Bitcoin – the last wake up call for financial players
Hyper focus on the price of Bitcoin has led to a large number of pundits missing the point entirely
The cryptocurrency moves so quickly it requires a near daily ‘state of the Bitcoin’ update. For now, let’s take a look at recent developments and how it impacts the world’s most famous cryptocurrency moving forward.
Bitcoin is at US$15,200 and recently the Winklevoss twins were recently announced as the world’s first bitcoin billionaires. Quite a tidy sum for an US$11 million bet placed years ago.
As if that was not enough, Bitcoin futures also started trading in Chicago, lending major support to the current prices. Some pundits even predict Bitcoin will hit US$100,000 in the next 18 months.
But for those unaware, there is an ongoing global flight in capital, especially after the recent Paradise Papers leak and previous Panama Papers dump .
After all, we are living in an age where information leaks commonly happen. It also does not help that many governments around the world are strapped for cash. Who would not want to slap a huge fine on a fat cat stashing his or her money in a safe haven?
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All it takes is for a fraction of the billionaires in the world to simply keep a small percentage of their assets in crypto to drive up the crypto market. After all, cryptos are safe, private and easy to store. They offer a peace of mind that banks are not able to provide these days (even Swiss bank accounts).
Bubble, or not?
Bitcoin has been compared to the internet. Let us not forget the fact that Tim Berners-Lee gave the internet away for free, so there is no way to put a price on “internet”.
As of 2017, there are reportedly 3.5 billion internet users. Now, just imagine if everyone who accessed the internet was charged a fee, Berners-Lee would have been a very, very rich man but who knows what would have happened to the internet.
In a sense, Bitcoin or cryptocurrencies are the same. The more people use it, the more valuable it becomes.
Yes, it has officially beaten the Tulip Mania and considered the biggest bubble known in history, but have the anti-bitcoin establishment (the banks) got it wrong? Bitcoin was easy to call it a foolish idea when it was worth a few cents , but now at more than US$15,000 is it still really a foolish idea?
Drive to digitize payments
From our perspective, the financial players have totally missed the plot.
Low transaction fees, fast transaction time, and privacy assurance are the main reasons why crypto and Bitcoin usage continue to grow. One does not have to look far to realise that the financial industry has not innovated very much, with some of their core processes reliant on decades-old technologies. It is high time they wake up.
Perhaps if financial players were able to match the speed and low fees afforded by Bitcoin or other cryptos, then they could stand a chance to compete.
Either way, the use of blockchain is undeniably pivotal as banks spend more and more on compliance every year.
While this is definitely unavoidable, it can definitely be reduced using blockchain technology. What is true however, is that many people will lose their jobs when this happens.
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This article was first published on The Low Down, a blog page for Momentum Works.
Read our earlier coverage on Bitcoin here and here.
Copyright: aurielaki / 123RF Stock Photo
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