Digital currencies have become one of the true Cinderella stories when considering its potential applications for enterprise, as well as a prospect for investment. And since the potential of the likes of Bitcoin first prospected, it's enjoyed a fair share of ups, and some otherwise catastrophic downs.
For people like Tim Draper, its potential has, if anything, been understated over the years, enough for him to dedicate a great deal of his time to figure out how digital wallets work, to the cryptocurrency, all the way to how the ecosystem functions.
One of the things that fascinated Draper was, what Satoshi Nakamoto went to lengths to incorporate, the scarcity; which would see its value rise as the number mined depreciated relative to the amount used.
While Draper himself, while being an early investor, had suffered a number of misfortunes, both with his mining venture, as well as with his experiences with Mt Gox. This has not blunted his optimism when considering Bitcoin's potential.
So What Sets Bitcoin Apart? Its Resilience
Mt. Gox's collapse hit a large number of investors, jolting the entirety of the Bitcoin market, sending its value down 20 percent as a result. But what makes it particularly fascinating to Draper, is the fact that it has proven durable, even in the wake of this downward jolt.
So what is it that makes it durable? It is fortunate enough to have a community of buyers that are feverishly lining up to buy bitcoin, even during some of its low price points. The financial crisis has only helped to encourage former users of banks and major financial institutions to look for alternative ways to pay and be paid digitally.
Banks have every reason to dread cryptocurrencies, for major banks to complete transactions for customers with a relatively small volume of capital, it actually costs them more in taking care of all the paperwork than the customer brings in. In addition to this, regulations that were set up to protect these individuals is actually preventing them from having a positive effect on the market.
The resilience that Bitcoin has demonstrated over the years is coupled with the increasing relevance of cryptocurrencies versus banks that continually fail small-scale customers.
Bitcoin's Potential And The Coming Tide Of Change
What Bitcoin has going for it is something that banks and financial institutions cannot represent – transparency and complete objectivity. This is a series of features that transcends cryptocurrency, with blockchain having the potential to take over for antiquated manned departments of businesses.
Smart contracts are a perfect example of this – with these proving capable of paying employees in a punctual manner, storing information for a wide range of things. These can also be used to validate products for their authenticity, validate transactions and confirm delivery and/or shipments.
The potential is there, but it's a matter of confidence from major companies, institutions, and corporations. Fundamental change and innovative minds are needed to test out the potential for, and leverage blockchain technology.