- Cryptocurrency is coming for you, regardless of whether you want it to. Possibly sooner than you think. Seems unlikely there will be an ‘opt out’ available. You’ll have an online cryptocurrency account or you won’t have money.
- Encourage those considering careers in law, accounting and banking to look elsewhere. Employment prospects for those professions look dim.
Bitcoin and Blockchain are not the same
- a trust machine,
- a black box,
- disruptive, and
- the death of auditing.
“How do I know that my transaction is secure and honoured, beyond all doubt?”
“But how do I know that now, in a world of traditional banking?”
What’s a blockchain?
The ‘block’ part of blockchain
The ‘block’ is a group of transactions – much like the clearing batches banks use, but smaller. There are up to 2,000 transactions in Bitcoin block, for example. Each individual transaction is connected to the next one up a tree called a ‘merkle root’, which forms from the bottom up.
The ‘chain’ part of blockchain
Logistical challenges and how cryptocurrencies overcame them
The downside of making access difficult to fake
No, the Welsh IT dude can’t get to that Bitcoin any other way. You must have your account file to access your cryptocurrency online. There’s no bank you can walk into with your license and confirm that money is yours. There’s no central administering body that will verify your identify and give you a new copy of the file. You can’t pull it out of the bank and keep it under your mattress. You lose that access file? It’s gone. This is part of the reason it’s so secure.
Who provides the computing power to do this?
What does this mean for you?
- Cost of finance would drop from 2% to negligible. This is in part thanks to needing fewer employees.
- You may find we don’t need several competing banks vying for to sell us debt. Instead, you could have a single central bank per nation. In Australia this would likely be the Reserve Bank.
- There would be no hard currency. Say goodbye to coins, notes and stashing anything under the bed, which leads to…
- …banks offering negative interest rates. No one will have that hard currency stashed away out of the view of the bank, so it could legitimately work.
- Cryptocurrencies are digital only. You can only use them through your digital wallet or a Visa card connected to that wallet.
- Those cryptocurrencies are not overseen by any kind of authority. Not a government, not a corporation, nothing…
- …which is why they’re touted as havens for criminals: the tax agencies have no visibility on them.
- Their markets are ‘frothy’: astronomical price rises and drops are common.
So, should I be buying Bitcoin now?
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