Bitcoin – last wake up call for financial players

Bitcoin is at US$17,000 with a market capitalisation of US$286 billion as I write this article. At the same time, 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 this week in Wall Street, lending major support to the current prices. Some pundits even price Bitcoin at US$100,000 in the next 18 months.

Privacy a growing concern

For those unaware, there is an ongoing global flight in capital, especially with Paradise Papers leak (more recently) and Panama Papers leak. After all, we are living in an age where information leak commonly happens. 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?

It does not take much to drive up the crypto market. All it takes is for a fraction of the billionaires in the world to simply keep a small percentage of their assets in crypto. After all, cryptos are safe, private and easy to store, a peace of mind that banks are not able to offer these days (even Swiss bank accounts).

Bubble, or is it not?

Bitcoin has been compared to the Internet. Let us not forget the fact that Tim Berners-Lee gave the invention of the internet World Wide Wide away for free, so there is no way to put a price on the “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.

In a sense, Bitcoin or cryptocurrencies are the same. The more people using it, the more valuable it becomes. Yes, it has officially beaten the Tulip Mania and considered the biggest bubble known to humanity, but have the anti-Bitcoin establishment (the banks) got it wrong? It was easy to call it a foolish idea when it was worth a few cents a Bitcoin, but now at US$17,000 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 realize that the financial industry has not innovated very much, sticking to decades old technology to run their services. It is high time they wake up.

Perhaps if financial players were able to finally 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 improved using blockchain technology. What is true however, is that many people will lose their jobs when this happens.

Read our earlier coverage on Bitcoin here and here.

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