March 4, 2018
Do you remember what was taking place in August 2008? The Olympic Games opened in Beijing and the domain Bitcoin.org was registered. In January 2009, Slovakia officially became the 16th member of the Eurozone and adopted the euro. The same month, the Bitcoin Network came into existence. In March 2010, Hurt Locker won best film at the Oscars and Bitcoin was worth $3c. In February 2011, the Arab Spring saw Hosni Mubarak resign as Egypt’s President and Bitcoin was worth $1.
A fair few things have happened since – including the extraordinary rise of Bitcoin value – up until just before Christmas 2017.
Satoshi Nakamoto is widely credited as the inventor of Bitcoin but he also created the first commercial Blockchain in 2008 – which is a continuously growing list of data records, called blocks, which are linked and secured using cryptography. The first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta – so the concept is far from being new.It is set, however to become the norm. By 2020, Dubai plans to conduct all government business by Blockchain. 80 per cent of the world’s banks are also developing their own Blockchain.
Technology is changing money
We are moving away from commodity-based [physical] value and moving towards network-based [digital] value.
Fiat (no intrinsic value) money has major problems; worldwide debt has reached distressing levels. Credit cards first appeared in 1946 – technology has barely changed but credit availability worldwide has been severely abused. Centrally banked currencies are engaged in competitive devaluation and it’s even been reported the price of gold may be being manipulated to conceal inflation.
Worldwide, people are using less cash to pay. Credit and debit cards remain popular but are increasingly being used via smartphones.
Smartphones and digital transactions now go hand in hand. Digital currency and fiat currency already co-exist, but digital currency will only continue to grow.
Blockchain is the future of transactions
Described on TheGuardian.com as “one of the biggest IT inventions of our time”, Blockchain is a mutual distributed ledger that keeps digital assets completely secure – creating new possibilities for money. It removes the risk of theft, duplication and it has never been hacked. It allows people everywhere to transact safely and securely. It is the only reliable system to validate digital transactions transparently and globally.
Bitcoin began it all, but it does have limitations and is steadily losing market share. As the prototype,like all first inventions, what follows is more advanced. Think about the phone you had before your first smart phone. Early adopters have made millions – despite its well-publicised fall in value late last year, it is still worth over $9000 – from a $3c start 2010.
A growing number of firms are offering services to the new adopters encompassing advice on when to buy and sell and which currencies to trade – Bitcoin being the best known. Despite being around for nearly eight years, Bitcoin is still only accepted by 400,000 merchants worldwide.
Imagine, however, a new digital currency that provided true usability; where we could shop anywhere in the world, pay using digital currency, but where the merchant chose to be paid in his/her preferred currency. Where there were no merchant fees – something that can be crippling with credit cards. Imagine being able to shop – using your smart phone – buying goods and services anywhere that accepts Visa and MasterCard,in over 60 million outlets worldwide. Then reflect on being able to transfer all cryptocurrencies to this ledger.
Is this some future fantasy? Actually, it will be possible in June.