According to a new article trillions of dollars are waiting to move into the blockchain space. The real question would be could any blockchain handle such an influx of capital at this time? In my humble opinion, none of the blockchains are currently secure and this includes Bitcoin. I see problems with pure proof of work which I'll highlight below.
The problems with proof of work (Bitcoin)
The main problem with Bitcoin style proof of work is that it centralizes power into the miners. In essence Bitcoin may be described as a constitutional monarchy where the protocol itself is like a constitution and the mining monopolist (Monarch Mining Inc) can be viewed as a monarchy. The problem with this form of governance is that it is very fragile and the reason it is fragile is because the interests of the miners don't align with the interests of the users. In my humble opinion, a truly secure blockchain must always put the interests of the users first and to do that requires a feedback loop between the stakeholders who have something to lose and the developers.
In pure proof of work the developers and users have no say yet also have the most interest. Miners can over time gain control of the coin and if a mining cartel or cabal or Monarch Mining Inc were to take over then this clandestine mining organization would be able to choose the winning forks or simply strategically fork in such a way as to take control and keep control over the evolution of the coin. Under this set up there is nothing to guarantee that the coin over the long term will respect the rights of individualusers or adhere to the specification.
Hybrid Proof of Work + Proof of Stake
My preference from a governance and security perspective is either pure Proof of Stake or hybrid Proof of Work + Proof of Stake. In the case of currency application then the hybrid model can make plenty of sense because you can have something like Bitcoin which also must respect the rights of stakeholders. The stakeholders in essence would be the guardians (think Plato's guardians) who keep mining honest. DIshonest miners can simply be removed from their positions which is something that isn't even possible under pure Proof of Work. Under pure Proof of Work like with Bitcoin it is not possible to remove the miners and even when you fork the miners remain the monarch who can choose which fork will win. Under a hybrid model if miners promote a direction against the interests of stakeholders then the stakeholders have veto power over all authority in the network. Authority is a privilege under proof of stake which is given and can be taken away which in my opinion is critical to a network being resilient and having an ability to recover from a successful attack.
In general the security is about the incentives and in pure Proof of Work the incentives are not well aligned. In addition, if miners are corrupt they don't have anything to lose because their mining equipment doesn't go up in smoke if they collude to gain control of the network. Under Proof of Stake they mine with their $ which is captured in the tokens used as collateral and their collateral can go up in smoke. This allows the network to trust them because they actually have something to lose when they mine with the network token as stakers (they can lose because token price collapses or if they violate the rules).
Conclusion
Is the blockchain space really ready for trillions of dollars as early as 2018? While it sounds nice because Steem would benefit I would say at this point in time the security of most protocols cannot yet handle the sort of growth in price. If these trillions are spread out between many protocols then I think perhaps the entire space could handle 1 trillion in 2018. That is to say all of coinmarketcap as a whole worth 1 trillion and that would have to be spread out a lot more than it is now where it is very concentrated on a few coins at the top. This is because currently the governance capabilities and scaling capacity of even the top blockchain projects are very limited and these limitations will become very apparent as more money (and greed) flow in.
I make a prediction:
I expect Bitcoin to collapse over time as users discover they have no ability to influence the evolution of the protocol which favors miners almost exclusively. I expect over time users to flow where they have the most control of the protocol.
Proof of Stake and hybrid Proof of Work + Proof of Stake protocols will in my opinion capture mainstream users. Proof of Work coins will in my opinion continue to be traded and the price may continue to rise because on some level miners are running what resembles a casino. At the same time miners have no reason to care about the rights of users and so the casino doesn't have to produce anything of utility over time or aim for mainstream adoption.
Finally, none of of my posts are investment advice. Feel free to comment and tell me how I'm wrong if you think I'm wrong in my prediction.