So, what is Bitcoin? And is it the financial Road Ahead?
You may have heard of Bitcoin this month. Its value has been gyrating wildly and heading toward$US20K. Clearly it holds substantial value, but what is it?
Bitcoin is a “Cryptocurrency”. A totally secure digital currency with the potential to remove middlemen and clearinghouses from the transacting landscape. Utilizing a ‘Trust Machine’ – whereby opinions of a transactions validity are confirmed and reaffirmed by a network of independent computers. Essentially, Bitcoin, (and its underlying platform, Blockchain), is a self-auditing ledger. Allowing person-to-person transactions to take place with absolute security and transparency. Imagine, loans without banks, internet trading without ebay and ridesharing without Uber…
Basically, it’s the Fin-Tech equivalent of leaning over your neighbor’s fence, and asking, “How much do ya want for the old Ford pick-up?”.
And that is the paradigm shift – the ‘Brave New World’ – envisaged by Bitcoin enthusiasts and supporters. It is this perceived power that prompted no lesser Tech visionary than Bill Gates to quip,
‘Bitcoin is a Tour de Force. Nobody can stop Bitcoin’.
Well, William Henry Gates III, has got my attention a little… After all, Billy boy is the man that predicted the exponential growth of personal computers and envisaged a PC in every home. Similarly, he may have noticed that, Bitcoin and the Blockchain are fast growing acceptance within the financial and business worlds.
Bitcoin and Blockchain start-ups have sprung up across almost all sectors. Examples include,
- Banking, (IBM predicts that 15% of banks will be using the blockchain by the end of 2017).
- Insurance, (Aeternity is one blockchain project that is building tools that are useful in the insurance industry).
- Supply Chain Management,
- Private Transport and Ride Sharing, (Startups working in this area include Arcade City and La’Zooz).
- Even Charity, (BitGive Foundation use blockchain’s secure and transparent distributed ledger to let donors see that the intended party has received the funds).
- And many more…
Cryptocurrency’s gaining wider acceptance
In Australia, you can now use your bitcoin to, buy your coffee, work-out, go para-gliding, design a website and even hit the Pub. It seems Bitcoin is popping up everywhere.
Indeed, Crypto Industry luminary Mr. Peter Smith (CEO of Blockchain), claims 2018…
“… will be the first year we start to see central banks start to hold digital currencies as part of their balance sheet”
Peter even went further claiming Central Banks would ‘mint’ their own Cryptocurrencies.
It is also interesting to note that this month saw the world’s first Cryptocurrency Futures Exchange opened by CME Group. Essentially trading a derivative security of a digital asset. An asset comprising of some very clever computer code – but still consisting only of electronic 1’s and 0’s in a distributed computer database.
With Bitcoin gaining wider acceptance and commanding such high prices, you better buckle up for a wild ride, as it appears Bitcoin and Blockchain are here to stay.