THE VIABILITY OF CRYPTO CURRENCY

THE VIABILITY OF CRYPTOCURRENCY

Written by: Kyle Crutchley

The value of cryptocurrency lies not just in what it is, but what it can be.

To the untrained observer, cryptocurrency may be the latest fad, an unsustainable bubble built upon the wealth of fools. With a little experience and personal insight however, we can see that this view is not only overly simplistic, but plain wrong. This is not the view of an experience trader, but rather an intern with one day’s experience in the field of cryptocurrency.

Just the name cryptocurrency can lead to sneers of derision, particularly from those who see it as a speculative asset without any backing. Cryptos however, have their own unique strengths, which allow them to stand out from other, more traditional assets such as real estate, or stocks.

First of all, cryptos, and the success of any emerging cryptocurrency relies upon investors trusting the technology upon which they are based. A main criticism of cryptocurrencies is that people claim that you can not trust the technology that it is based on, that can any moment, an Mt.Gox moment will arrive and investors will be left penniless. Think about that claim, would investors choose to

involve themselves in a crypto if they were not confident of the blockchain technology it was based upon? If the emergence of many new successful cryptos tells us something, it’s that people believe in cryptocurrencies as a security.

Far from being a weakness of cryptocurrency, I believe that its decentralisation is a strength. Especially for a new currency, the fact many cryptos are decentralised prevents the abuse of currencies by certain entities, for instance by central banks in developing nations, or through political instability. The recent release of a ‘crypto’ in Venezuela may lead some to see cryptos as the purview of shysters, yet this ‘crypto’, if we can even call it that, is far from the norm. In the rest of the world however, Cryptos are fast becoming popular due in part to the potential for rapid growth, and compared to similar yield assets, the decentralisation of cryptos decreases the risk of failure, and allows it to maintain attractiveness compared to similar risky investments, while perhaps most importantly, allowing the fairer, more equitable distribution of resources, a feature that has become impossible when dealing with hard currencies and traditional assets.

Lastly, the value of cryptocurrencies lies not just in what it is, but what it can be. I was not convinced to begin with, but over time, albeit limited time, I have begun to see the potential cryptos offer, not just as an investment for today, but a means of exchange for tomorrow. There is not much difference between the infrastructure of a crypto like BTC, from INS. In the same way, cryptos can quickly lead to the integration of emerging economies, who would no longer have to deal in hard currency.

With the power of cryptos to integrate the global economies, and the attractiveness it has to investors around the world, there is no reason why cryptos can not emerge as an investment-grade asset rivalling traditional assets, with the means to change the world for the better through its decentralised blockchain features and its more equitable share of resources.