despite the different opinions of regulators
on matters such as cryptocurrencies. We
are willing to consider the merits and
risks of blockchain technology and other
distributed ledgers.’
As we begin to see early adopters
benefiting from blockchain technology,
more and more incumbent institutions
will get on board and embrace the new
technology paradigm and disrupt from
within.
Sonya Kuhnel, founder and
MD of the Blockchain
Academy in South Africa
Glacier Research comment
Sources:
1. https://www.
forbes.com/sites/
bernardmarr/2017/08/10/
practical-examples-of-
how-blockchains-are-
used-in-banking-and-
the-financial-services-
sector/#5c1ab0b81a11
2. https://www.pwc.com/
us/en/financial-services/
research-institute/
blockchain.html
3. https://www.ibm.com/
blockchain/financial-
services/
4. http://blog.deloitte.
com.ng/5-blockchain-
use-cases-in-financial-
services/
Blockchain technology and the accompanying cryptocurrency market are novel
and exciting technologies that have certainly attracted a lot of media attention this
year, particularly within the financial industry. Subsequently, a frenzy of ‘investment
buying behaviour’ has seen the price of many cryptocurrencies, bitcoin in particular,
experience exponential gains over the past few months.
Critics of cryptocurrency and the speculative buying behaviour that accompanies
it have warned that the sharp rally experienced is reminiscent of a market bubble. In
response to such critics, proponents of the technology have argued that given the
technology’s infancy and the ever-growing list of applications for which it can be
used, it’s short-sighted to rule that this is just another bubble and that the industry
will collapse. Just like other modern-day technologies such as the PC, cellphone,
internet and social media, blockchain technology displays signs of tangibly
revolutionising the way individuals and institutions could potentially interact and
relate going forward.
But whichever side of the fence one may lean toward, there are important things
to keep in mind when considering cryptocurrency as an alternative ‘asset class’. The
price of a cryptocurrency (bitcoin) can unpredictably increase or decrease over a
short period of time due to its young economy, novel nature, and sometimes illiquid
markets.
Lastly, dealing in virtual currencies is at the user’s own risk with no recourse to
South African authorities. Since it is unregulated, there’s absolutely no investor
protection and any losses incurred are purely the responsibility of the holder.