By Iqbal V. Gandham, UK managing director for multi-asset trading platform eToro
As the Internet marks its 50th birthday it’s sobering to look back at some of the naysayers that forecast its failure. Robert Metcalfe, co-founder of 3Com and co-inventor of Ethernet, for example, who wrote in 1995: “I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse.”
Similarly, Clifford Stoll, astronomer and manager of the computers at the Lawrence Berkley National Laboratory in California, wrote in Newsweek in 1995: “Do our computer pundits lack all common sense? The truth is no online database will replace your daily newspaper, no CD-ROM can take the place of a competent teacher and no computer network will change the way government works.”
You would have thought the prophets of doom who espouse similar views about blockchain and cryptoassets would have learnt a bit of humility by now, or at least some patience. I believe the potential for both those technologies is bigger than the Internet, but, just like the Internet in its early days, most people don’t appreciate how transformative it could be because there are use cases that haven’t even been dreamed of yet.
In its simplest form, Bitcoin – the original cryptocurrency – under-pinned by blockchain technology, allows the secure transfer of value from one party to another, without having to go through a bank. And remember, the first Bitcoin transaction was made in the weeks after the collapse of Lehman Brothers at the height of the 2008 financial crisis, so trust in the banks was at an all-time low.
Blockchain already sits at the heart of huge developments in financial innovation and will eventually change the way we think about finance, from the tokenisation of assets through to bringing payment platforms to millions of unbanked people across the developing world.
We’ve weathered a few storms and the sector isn’t perfect yet, but then neither is the Internet half a century on. What we must learn from the challenges the Internet has faced is that good governance is crucial, even at this early stage. To give users confidence and ease the concerns of the authorities, regulation is the obvious next step for the sector.
If we get that right, 50 years will be a drop in the ocean for the future of cryptoassets and blockchain.
Happy Birthday, Internet