What does the financial industry make of blockchain tech?
The bitcoin bubble may yet burst, but blockchain technology looks to be here to stay.
Six international banks (British-based Barclays, the Swiss-based Credit Suisse, Canada’s Imperial Bank of Commerce, HSBC, MUFG, and State Street) are using blockchain technology to develop a Utility Settlement Coin (USC) – rumored to release in 2018.
USC is a cryptocurrency, just like bitcoin, and will be used for international transactions between banks.
USC will be used for financial transfers on a vast scale and won’t be available at a consumer level – at least, not unless you’re dealing with multi-million dollar transactions.
These transactions will be controlled by banks (who are subject to regulation), and they’ll lack the anonymity of bitcoin.
How is the value of a bitcoin determined?
Supply and demand drive the fluctuating valuation, controlled by a pre-determined scarcity. (I love a bit of pre-determined scarcity, don’t you?) The system has been designed to prevent more than 21 million bitcoin from ever existing.
It sounds a lot, but when you take into account that this is a global currency, and the value fluctuates, this embedded scarcity infers value.
New bitcoin are released daily, at the rate of around 25 coins per 10 minutes. Where the heck they come from is beyond me, to be honest (and perhaps a subject for another article).
But the flow will dry eventually, it has been prophesied, inferring higher value upon existing coins. There are currently believed to be around 16 million in use.
So someone has done well.
Where can I pay with bitcoin?
Amazingly, there are over 100,000 merchants around the world who accept bitcoin, including Microsoft, Expedia, and Newegg.
It’s rare to be able to spend bitcoin in physical stores, although the likes of Gyft – a mobile gift card app – provides a means of transferring the value of your digital currency into a form accepted by Amazon and Walmart.
Gyft gift cards are accepted in over 200 outlets in the US, such as Nike, Starbucks, and Target.
There are services, such as Shakepay, which convert your bitcoin into USD or Euros, for a fee.
What next?
When Amazon starts accepting Bitcoin (notice that that’s “when” rather than “if”), the value is set to increase even further, bringing usage into the mainstream.
It wasn’t that long ago that ordering a consumer item from the internet represented a massive risk, remember? Nobody thought that would catch on! So the future looks bright for Bitcoin. Yes, it could all collapse and devalue, but at the current rate of progress, it seems unlikely.
It might be too late to invest in in bitcoin and make millions, unless you already have hundreds of thousands of dollars. But now you know just enough about bitcoin to dip your toes in the water; don’t worry, it’s warm.
There a lot more information on BTC and Blockchain on the web. Also very nice Youtube Videos on everything. BUT, tomorrow, I will reveal how you can get involved, should you be interested, in the creation process of these Crypto Currencies and Leverage of the technology.....
May have a fulfilled Thursday
May have a fulfilled Thursday
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