Friday, September 21, 2018
While Ethereum has lost 85 percent of its value in 2018, McLoed believes it will rebound by the end of the year and eventually outpace rival Bitcoin. "I think we can expect Bitcoin to lose 50 per cent of its cryptocurrency market share to Ethereum, its nearest rival, within five years," he stated. "Ethereum is already light years ahead of Bitcoin in everything but price – and this gap will become increasingly apparent as more and more investors jump into crypto."
"Using [Ethereum's] cutting-edge technology, the art world can eradicate one of its biggest and most expensive problems – forgery – and can protect artists, galleries, and private owners and collectors," added Stephen Howes, co-owner of Thomas Crown Art.
Payments analysts see ramifications for blockchain technology beyond payment transactions. In a June 22, 2018, blog post titled "Top 5 most compelling uses for blockchain technology," Bitcoin analyst Emily Su cited supply chain management, digital identity, smart electrical grid technology and healthcare as sectors that rely on trusted intermediaries to "record, validate and reconcile transactions without really adding any value to the original transaction." Conversely, blockchains use distributed ledgers and advanced cryptography to facilitate secure, transparent transactions among mutually untrusting users without using intermediaries, she noted.
McLoed pointed out that Ethereum is more highly developed than Bitcoin from both a technology and use case perspective. Its ability to authenticate products and solve provenance issues makes it invaluable to art dealers, who can log onto the Ethereum blockchain and create "smART" contracts, he said.
"Ethereum offers more uses and solutions than Bitcoin, and it's backed with superior blockchain technology," McLoed stated. "This is why we use Ethereum's blockchain in our art business. It has allowed us to create a system to use artworks as a literal store of value; it becomes a cryptocurrency wallet."
Eric Brown, CEO at Aliant Payment Systems Inc., said price volatility has been a major barrier to entry to cryptocurrency usage in the merchant acquiring community. As an early investor, Brown noticed cryptocurrencies were not geared to payments. Together with software engineers and a domestic bank, Brown created a mobile friendly cryptocurrency payment solution. The key was providing merchants with guaranteed payments, fast deposits and competitive rates, while liquidating funds into U.S. dollars within a small window to mitigate price volatility, he said.
"Merchants can accept cryptocurrencies and cash out in U.S. dollars," Brown said. "There are no chargebacks or no exchange fees with cryptocurrencies and transactions from Eastern Europe and Eastern Florida are just as fast and the cost of the transaction is no different."
A self-described true believer in blockchain technology, Brown said currency is just one component of how the technology will change human interaction on a grand scale. "The cryptocurrency train has already left the station," he said. "In a few more years, it will surpass payment rails and your crypto wallet will be in your phone."
That would likely be contingent upon resolution of extreme volatility issues, which would allow a critical mass of consumers and merchants to feel comfortable using cryptocurrencies.
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