Just when you thought it was a complicated fad that only the nerds would understand, cryptocurrency has become trendy…
If you want to buy a Bitcoin today you are looking at spending $US2,649 (R34,577), or thereabouts. This after experts predicted, in January 2017, that it ‘might’ go over the $1500 mark. It is closely followed by Ethereum, Ripple, Litecoin and Dash, all vying for market control and proving that perhaps that whole cryptocurrency thing wasn’t a nerd joke after all.
Today, Bitcoin remains the leader in both market dominance and price tag, but not necessarily in popularity. A recent survey by CoinDesk – the State of Blockchain Q1 2017 [https://www.coindesk.com/coindesk-releases-state-of-blockchain-q1-2017-research-report/] – found that sentiment towards Ethereum is almost three times more positive than for Bitcoin. This shift in attitude is likely driven by Bitcoin’s price tag, increasing centralisation and scalability. It is unlikely that the first and most famous form of cryptocurrency will lose its place any time soon, but it is finally facing fierce competition.
The driver of the price tag trend, especially around Bitcoin, is primarily demand. Cryptocurrency has moved from this vaguely terrifying concept that only a few people understand, to something that anyone can buy on a whim. Fancy spending a few Rand on a bit of a coin? There are companies dedicated to providing locals with inroads into the cryptocurrency market at all levels of wallet size and budget. Anyone with an internet connection and a mobile payment app can climb on board. In addition, another reason why cryptocurrency continues to gain traction is because it is being influenced by venture capital investments and the acceptance of the coins as a form of payment.
To make matters even more interesting, the Bitcoin protocol saw the activation of the Segregated Witness system on 01 August. It involves a User Activated Soft Fork and the SegWit2x project and terminology that few, except the very technical, understand. The impact of these changes on the Bitcoin and its market remains to be seen at the time of writing. How this will affect the other cryptocurrencies is also going to be worth watching as many of these, such as Ethereum and Litecoin, are looking for any chance to increase their hold on the market.
Of course, one of the leading trends in the shift towards cryptocurrency success is blockchain. The technology provides financial institutions with exceptional security and digital capabilities by dint of its design. This distributed ledger system will likely transform digital transactions in the future, but today it remains fledgling at best. Those who are experimenting with its potential are delivering some interesting solutions, however, and the big names of NASDAQ, Microsoft, Citigroup, IBM and Amazon have long since been paying and attention, and money, to the concept.