Hello Monaco magazine Winter 2018 - issue HM02 | Page 58
INVESTORY
ENG
R
Internet of values
emember the beginning of the Internet?
First it snuck up on us, then involved and
consumed us, then raced past us. The digi-
tal currency revolution is proving to be just
like that — an unstoppable wave — full of
hype and speculation, but also genuine,
fundamental change.
The new digital technology known as «Blockchain» stands
at the origins of the currency revolution. In fact, Blockchain
is the system protocol representing a brilliant method of
creation of a reliable digital record protected from un-
authorized access, which cannot be changed or counter-
feited, but transferred quickly and easily. Blockchains are
stored simultaneously on
the computers of millions
of users, which makes it al-
most impossible to fake data
or damage it.
Bitcoin, the original block-
chain currency, is a chame-
leon with many faces. At the
beginning it was a lone wolf,
but soon Litecoin, Etherium
and a vast number of other
digital currencies joined it.
These «coins» are known as
«crypto-currencies», creat-
© depositphotos.com
ed, bought and sold using
Blockchain technology, and
causing quite a commotion in the finance world. So what,
you might ask, is wrong with good old paper money? Isn’t
physical tender more secure? Let’s figure it out! Without banks, without governments, without interme-
diaries! This is the power of Blockchain.
The problem many people see with physical currency is
that governments print money and devalue their currency,
in turn devaluing people’s savings, and allowing banks to
operate as a «big brother», using their hard-earned money
and charging them handsomely for the privilege. Justified or
not, there is widespread distrust and a populist wave against
this common practice.
And so Blockchain came on the scene with Bitcoin, a digi-
tal currency designed to compete with the banks, offer-
ing instant transactions, no holding period, no charge-
backs (merchandisers will like this), no account freezes,
lower or even zero inter-
national wire transfer fees,
no minimum balances, no
maximum balances, and
global access. Your «wal-
let» is always open — no
waiting for business hours,
no waiting for an account
to be approved, accounts
are opened easily based on
email, and no traditional
bank account is necessary.
Block chain technology
runs a completely egali-
tarian platform, available
to anyone with an Internet
connection. It doesn’t require a printing press, a monetary
fund, government-backed insurance and therefore, no hy-
perinflation or bank bailouts.
The power of Bitcoin Bankers are WORRIED
The financial system began in Florence, Italy, during the
Renaissance. The Medici family became intermediaries
between creditors who had a lot of money and borrowers
who needed it for travel and business development. But,
alas, there was no trust between them. In time, bankers
filled this gap and took a commission for the management
of finances and trust. Today, our present global economic
system is still based on mediation, and where there are a lot
of intermediaries, there is a lot of bureaucracy.
So how do crypto-currencies like Bitcoin differ? The ge-
nius and simplicity of this technology lies in eliminating
the intermediary, and at the same time, providing the in-
frastructure for strangers to do business with each other. All this circumventing of the establishment is causing trem-
ors in the financial bedrock of the first world. The heads of
the largest investment firms have begun to publically de-
nounce crypto-currency.
At an Investor Conference in New York this past September,
Jamie Dimon, CEO of JP Morgan Chase said: «It is a fraud.
It’s worse than tulip bulbs … it will be the emperor with no
clothes.» He then declared Bitcoin a «bubble».
Is Bitcoin a bubble? Certainly the price has gone crazy — but
Bitcoin has a long track record of crazy prices. Will it crash,
or even plateau? As we go to press, Bitcoin has broken an-
other record, with a price above 10500 USD and its Market
Cap exceeds 158 billion USD (on 29th of November 2017).
Nobody really knows what the
price will be when you read this.
HelloMonaco will be watching
— yet another new record, or
perhaps a crash!!!
Nevertheless the number of
merchants accepting Bitcoin
is growing steadily, but it’s
still extremely challenging
to use it as a main curren-
cy. Bitcoin is still not ready
Bitcoin will do to banks what email did
to the postal industry»
— Rick Falkvinge, founder of the Swedish
Pirate Party
56 / Hello Monaco – Winter 2018