It’s no secret that cryptocurrency (and blockchain) is one of the hottest topics in 2017-2018. There are many great articles explaining why to invest in them, so I’ll keep this part short.
Today, the process of moving money across businesses, customers, governments works through a number of intermediaries and middlemen. Bitcoin came about as a means to cut the middleman by creating a new currency which didn’t involve any monetary institutions and avoid the unnecessary interchange fees. So the Bitcoin architecture (blockchain) and “altcoins” (Bitcoin alternatives), can disrupt many of these intermediaries and act as a layer similar to the central banks — which addresses the big headache of not holding any liabilities.
The general view on Wall Street is that the crypto market as a whole is significantly overvalued, with many arguing that bitcoin has no intrinsic value and thus cannot be evaluated.
However, there have been many signs lately of legitimacy, that signal a positive growth in the upcoming year.
For example, The launching of bitcoin futures on CBOE and CME (and Nasdaq later this year) has been considered as a major achievement in bringing cryptocurrency to the mainstream. This will allow investors to have plenty of options to bet on bitcoin using more traditional financial vehicles.
In addition, China’s largest Bitcoin exchange (prior to the cryptocurrency trading ban imposed by the local government) is reallocating to Japan and South Korea, the second largest cryptocurrency market in the world. The emergence of large-scale cryptocurrency exchanges will lead to an exponential growth rate of local cryptocurrency markets in both Japan and South Korea.
Nonetheless, one of the biggest names in Silicon Valley, Peter Thiel, is placing a moonshot bet on cryptocurrency, by investing hundreds of millions of dollars. Cybersecurity legend John McAfee, has also predicted lately that Bitcoin might reach $500,000 by the end of 2020.
After confirmation, a transaction can‘t be reversed. By nobody. And nobody means nobody. Not you, not your bank, not the president of the United States, not Satoshi, not your miner. Nobody. If you send money, you send it. Period. No one can help you, if you sent your funds to a scammer or if a hacker stole them from your computer. There is no safety net.
Neither transactions nor accounts are connected to real-world identities. You receive Bitcoins on so-called addresses, which are randomly seeming chains of around 30 characters. While it is usually possible to analyze the transaction flow, it is not necessarily possible to connect the real world identity of users with those addresses.
Most cryptocurrencies limit the supply of the tokens. In Bitcoin, the supply decreases in time and will reach its final number somewhere in around 2140. All cryptocurrencies control the supply of the token by a schedule written in the code. This means the monetary supply of a cryptocurrency in every given moment in the future can roughly be calculated today. There is no surprise.
Fast and global:
Transaction are propagated nearly instantly in the network and are confirmed in a couple of minutes. Since they happen in a global network of computers they are completely indifferent of your physical location. It doesn‘t matter if I send Bitcoin to my neighbour or to someone on the other side of the world.
No debt but bearer:
The Fiat-money on your bank account is created by debt, and the numbers, you see on your ledger represent nothing but debts. It‘s a system of IOU. Cryptocurrencies don‘t represent debts. They just represent themselves. They are money as hard as coins of gold.
Cryptocurrency funds are locked in a public key cryptography system. Only the owner of the private key can send cryptocurrency. Strong cryptography and the magic of big numbers makes it impossible to break this scheme. A Bitcoin address is more secure than Fort Knox.
You don‘t have to ask anybody to use cryptocurrency. It‘s just a software that everybody can download for free. After you installed it, you can receive and send Bitcoins or other cryptocurrencies. No one can prevent you. There is no gatekeeper.