
Central bank digital currencies will possibly make the mint irrelevant in the future. It is also possible for governments to track currency flows ,usage and such much more easily with central bank digital currencies. However, these digital currencies are going to take time for the society to adopt. They obviously are much more secure than regular currencies. It can eliminate a lot of black money hoarded in currency notes
In your opinion will other decentralized ledger technologies (DLT) replace blockchain technology?
DLT and blockchain are synonymous in many – ways. However, you can have DLT without consensus or without byzantine fault tolerance. For example, distributed cloud based noSQL databases could be considered as DLT. However, blockchains are specific more technically adept form of DLT and have their own uses.
Do you think governments all over the world are going to accept cryptocurrencies? If so why? if not why not?
At the current moment, many governments are worried about capital flow. I have written extensively about this on my blog. Here:
As a result many governments heavily regulate this asset.
what is the single factor that is preventing the adoption of cryptocurrencies?
There is are many factors e.g., usability of the system, trust in the system, etc…. we have found about 21 different factors that affect adoption and have documented these in our paper. https://aisel.aisnet.org/cais/vol45/iss1/27/
Refer to table 3
If you had three wishes for the crypto space and a Genie who could make them come true, what would the wishes be?
1. Mass adoption 2. Legalization of ETFs and 3. High transaction speeds.