"What is your opinion of Bitcoin as a currency for the future?"
Top answer provided by:
Thank you James for your question.
While I am not authorised or even qualified to recommend Cryptocurrency, I will do my best to provide you with some guidance.
The real story behind Bitcoin is the Blockchain, the registry system and technology that Bitcoin was built on. And Bitcoin along with a multitude of cryptocurrency peers such Ethereum received much attention as its unit price took us on wild ride in 2017.
The interest has subsided Bitcoin is still proving to be volatile roughly doubling in $A terms since March 2020.
Bitcoin definitely exceeded expectations when the price neared its peak in 2017 and while nobody really knows what the future holds for bitcoin, we do know that it is a limited commodity and it can be traded between two people who agree on the exchange value.
My opinion is that the blockchain technology (that cryptocurrencies such as Bitcoin operate on) could very well have a big future as transactions do not need to be verified and data cannot be manipulated which eliminates fraud and duplication. It is a highly efficient and effective technology. Also, the applications for this technology are far broader than currency, any registry function can exist on the Blockchain.
For it to become the currency of the future some of the hurdles it needs to overcome are
1) Who (or what organisation) is accountable if something stuffs up? Computer errors on platforms have lost millions of dollars of people’s Bitcoin in the past.
2) Who makes decisions in the event that the technology needs to be updated or modified? If it is to be used for transactions, there are multiple facets of the technology that may need to be changed to make it practical for regular use.
3) How will security be upheld? While users can be traced through their alphanumeric address, there are no names linked to these addresses that can create security issues and leaves it open to serious fraud and theft. This is one of the reasons that unfortunately cryptocurrency is so popular in the Black Market. This also raises the issue as to how governments will tax gains and transactions.
I personally know people that have made thousands from Bitcoin but also some that have lost even more so it is definitely a topic that needs to be approached with caution. Empirically cash (our medium of exchange) is seen as a ‘risk-free’ asset, clearly, the history of Bitcoin and its ilk d not demonstrate this.
It appears logical that if the world or parts of it are to adopt cryptocurrency on the blockchain then it will need to have the characteristics of cash as opposed to a speculative commodity. Worth noting that in 1969 the International Monetary Fund introduced Special Drawing Rights (SDR) which provided a notional mechanism for settlement of account between member countries, so arguably there already is a proxy for a global currency, it is just not on the blockchain.
is to use cryptocurrency more broadly then it will need to act a lot more like cash than a speculative instrument.
There are many options out there and the fact that no one really knows the answers is that one needs to be educated and understand all the risks before entering the crypto jungle.
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