Monday, November 30, 2020
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Cryptocurrencies: The Future Behind the Bubble

“If you are stupid enough to buy bitcoin, you will pay for it”, said the president of JP Morgan, Jamie Dimon in 2017. At that time, the largest cryptocurrency in the world was immersed in a dizzying escalation that attracted all eyes from the investment world and also from outside it, as a growing number of people began to see so little in this universe known a guarantee of profit. Is there a cryptocurrency bubble?

The price collapse that began a few months later seemed to prove the prestigious banker right, who had branded digital currencies “fraud”. In less than a year, bitcoin saw 80% of its price disappear and the cryptocurrency market hit more than 700,000 million dollars. The bubble had punctured. Cryptocurrencies … have they died? Is Bitcoin changing business?

Dimon himself would be in charge of clearing that doubt. Last year, his bank surprised by becoming the first American entity to create its own cryptocurrency, the JPM Coin, to manage payments through blockchain technology. And the truth is that the interest in digital currencies of the largest bank in the world by market value is by no means an exception in the financial world.

Fidelity Investments, one of the largest management companies in the world, has several projects open around cryptocurrencies and plans to immediately launch a trading service for these assets for its institutional clients, as published by Bloomberg. The collapse of prices has not meant, far from it, the abandonment of digital currencies.

Good startups have been set up, technology has improved a lot, the use of crypto for all types of users is being facilitated by means of new more usable wallets or exchanges, and we have even seen large companies bet on cryptocurrencies. This does not suggest there is a cryptocurrency bubble.

The first of these characteristics means that the client of the platform contributes to its financing and is, therefore, the owner, which allows them to enjoy services without commissions, have a voice in strategic decisions and capture part of the income generated for the platform when, for example, you purchase a financial product from a third party.

Regarding the second, it’s possible for the user to operate through the platform indistinctly with his funds in dollars or digital currencies, a service that translates, for example, in that thanks to its collaboration with Visa. They can make card payments in cryptocurrencies, something in which they define themselves as pioneers in US and Europe.

It seems that blockchain technology with the possibility of transmitting value in a decentralized way, without an agent being involved, will generate a new type of economy that will coexist with the previous one, based on these decentralized models, which will have currencies other than the dollar.The uncertainties generated by the collapse of prices have weighed down the financing of projects

In fact, the uncertainties generated by the collapse of prices since the beginning of 2018 have been a drag on project financing, but they have not stopped the work of those who bet because blockchain will mean a profound transformation in the way of doing business.

The truth is that, regardless of the ups and downs of digital currencies, few voices in the business world have dared to question the potential of blockchain technology, considered the basis of a future innovation as relevant, at least, as the one that has meant the Internet in recent decades, with the capacity to revolutionize almost any area of ​​business. This is evidenced by the growing popularity of bitcoin as a trading commodity and the emergence of trading tools and related reviews, such as this Bitcoin Code review.

With its block system, which allows all types of transactions between individuals to be carried out reliably without the need for an intermediary to guarantee the operation, it could force a rethinking of a good part of the business logic.

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