Cryptomorrow: the prospects of electronic currency.
Bitcoins and other digital currency are the chief newsmakers today. The authorities respond upon that financial “hurricane” in different ways: Japan acknowledged bitcoins as the legal tender, China prepares to formalize the relations with digital currency. Forecasting in economics and finances is a waste of time, but we will try to look into the prospects of electronic currency.
Only changes are unchanged.
The changes in the world affected a financial sphere as well as they affected different technological solutions and artificial intelligence. Many people expected it, but found themselves not ready for coming revolution. Bitcoins for finance is development of economics, but at the same time it’s a H-bomb. It became clear that with the advent of digital currency the monopolization of the printing-press is no longer obvious. Now absolutely everyone can be an issuer of currency in theory.
The best well-known and perspective currencies of the new generation are Ethereum and Bitcoin. Their concept is based upon special technology – blockchain. That excludes the idea of mediation in financial transactions. All the information about transactions is clear, it can’t be forged or changed due to complicated system of encryption. Ethereum has moved far ahead providing an advanced variant of that technology – “smart contracts” that allows to include into blockchain not only the Bitcoin encryption key but also any other information. “Smart contracts” are able to redeem the world from red tape. That digitally reliable method of data transmission ensures the safety of all information.
The emergence of digital currency gave rise to the liberalization of the heavily regulated and complex process of monetary circulation. There is a possibility of creating a supranational system by eliminating mediators, reducing costs and lack of transparency. This new form of financial relations is more adapted to constant changes, which can’t be avoided in the future. From this point of view the future of digital currencies is quite promising. Then why the contents of our wallets are rubles and not flash drives with bitcoins?
Darknet and financial consciousness.
This year in spring bitcoin rate took off. Other digital currencies also gave excellent results. That’s a new gold rush: a lot of people seriously engaged in mining, and even the summer significant fall of bitcoin rate couldn’t stop that madness. The rise of bitcoin’s popularity is also associated with the activities of Sergei Mavrodi, who after the benefaction of the CIS and Russia moved to Africa and Asia with his project MMM (financial pyramid “Mavrodi Mondial Moneybox“). He made all his operations in bitcoins, thus he took the most part of the market, creating a deficit of that cryptocurrency. In this state, the emerging bitcoin market is very prone to manipulation. Also, due to the initially high risks, this e-currency reacts more strongly to various rumors and news about its future.
One more very important problem of virtual money is its technical complexity. The number of digital currencies, updating of new versions of those currencies, new protocols for improving the efficiency of blockchain, all that are factors of high risks. Therefore, all governments and official financial organizations will limit e-currency and hinder from its growth, and that will naturally affect the future of all virtual money.
But the master nightmare of all financial and non-financial regulators are shady deals with drugs and arms in Darknet. They are the trump card in the reactionaries’ hands. At that moment, the conservatives’ and liberals’ issue remains open: is it possible the system to be self-organized with the protection of all beneficiaries and stakeholders, including the state, society, international institutions?
Hen or egg.
What is primary: bitcoin or blockchain? On the one hand the currency that works on blockchain technology makes the technology primary. On the other hand bitcoin is a collective pattern of an applied idea working on any technology. Bitcoin involves several technologies: decentralization, cryptography, replacement of control by algorithms, mathematics and etc.
The principal thing is that the changes are taking place. New technologies are emerging with a change in our thinking. There is an increasing need for political, financial and personal freedom, that generates simple, fast and understandable systems. From that point of view, digital currencies have a great future. After all, the idea based on such values must grow without fail.