At the start of the year 2017, only few people were aware or even knew anything about bitcoin or cryptocurrencies in general. However, bitcoin has appreciated in value by 702% YTD and it is no secret that 2017 has been a big year for the cryptocurrency market.
Bitcoin started off the year in January at a value of $1000 to one bitcoin… it has now crossed the $8,000 mark as at November. And as with any new thing that begins to make progress and impact, detractors and naysayers will usually come to the fore. We have had the CEO of JP Morgan and a few other financial players throw mud at bitcoin and other cryptocurrencies. We have had some jurisdictions attempting to ban or put impediments in the way of digital currencies. We have had financial institutions sometimes frustrate the efforts and operations of blockchain-based enterprises, but these detractions have all turned out futile. The more the naysayers have spoken or made moves against bitcoin and its counterparts, the more bullish the digital currency market gets.
Some respected crytptocurrency traders have even predicted that bitcoin will crack the $10,000 mark by January 2018. They also predict an upward value for other cryptocurrencies such as Ethereum which is expected to breach the $500 mark within a similar timeframe.
It is understandable that some sections of the mainstream public will be apprehensive about the digital currency space. Most of these reservations are borne out of little knowledge about the modus operandi of cryptocurrencies and blockchain technology in general. These misconceptions are further fuelled by some “financial experts” who keep on exploiting the public through some of the deliberately skewed pronouncements they make.
JP Morgan CEO Jamie Dimon in September of this year claimed bitcoin was a fraud and further said that he will give any of the bank’s traders who dealt in the cryptocurrency a sack. But within days, the bank had been discovered to have made some significant deals with bitcoin.
UBS Group chief investment officer Mark Haefele also said that he will not make investments in the cryptocurrency world because it is decentralized and he is more comfortable with currencies backed by a central authority.
Bitcoin – Disrupting the banking and finance industry one step at a time
One of the easiest ways to end people’s interest in a cause or agenda is to mudsling and spew propaganda. We have heard issues of cryptocurrencies being anonymous and aiding underhand activities and what not all, in an attempt to discredit it. But the funny thing is that mainstream monies are also being used to fund illicit activities equally if not even more and yet we do not see financial institutions calling for their withdrawal. In fact, blockchain technology which is the underlining technology supporting cryptocurrencies is the most transparent platform the world has seen till date.
But before you imbibe and accept the propaganda from the mainstream financial sector, note one thing; when you take our money out of your account and put it into cryptos, the banks lose money. By taking your assets out of mainstream banking and putting it into the largely democratized world of cryptocurrencies you give banks less control over your assets.
Large financial institutions might keep spewing misinformation about bitcoin, but new reports show that in actual fact the use of blockchain technology for good far outweighs its use for unacceptable activities as compared to the mainstream financial system.
A new National Risk Assessment of Money Laundering and Terrorist Financing report suggests that the chances of terrorists making use of cryptos for their activities are pretty slim, it notes that “digital currencies have only become marginally mainstream since 2015”. It also further goes to state that there is serious lack of evidence that terrorists make use of cryptos. However as with every single financial system since the beginning of time, the more people adopt it, the more rate of use for illicit activities will also increase.
Meanwhile, a Royal United Service Institute (RUSI) report suggests that most singular terrorist acts are perpetuated using student loans, payday loans, welfare benefits and cash to fund their activities.
RUSI consultant David Carlisle has said that there is too much attention being placed on bitcoin being used to fund terrorist activities when there is hardly any evidence to back this.
Carlisle states that “terrorists generally have vast financing streams, which show little sign of drying up.” Furthermore, he says hyping up bitcoin and other cryptocurrencies for terrorist activities is an ‘overreaction that could stifle an important new financial technology.’
David Carlisle goes further to say that this has not stopped governments from jumping on the bandwagon and demonising alternative forms of money. He particularly notes that “Treating cryptocurrencies as an exceptional threat creates the misleading impression that more conventional financial products are not already equally, or more, vulnerable to terrorist exploitation.”
Smart banks and financial institutions should find ways to plug into the new crypto-economy and stay relevant instead of spreading propaganda about bitcoin and cryptocurrecies because what history has shown in terms of market behavior is that the more the detraction, the higher the value recorded. In fact there are several blockchain products available for mainstream banks to seamlessly tap into which will go a long way in streamlining their operations, boost efficiency and significantly increase their profitability.