The key to crypto success: Incentivization & Decentralization
At any given time there can be up to 500 active crypto's; and growing. They are competing largely for adoption of use, which has driven competition between beneficial attributes each crypto is offering. An example of an attribute is how a crypto handles changes to the digital ledger: a crypto may charge a network fee for use (burned), another method pays the ledger keeper for processing, and some have decided to charge nothing. Unfortunately the good natured free-use cryptos set precedents for problems. Cryptos need incentives to drive decentralization, which will make them useful in speed, predictability, and sustainability.
Currently decentralized cryptos are made up of a surprising amount of individuals. Right now most are miners - so long as they can keep up to date equipment. With some cryptos people run nodes for rewards. And there are also people that just want to try running a node. But will the future be made of entirely the general public running inefficient home computers that are turned into mini-processing plants for mining? Doubtful, for one it's an ecological disaster in the making no matter how much it makes absolute sense in terms of controlling inflation, giving incentives for keeping the ledger, or growing an electronics sub-market. Overall it would be against human nature to, in mass, burden themselves with the costs altruistically.
Right now in our infant stage people cannot seem to see the assumable future because they are too busy & active being engaged with something totally new. Everyone that keeps up on the news can tell they are going to be a big part of our lives; but how and which cryptos is something of a mystery. This growing interest in cryptos is driving decentralization. People are running nodes even if they're not mining or running POS for rewards. This enthusiasm gives a very optimistic look for cryptos, because if you look at a map of nodes/mines, they're all over and in numbers. But as time goes on, and their complexity rises, there will be a burgeoning necessity for more hard drive space & processing power. Some run light, but the ones with the most utility will eventually have the potential to run into terabytes, while processing complex actions. Surely there will be advances in technology that can lighten or redistribute the load, but it's certain that there will be infrastructure costs associated with participation. If we are all very lucky hard drives will develop to a point of being the size of a quarter, hold terabytes, and be inexpensive. Still the associated computer, power supply, and all associated equipment will eventually fail and need replaced.
The question confronting us with time passing and crypto nodes, is how many will continue to keep up? If successful cryptos used by banks have many publicly ran nodes. but they don't receive a reward, then how many of those independent nodes are will continue to personally fund the expense? The banks will surely run nodes to continue operating as a service to themselves - there is no question there - but beside those directly paying to use a utility/currency that no one else uses, could we expect anyone else to run nodes? It may seem trivial, but an example of a problem would be if banks have a majority node-vote they can implement any protocol changes they wish and retroactively change the ledger. With just banks running nodes the security of decentralization no longer exists, so the chance of being hacked becomes much more realistic. To put this in a simplified view, it's as if the banks simply changed their encryption to existing servers, effectively nothing has happened without decentralization.
Banks are already convincing government regulation to loosen up because they are adopting an “immutable ledger” in Asia. With all the enthusiastic participation there is little concern about these networks that do not use incentivization. But as the number of unpaid nodes shrink over time, the ledgers will become more plastic*. Banks could become more powerful than ever, which is obviously a problem because what's good for a bank isn't always good for everyone else – possibly including other banks that are not part of the majority node-vote.
The safety & immutability of cryptos are the main reasons for adoption, so it shouldn't be too challenging to see the case for decentralization - which is the best way to improve safety & immutability. Without those benefits of cryptos, any entity will eventually fall fault to actions against them - from breaking laws or state stabilization. The governing body/s will bring back the archaic regulation for stable currency/utility, seeking to restore lawful & reputable service so business & life may continue. Another way to look at this situation is that would be a shame to eliminate something like clearinghouses, and then have to reestablish them. Imagine if all credit card infrastructure was gone one day, and how much it would cost to replace that infrastructure that you suddenly need again. To prevent that kind of burden we need to encourage sustainable decentralized, through incentivization.
Mining is the current defacto incentivization for decentralization, but it is likely we will see many cryptos switch to other forms; but that doesn't erase costs of maintaining a node. As the world moves forward with widely adopted cryptos, the efficiency will increase with dedicated machines. But those dedicated machines come at an expense that the general public may not want to burden themselves with, for no reward. There is a great chance that different entities will start running node clusters that can pay for themselves, but have high initial costs due to the amount crypto needed for proof of stake. To cover the costs wide ranges of vested interests will likely invest - not just banks. That is valuable infrastructure that strengthens cryptos as a counter balance to those that would otherwise potentially edit the ledger in their favor. The increased amount of nodes also greatly enhances security with a lot of redundant ledgers, and adds confidence for business adoption within the country they reside.
As much as cluster “farms” of nodes are a probability, we may also see covert nodes. This is predicated on improved technology for hard drives and improved internet**. An example of this would be your internet modem or TV box (Apple, Dish, Direct, etc) would run a node or two of something that is a major crypto of significant use. By having this running covertly it could reduce the user's bill for the service the device provides (Apple/Dish/etc); but also have a disable switch for competitive gaming or security reasons. Clearly this won't happen tomorrow because it essentially needs new technology and some clearly established cryptos in use, but it's on it's way.
Right now it's very important to understand why incentive based cryptos are important, how they drive decentralization; and the implications of that. Without decentralization we've got a new (less pragmatic) way to store information on servers, that could be used in malicious ways. Ideally there will be too many decentralized devices running any given crypto to possibly make it worth purchasing enough nodes to gain a majority, for anyone. Consider what the centralized/decentralized situations looks like in the coming days as you are looking at which crypto-utilities and crypto-currencies you want to work with, invest in, run nodes, miners, etc.
*, plastic: can be shaped into anything; changed
**, There may be a possibility of running cryptos on a carrier (frequency) that isn't part of your regular internet so that they can both exist simultaneously without any interaction in the slightest of ways. This would require large scale integration with adapters or new equipment at all the places providing internet.