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Cryptocurrencies such as Bitcoin have the potential to revolutionize society in the same way the internet has, Rutger van Zuidam, CEO of DutchChain and organizer of the Dutch Blockchain Hackathon, told Radio Sputnik.
"Bitcoin is a public, open-source network that wants to establish collaboration in the form of transactions between people that don't know each other. So, in this case trust is generated by the blockchain of Bitcoin," van Zuidam explained.
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The price of Bitcoin peaked at $2,767 on Thursday, more than double its value at the beginning of this month. Amid volatile trading, the price had slipped 38 percent by Saturday, but rebounded to $2,257 on Sunday.
While Bitcoin remains the most valuable cryptocurrency, valued at $41 billion, another digital currency called Ripple has also boomed in recent months.
The Ripple XRP was valued at $0.32 on Friday, after it increased in value by 40 times since the start of the year; however, on Sunday it fell sharply to $0.22. With 100 billion Ripple XRP in circulation, the cryptocurrency has a total value of $22 billion. About 61 percent of the XRP cryptocurrency is owned by the Ripple company.
Ripple's popularity is down to the fact that it offers something fundamentally different to Bitcoin, van Zuidam told Radio Sputnik.
"Ripple is much more a fintech solution that works at really high speeds, between banks. It's about interchanging money between large financial institutions, most of the time of course heavily regulated, and they need high speed. They have already established a level of trust because they are financial institutions, so that's why they don't use bitcoin. Bitcoin, of course, is still in its early days and has a limited amount of transactions it can process per second."
Another cryptocurrency, Ethereum, is also growing fast.
"Ethereum is used by a lot of companies to generate different types of organizations and it is gaining a lot of traction from large enterprises, so there's this Ethereum alliance that is growing very rapidly and that's where we see the strongest growth at the moment."
Van Zuidam predicts that there will be more demand for cryptocurrencies which will stimulate further price increases.
"The true value of any cryptocurrency lies in its fundamental value in the real world. That's where we see it growing and I think more and more countries will start adopting these cryptocurrencies," van Zuidam said.
"Nothing is unimaginable here, there is a large demand for more liquidity in the real economy, so this is an interesting balance between the financial sector and using fiat money as well as digital money being out there, blockchain based."
In addition to cryptocurrencies, the blockchain technology that serves as a digital ledger to facilitate secure online transactions also has a variety of different applications.
"It can be used by healthcare applications and energy transitions, so the energy grid and the internet will be one. Blockchain is one of the key components in there because you have to be sure that the energy that comes out of your plug is green. That's what blockchain can deliver, the trust value layer on the internet."
"So I think this is where we are in 1992 with internet technology. We are still happy with every email we get, there's no browser yet, but the hype is already at 1998 or 1999. So, there might be a bubble that goes bust but then, we will immediately start improving."
"These are networks, they are eco-systems which are very strong and resilient, they change when the environment changes. So does the internet, and that's great for our future," van Zuidam concluded.
