Bitcoin Has A Serious Problem, And It's Not What You Think!
Bitcoin enthusiasts have often portrayed the digital currency as the one with special powers that will heal our global financial system. Our financial ecosystem is burdened with huge debt with the world's largest economy China having a debt to GDP ratio of more than 250%. Nations such as Greece are on the brink of Grexit as they fail to service their national debt. The Bitcoin community asserts that Bitcoin could prove to be potentially reformative in this domain. However, this might not be all true since Bitcoin does not completely eliminate the debt from the system. Sorry to break it to....
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We have a problem. There is a problem with cryptocurrency, How do we police crypto? A big problem, and that problem is that many members of the general public see it as just another scam. Why do they believe this? Well, the fiasco at Mt Gox is one reason, the well publicised losses at Fortress are another, Flexcoin and Poloniex are just two more and then there are the cryptocoins they can buy on sites such as eBay, completing the transaction just days before the value drops and yet another pump and dump scheme reaches its climax. Crypto is certainly getting bad press and to be fair it does....
To actually solve the problem of receiving funds without having secured liquidity from someone else's node requires protocol-level changes.
The framework from which we evaluate the asset must take into account the problem that it solves.
Image problem for Bitcoin? Bitcoin has an image problem! A problem of its own making and it's a bad image, one that, to some extent, it deserves. The cryptocurrency Bitcoin has gone from a value of cents to being worth over $1,000, and in less than five years. It has now dropped back to less than $500 and, here is the thing, it's not the first time the currency has done this. In 2011, Bitcoin went from 30 cents to $32 before slipping back to $2. People remember the drop because bad news sells papers and a drop of $30 or almost 94% is a great headline, frightening, isn't it. If the currency....
There are many reasons to be excited about bitcoin: it could enable totally new business and technology models; it resembles the internet in the early '90s in the sense that it is a network that no-one owns and everyone can contribute to; it could revolutionise legal concepts of ownership; it could disrupt the payments industry; it could even become a tax haven. It could also flop. In an earlier post, I described the thinking behind my first angel investment in the digital currency space: CoinDesk. In this post, I discuss what first got me excited about bitcoin - the solution to the....