Banner Default Image
< Back to all insights

Cryptocurrency: The End of the World as we Know it.

Author: Ian Bailey

Published date: 2018/02

Ijb Article Pic

The idea of decentralized currency is sweet, sweet music to the ears of the banker bashing crew. Finally, Peter can pay Pauline on the other side of the World without the evil pin striped suits charging fees that are still based on pre-internet wire transaction costs and are only in place to reinforce our feelings that the banks are evil, World-domineering money sponges.

The promises of an irrefutable record of transaction through blockchain technology and the security of millions of computer processors with billions of verification processes taking place all sound like the evolution and inevitable adoption of cryptocurrencies can only be a hugely positive thing.

If Peter has X in his account and Pauline has Y in her account; then Peter transfers Z to Pauline it leaves Peter with X-Z and Pauline with Y+Z and no big fat greedy B in the middle taking their share. Beautiful.

My question is this; what the eff is going on at the moment with all the new ‘currencies’ that are being ICO’d? This isn’t a rhetorical question, I’m genuinely hoping for an answer.

Anyone who has looked deeper into Cryptocurrencies than just Bitcoin will be aware that there are a good few different coins/tokens available. As of January 2018 there are over 1384 internet based cryptocurrencies available and this number is growing each day. Given that there are only 180 ye olde money currencies (Travelex) and a lot less than that are available as FX trading pairs, where the heck is all of this going?

Have we just developed a new asset class for us to trade on? Are any of these new coins/tokens ever going to actually be adopted and take over from the money we know today? I know a good few people that have made a tidy profit from investing in a coin, watching it go up based on… well… I’m not really sure, and then cashing out. I’ve done it myself! But is this just some sort of sub-prime mortgage trading con for the masses?

If any of these coins are actually adopted, then what? Peter has a wallet with some Bitcoin and Ethereum in, Pauline has a wallet with some Cardano and Ripple in and both of them want to buy something that costs Verge. Then what? Will they have to go through some sort of centralized exchange that wears a pin striped suit and charges a fee?

There seems Universal agreement that the Cryptocurrency trading that’s happening at the moment is a bubble, and we all know what happens to them. The DotCom bubble burst with a market capitalisation of around $30trillion and that was pretty much just North America. The Cryptocurrency bubble (Crubble?!) is truly Global and at time of writing has a market cap of $497billion ( so if it’s possible to compare the two, there’s a good way to go yet. 

I have no idea how this is going to pan out and I’d love to hear some theories – In the meantime, let’s HODL!