Why Cryptocurrency Needn’t Be So Cryptic

Trends in investment come and go as regularly as the seasons. Over the last couple of years, one has managed to gain some traction with the public. From national television ads promising a stable financial future for you and your family to promotional videos on social media tempting amateur investors with the chance to make millions overnight – it’s hard to distinguish genuine investment opportunities from the latest hyped-up trend.

Cryptocurrency – A New Frontier?

Cryptocurrency represents a wild new frontier of investing for professionals and amateurs alike – where even those with meager personal savings are targeted to treat their savings as capital. Decentralized cryptocurrencies such as blockchain and bitcoin have empowered amateur investors by allowing them to take risks that are beyond restriction and confiscation, central banks or national governments. Playing the markets is risky business but the exotic frontier of cryptocurrencies can be as treacherous to navigate as it is exciting for novice investors looking to take a gamble.

Criminals operate in this lawless frontier too, waiting for the naïve to make a mistake – give their bank details away, reveal personal information, or even bankroll some nefarious scheme .“We’re starting to see more organization in the space with professional gangs bankrolling computer scientists,” says CipherTrace CEO Dave Jevans, who was commenting on news that 1 billion dollars were stolen last year from genuine investors by professional criminals.

Can Cryptocurrency Replace Government-Issued Money?

As cryptocurrency is a type of digital/virtual currency that doesn’t need to exist in a physical form to have value it is extremely vulnerable to attacks from hackers and viruses. No wonder then that due to the high risks involved in such a wildly speculative enterprise, a recent public lecture entitled “Bitcoin is poorly suited to the purpose of becoming any nation’s main medium of exchange” went viral earlier this summer. Hosted by the Soho Forum in New York City, the topic of a public debate centered on whether Bitcoin (one of more popular ‘brands’ of cryptocurrency) could replace government-issued money. That such a possible future is being seriously considered by economists, government policy-makers and financial institutions might give investors’ confidence in the technology as an alternative to fiat currency.

However, one important decision-maker in the United States’ domestic policy, Securities and Exchange Commission Chairman Jay Clayton, has on numerous occasions downplayed this possibility, expressing concerns over security and investor protection. He has cited the lack of market surveillance and questions the safety protection of storing these assets as major roadblocks before he would feel comfortable green-lighting a blockchain structured exchange-traded fund, which can then be listed on ‘traditional ‘stock exchanges.

Regulation To Slow Down The Market

Like most new wild frontiers in business though it will be regulation and bureaucracy that will slow down the market’s rapid expansion and high valuation while also diminishing chances of cryptocurrency being adopted by any national government. As the speculation recedes and cold, hard reality rears its ugly head, investors and entrepreneurs may decide to go elsewhere – perhaps seeking out the newest emerging tech or trendy FinTech innovations that promise overnight riches as cryptos once did. Despite this inevitable flattening out of interest, the technology behind cryptocurrency will be put to countless other uses such recording health data for patients, preventing voter fraud, and providing charities with the ability to tacking refugee numbers while guaranteeing their right to privacy and anonymity. These avenues will probably be the future legacy of the technology while the current amateur investor interest in cryptocurrencies fades away to be replaced by the latest Next Big Thing.

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