Julian Vigo, writing for Forbes, tells us that developing countries and millennials see the 2007 economic collapse as an example of what happens when private companies are allowed to run public assets without oversight. Most primers on bitcoin paint it in a positive light even though there are many risks associated with it. Alan Johnson, writing for SuperPosition, has also shown us there are significant environmental concerns with bitcoin mining. So why is there such sustained interest and growth in cryptocurrencies?
“One solution to the mishandling of public funds in the hands of the private or public sectors has been to hand this task over to the blockchain,” Vigo tells us; there is “no central authority on this product and it is based on maths instead of gold which is viewed, by many, as a democratizing force of economic power…for many in the developing world and millennials who see their futures as pre-determined by debt and the uncertainty of the precarious economic systems in place, cryptocurrency is their ‘glass half full’ towards the future.”
Teddy Wayne, writing for The New York Times, says, “As traditional paths to upper-middle-class stability are being blocked by debt, exorbitant housing costs and a shaky job market, these investors view cryptocurrency not only as a hedge against another stock market crash, but also as the most rational – and even utopian – means of investing their money…After years as a niche market for technologically sophisticated anarchists and libertarians excited about a decentralized financial network not under government control, digital coins may be on the verge of going mainstream.”
Vigo tells us that in London, a third of investors back digital currencies. Kenya, Nigeria, Uganda and South Africa have also embraced the blockchain experiment with exchanges being set up offering opportunities to the unbanked. Cryptocurrencies are a third option to the current economic model and presents a marked shift from the public/private dichotomy. The market cap of all the bitcoin in the world has surpassed $220 billion, so it’s clear that cryptocurrencies are not going away any time soon.
Reality Changing Observations:
Q1. China has outlawed cryptocurrency. How will the SEC react to cryptocurrency as it grows and evolves?
Q2. Why are cryptocurrencies so popular?
Q3. How can you protect yourself when buying cryptocurrency?