RE: “Bitcoin has the glitter but it is not gold” (The New Times, December 5).
Bitcoin is here to stay and it will become the dominant currency for the poor. It’s very true that the financial monsters are all scared to lose out. The volatility of Bitcoin is a healthy thing as it allows future stability. The notion that Bitcoin is for the underworld is another form of propaganda being peddled by the old financial institutions. The “bubble” is very likely to be caused by capitalist speculators that have just woken up; however, that bubble will be short lived.
Hate or love Venezuela, but the country has recently taken a bold move to introduce crypto currency (the “petro”) in oil trade.
Bitcoin is like how e-commerce was seen in its early days—banks and multinational companies were saying the same things, but those that understand crypto-currency and its development, the future is bright.
Cryptocurrency is the next big thing and sooner or later central banks have to revise their own policies to adapt to this new currency. Regions are integrating, and the way this currency reduces the bureaucracies among the financial institutions is of paramount to consumers. And remember consumer-to-consumer (C2C) technologies are the next on agenda on the 21st innovations.
Cathy, the most innovative part of cryptocurrencies is the DLT which allows peer-to-peer transactions without need for an intermediary to settle transactions—if central banks decide to issue their own cryptocurrencies, they will also adopt the technology (DLT) which will remove the complexities you mentioned.
Obviously for central banks, the need is not to lose control of monetary authority, so how such a cryptocurrency would be managed is an ongoing debate and area of research. For instance, should individuals be allowed to have accounts at the central bank since DLT can facilitate this? All will depend on what central banks judge fit.