The idea that blockchain can be transformative and simultaneously crumble the financial infrastructure is unrealistic

Cryptocurrency has gone mainstream and to think that blockchain technology will become a full-blown anti-government alternative to fiat currency — rather than eventually being integrated into the financial system — is wrong.

Furthermore, those espousing the ideal that one day Bitcoin will shake the foundations of the US Dollar are actively harming the cryptocurrency community.

This was the sentiment expressed at the MAS Fintech Festival — granted, an extremely pro-government event by nature — but one that seems to be correct given the hype surrounding the industry.

“Fiat currency is not going away soon, so those in Bitcoin that espouse anti government, anti-bank, anti-fiat attitudes, it does a disservice,” said Brad Garlinghouse, the CEO of Ripple, during a panel discussion.

For context, Ripple is built on the blockchain and has a protocol to facilitate international money transactions. It also has a crypto-coin that sells for US$0.20 as of publishing.

The cryto-world needs to leverage the current hype-cycle, but the best strategy for this is to temper expectations.

“I think there is a ton of hype in the blockchain space but it doesn’t mean blockchain isn’t real or transformative. We as an industry have an obligation to educate Central Banks. I think what hurts us is if we think fiat currency is the competition, we do a disservice to what we are trying to do,” he said.

As explained by Joseph Lubin, one of the Co-founders of Ethereum, we are entering an internet era whereby we can moving fundamental aspects of society to the digital realm.

“Instead of building siloed ecosystems based on legacy database systems, you can build shared non-redundant infrastructure…we’re embarking on an era where we can move the foundational elements of society,” he said.

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If blockchain becomes as transformative as many hope it can be, it has the same potential as the internet did in the late-1980s. The technology itself is strong, and definitely a legitimate thing; but it has yet to provide value to the average consumer.

To demonstrate, Tim Grant, the Founder and CEO of DrumG, a distributed ledger company for financial institutions, asked the audience how many people owned crypto currency. About 25 per cent of the audience raised their hands. He then asked, “How many of you have bought something with the coin?”. One, maybe two, people kept their hands raised.

Plus, it should be remembered that the audience at Fintech Festival is significantly more educated about cryptocurrency than the general public. Even for the oldest of old-school financial service professionals, the blockchain has penetrated enough of the industry to demand at least a basic understanding of the concept.

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The point of he was making is, the blockchain is real, but the next step is to provide true value. The community needs to discover a path by which people use the technology without necessarily giving it a second thought. So far, Grant said, nobody has successfully done this.

Taavet Hinrikus, the Co-founder and CEO of Transferwise, a non-blockchain exchange company, said,

“Look at what is happening in China. How people are using WeChat for payments. It is a form of digital currency. It’s not using blockchain, but who cares? It works.”

WeChat provides value, and the success or failure of the company has nothing to do with if it is built on the blockchain.

Which comes back full-circle. Creating this value does not require crumbling the infrastructure and starting from scratch, it means working with banks, regulators and governments to squeeze-out inefficiencies while ensuring regular folk don’t find themselves on the short-end of a Wild West financial product.

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