One of the sure-fire ways to spot a hot trend is when the topic or product not only shows up in mainstream media but also in social media adverts and inbox spam.
Cryptocurrencies, especially Bitcoin, are one of the hottest topics at the moment and show no sign of slowing down.
Part of the reason for the surge in interest concerning Bitcoin and other cryptos is Bitcoin’s dramatic rise over the past few months. As the value of a single Bitcoin neared the $10,000 mark, the currency became the subject of television comedies, social media posts and even a claim from 50 Cent that he had made millions by accepting Bitcoin as payment for a recent album release – the rapper eventually admitted that he owned no Bitcoin.
While a lot of the current focus is on Bitcoin, cryptocurrencies are not new. The first wave of digital currencies was created during the tech boom of the 90s. The first attempts failed for a number of reasons including financial issues, conflicts between founders/staff and fraud.
Most experts feel that one of the reasons for the early crypto failures was the use of a Trusted Third Party approach. This meant that the company launching the currency verified and facilitated the transactions. When the company failed, the currency became worthless.
Bitcoin was introduced in 2009 and was described as a ‘peer-to-peer electronic cash system’. Much like peer-to-peer file sharing, the currency is decentralised. Transactions are verified and recorded via the Blockchain, a public ledger available to everyone of every transaction that has ever occurred within the network. Every account balance is available and all transactions are unforgettable and cannot be forged.
Why is crypto trending?
Of course, one of the main drivers in the rise of popularity is the meteoric rise in the Bitcoin’s value.
Another is millennials.
The concept of a currency that’s based on technology and not backed by a government is far easier for millennials to grasp and embrace than for many older generations. Millennials use technology in almost every aspect of daily life. They have also proven more than willing to abandon traditional banking systems and payment methods.
Many experts believe that cryptos usher in a new ‘gold rush’ with huge investment potential for millennials, also with a corresponding growth in technological innovation and ancillary product development.
Who can use crypto?
Anyone can use cryptos, although their widespread acceptance is still somewhat limited.
In the early days, cryptocurrencies were the preferred medium of exchange on the dark web, especially on the infamous Silk Road site. A few small and typically privately held, businesses such as pizza restaurants and specialty shops also accepted Bitcoin. Often this was done as a publicity move more than as an innovative business decision.
Now Bitcoin and other digital currencies can be used on major online retailers, chain stores, brick and mortar and online casinos. Major financial institutions offer a wide range of digital currency investment options as well as numerous buy and sell exchanges.
What impact does is have on the future of finance/fintech?
There is little doubt that cryptocurrencies will continue to be part of the future of finance.
Recent moves such as the Swiss government’s acceptance of Bitcoin for tax payment and Venezuela’s introduction of a digital currency pegged to their petroleum industry are excellent indicators of the strength and viability of digital currencies.
Even those who avoid digital currencies due to their sometimes extreme volatility will benefit.
The rise of fintechs who act as disruptors to the traditional banking and financial systems have forced the established institutions to change and adapt to address the needs and desires and to embrace new technologies.
The power of tech coupled with new business models are creating a landscape where everyone benefits due to innovation and lower costs.
Cryptocurrencies may well have the same impact and one that is global in scope. Those who closely follow cryptocurrencies with be focused on the upcoming Bitcoin and Blockchain Berlin, a three-day conference which takes place in April.
Soon TransferGo customers will be able to buy or sell the likes of Bitcoin, Bitcoin Cash, Ethereum, XRP and Litecoin. We’re sure this new service will be in high demand. Make sure you’re one of the first to know when it is here. Simply download our iOS app to register your interest and see the live prices feature now.
The TransferGo Blog has published a number of articles on Blockchain and cryptocurrencies. They can be found alongside other articles which deal with financial matters such as FX and currencies in other countries.