Well it is true. Some chalked it up to a one-off thing. Others were all-in and argued it is the next step in the evolution of money. Bitcoins, whatever they are, are not going anywhere. Nor is the fever that has seized the general populous. Listen to them clamouring for the privilege to invest in a cryptocurrency that may actually bring them much bitter disappointment.
The value of cryptocurrencies has been rising headily. Ten, eleven, fifteen times, followed by many slumps. So great has been the effect of these unknown digitalized fortunes that people have even went after madder ideas.
Can you imagine that someone out there is actually willing to invest into something called Initial Coin Offerings? Well you better believe. Whole companies, from the self-styled fintech experts, to the established giants of finance such as JPMorgan, are now on the trail of a future that will increasingly see people buy make-believe money, as someone call them.
These intangible bits-and-bytes riches are proving decently popular, quite palpable, and may indeed have some very serious effects on the economy, as we understand it. In 2017 alone, the used amount total of tokens by companies raised over $3.5 billion.
Despite the general easy-going attitude towards all of this, we should be hedging against adversity. Central banks and pension funds must not fall in for the promise of boundless riches.
Another reason for concern should be that these financial instruments are untested. They are likely to both go down and go up. You will see many people defend them and others put them down.
Whatever the truth, caution is advised
On the other hand, a bright future for the technology that has propelled the rise to prominence of the bitcoin may be out there. The Blockchain is rather nifty and more fintech companies are adopting it.
It is not only that. Blockchain-based start-ups are now increasingly making a splash in the European Union, for example. For instance, the European Central Bank is rather opposed to the proliferation of unregulated digital riches. On the other hand, the ECB is making some very palpable efforts to prop up fintech companies.
We are quite pleased with that, as it bodes well for the future of blockchain.
What is blockchain, though and how does it play in the good boys’ list of central regulatory organizations? Simply put, blockchain allows for the effortless execution of so-called smart transactions.
Blockchain has led to much optimization, cost cutting and ensuring that there is an inexhaustible supply of user-friendly apps, which will facilitate banking even further.
Not only that. Supporters of blockchain will even argue that it can effectively eradicate all forms of bank fraud, which is indeed something to be hopeful for.
If we are discussing Bitcoin, what is that really troubles people who look with worry how other splurge on something as ill-defined as the digital gold.
Let us look at what has transpired recently. Bitcoin has hit a depth so low, that to many people this must have been a rather unpalatable experience.
Recent events have undermined the cryptocurrency’s credibility. The bubble can burst at any moment. Quite a few people’s livelihoods could now be exposed to the whims of an undefined token.
It is even worse. New study shows that people are actually using this new crypto-mania to flog their illegal activities. By one estimate, 49% of all transactions are used to support illegal activities. This should definitely be a scary account of what the future may be if such anonymous fraudsters are allowed anywhere near the hard-earned money of regular people. And if you think that is a reason for concern, you should acknowledge that whole governments are allegedly backing armies of hackers to steal bitcoin and skirt past international financial sanctions.
Some will argue that Bitcoin has a social value. Yes, many would say that their money are this way their own. But governments do not charge you to make sure that a handful of people are rich while others aren’t. And while you can make the argument that there has been a lot of dishonest politicians, you cannot deny the fact that taxation keeps our societies working.
Bitcoin on the other hand does not contribute anything to the system. In a way, it only robs people out of what is rightfully theirs, ours even. Bitcoin may hold strong fascination with people who want to see the government kept at bay, but it certainly does not help us build a brighter future, for everyone.