With new advances in blockchain technology seemingly appearing on a daily basis, particularly in the area of smart contracts, the digital currency industry is evolving at a rapid pace. With every new development being proclaimed as ‘the new Bitcoin’, what does it really mean for the digital currency industry and especially the end users who are moving to cryptocurrency in ever greater numbers?
Does a smart contract based solution instantly become superior to existing digital currency options, and will we see a decline in users for Bitcoin and other cryptocurrencies any time soon as a result?
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The digital currency environment has seen many different currencies rise, and even fall, during its relatively short lifespan. Bitcoin remains unchallenged in terms of popularity, value and use while others operate on similar principals at lower levels, but as the technology matures, new ideas are appearing all the time. The notion of smart contracts being tied to blockchain technology is relatively new, with Ethereum being the first implementation to be fully launched, but while like many innovations, it is being touted as ‘Bitcoin 2.0’, other similar smart contract enabled solutions are also appearing now. Do these new ideas really signal the way forward though, and what are the benefits?
Smart contracts are a set of protocols that facilitate the automatic performance of a contract, and add a layer of transparency to any contract that the more traditional blockchain cannot have. Additionally, smart contracts can be implemented in a much wider field of use than just digital currencies, everything from replacing house keys as a means of entering your property to the complexities of financial contracts themselves. The possibilities that come with the concept are why it has been able to raise so much investment money, but does this really make the smart concept enabled blockchain a likely Bitcoin challenger?
The technology is obviously promising and has potential in many areas of life well beyond the cryptocurrency itself, but to assess where digital currencies based around the idea of smart contracts stand for the foreseeable future, it is perhaps important to look at how digital currency is used, and by whom. Bitcoin has grown in use as it became easier to buy, easier to sell, and easier to make purchases with. This suggests that the wider audience is using it primarily as a currency, and as it has become more viable as a currency, more people use it.
For all the advantages and wonderful additional possibilities that smart contract enabled solutions have to offer, are they better placed to be used as currency? For now, Bitcoin has the infrastructure, visibility and public awareness that simply make it the most viable choice to use as a currency. But who knows what the future holds.
For those of us interested in the technology itself and its impact in other aspects of life, these smart contract solutions are incredibly exciting, but it is important to remember that the wider audience is seeking a form of digital currency, rather than the technology that enables it, and this is why right now Bitcoin is the industry leader.