Editor’s note: this is a guest post by Rupert Hackett, who works for an Australian bitcoin business group, is studying the world’s first Masters in Digital Currencies and regularly blogs for BuyaBitcoin.com.au.
Bitcoin has been called a lot of things, a scam, a Ponzi scheme, a bad investment and even ‘one of the most powerful innovations in finance in 500 years’ -WSJ. Bitcoins history is marred with scandals, gaining reputation as the currency of choice for those wanting to obfuscate the law. But from these troubled beginnings lies a ‘techno tour-de-force’ – Bill gates, set to reignite the financial industry into a new innovative era. Investment in bitcoin related startups is currently sitting around USD $700 million and growing fast.
Bitcoin the technology is not perfect, but it has abilities we have never seen before. For example, the Blockchain creates a distributed public ledger allowing for verifiable record keeping, no central authority needed. This forms the backbone of a system that is cheaper, faster and more secure than any other system; it’s the first time you can send money to anyone in the world for free, without a third party. Explaining Bitcoin in depth would take multiple pages, a primer in cryptography and some dedication on your behalf. For the purpose of this ‘primer’ understand that Bitcoin is fundamentally a technology with far-reaching transformative implications, not just a currency.
We have seen the price of Bitcoin grow from USD $0 to $1216 ( on the 29th Nov, 2013) within 30 months. The price high was created by bitcoin going ‘main stream’, being featured as sensational daily news for its massive price increases but not for its technological implications. The majority of people who have heard of bitcoin only know of its volatile price.
18 months later, we are starting to see products and services being built which use bitcoin at the infrastructure level. This is where Bitcoins potential really lies, not as an obscure payment system but as an infrastructure for better consumer products. Remittances, a USD $550 billion global market is being disrupted by Abra, a free app which uses Bitcoin offering cheaper, faster and easier alternatives to its competitors such as Western Union. Released only a month ago, these types of products are set to revolutionize the archaic world of banking and finance and this is only the beginning.
Until now Bitcoin has had a massive issue, It’s been too difficult for the everyday consumer to understand; it’s either not worth their time or beyond their comprehension. But with every problem is an opportunity for an entrepreneur, and that’s exactly what’s been happening; consumer friendly products built on top of bitcoin are emerging.
This view may seem evangelistic about Bitcoins future, but it’s not for people in the FinTech industry. We have seen the Bank of England state that the “Bitcoin revolution could be the next internet”, Ex Citigroup CEO Vikram Pandit has said “Virtual currencies have the power to change the world” personally investing in Coinbase whilst former CIO of Nike Anthony Watson now works for Bitreserve. UBS, BNY Mellon and IBM are starting their own ‘blockchain investigation teams’ as of a week ago and this is only the beginning. Every day there is another large corporation probing into this space and deriving the same conclusion, this technology is transformative.
Bitcoin is far from dead, business is booming behind the scenes, investment is doubling every 3 months, more and more prominent figures are expressing their affirment. So if Banks and technology industries are starting to take bitcoin seriously, maybe it’s time you started doing the same.