Cryptocurrencies: the Future of Money?

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With the recent shutting down of Bitcoin exchanges by the Chinese government there has been a rise in discussion of and speculation about cryptocurrencies in general.

Are cryptocurrencies a form of money?

The detractors say, “no.” And there are a number of cryptocurrency detractors.

  • Early on, Warren Buffet said to stay away from Bitcoin (and by implication other cryptocurrencies) that it was basically “a mirage.” More recently, Jamie Dimon, CEO of JPMorgan Chase, called the rise of cryptocurrencies a “fraud” and likened it to the infamous “tulip mania” bubble in mid-17th century Holland. Vítor Constâncio, the vice president of the EUC (European Central Bank), echoed Dimon’s assessment, referring to Bitcoin as a “sort of tulip” and saying that the EUC does not see Bitcoin as a currency nor a threat to central bank policy.
  • Billionaire Mark Cuban also feels that Bitcoin is a bubble, tweeting that, “You know it’s a bubble when a random twitter thread bounces the price.” However, Cuban did praise the blockchain technology behind cryptocurrencies, acknowledging that it does have value and sees it at the core of most transactions in the future.
  • Other detractors point to the unsavory widespread adoption of cryptocurrencies by terrorist groups, drug dealers, and ransomware extortionists who operate in the underground economy or “dark web.”

On the other side of the coin (pun intended) are the Bitcoin and cryptocurrency supporters.

  • One of the biggest fans of Bitcoin and blockchain technology is billionaire entrepreneur Richard Branson. Branson has referred to blockchain technology, the underlying technology behind bitcoin and other cryptocurrencies, as an “economic revolution.” When questioned as to whether or not he thought it would work, Branson pointed out that it is working, although he did acknowledge it’s current volatility.
  • In early April 2017, Japan began accepting Bitcoin as legal currency backed by many major retailers. It is also reported that Russia, one of the strongest opponenets of Bitcoin, is now seeking to regulate cryptocurrencies and their deputy finance minister said that authorities hope to recognize Bitcoin and other cryptocurrencies as a legal financial instrument sometime in 2018.
  • And in August 2017, Bloomberg News reported that a number of banks, such as Barclays and Credit Suisse, were joining with UBS Group in an initiative to form a new type of digital currency using blockchain technology, the kind of technology used by Bitcoin and other cryptocurrencies.

After researching the history of money, and observing many of the latest technology improvements and innovations, I agree with those who believe cryptocurrencies are here to stay. I also agree with the cryptocurrency supporters who predict that they will only gain in usage and popularity.

There are some big name businesses that are accepting Bitcoin as payment: Overstock.com, DISH Network, Microsoft, and Intuit. In addition, Expedia, the largest online travel booking agency, accepts Bitcoin to pay for hotel bookings, and Shopify, an ecommerce site with more than 75,000 merchants, gave their merchants the option to start accepting Bitcoin payments through BitPay.

While Bitcoin is the most visible of the cryptocurrencies, there are other companies entering the marketplace, such as Ethereum, Litecoin and Bitcoin Cash.

Whether or not Bitcoin remains the leader is another story. However, it is important to acknowledge that many of the earliest Internet browsers, such as Mosaic, Netscape Navigator and WorldWideWeb, have either disappeared or have morphed into other more recognizable names such as Nexus and Internet Explorer. Internet browsers have not gone away. Can the same be said of cryptocurrencies? The future will tell.

Technology and technology trends are important to us at LegacyShield. Advances in technology have allowed us to offer individuals a safe, secure digital platform on which to store important documents and information, life stories and last wishes, and assign specific controls as to who has access to certain information. Innovation can come from many different places. If for no other reason, we believe cryptocurrencies and the blockchain technology behind them are trends worth watching.

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