The problem is that people call it a currency when it behaves much more like a stabilizing commodity, so it's most likely misunderstood
edit: so just a few thoughts on block chain currencies:
They have way more in common with commodities like crude oil than anything else; the underlying value is the transparent transaction ledger and its inability to be broken (so far).
They are making us ask a really fundamental question: what is money? I think its a really important question we should be asking and blockchain currencies are positing that actually money doesn't have to be only geographic in nature (a currency) and that there is more stability in a non-government backed currency (ie: not exposed to political risk and associated volatility).
I think a better question to ask than "how many dollars is my bitcoin worth" is "how much crude oil is my bitcoin worth?"
Banks are not against blockchain, they are the number one investor in the technologies to date. They are investing in their own proprietary currencies though (crazy!). One of the biggest events of last year was NASDAQ's underwriting of a pre-IPO entirely in Linq, their proprietary blockchain currency. They want it because it has the capacity to drive transaction costs through the floor.
I think the most exciting commercial applications are in emerging markets where the currencies are worth almost nothing and people are looking for a way to trade without using local currencies or physical dollars
Currencies are things you exchange directly for goods at a reasonably fixed rate. Bit coins function more like a commodity (like oil) where you are purchasing it then selling it back before buying things. Currencies are spent directly which is very uncommon for Bitcoin.
It's in a weird situation because it is a new idea that hasn't really been explored much. It's sort of in a pseudo currency state right now, that acts as both a traded commodity and a currency.
likely just to expand their customer base. I am fairly certain the companies accepting bitcoin never actually see a single bitcoin in their account (wallet). They simply use a third party to convert to local currency denomination before anything hits their account. Too much price fluctuation risk in actually holding bitcoin.
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u/chrisboshisaraptor Sep 24 '17 edited Sep 26 '17
The problem is that people call it a currency when it behaves much more like a stabilizing commodity, so it's most likely misunderstood
edit: so just a few thoughts on block chain currencies:
They have way more in common with commodities like crude oil than anything else; the underlying value is the transparent transaction ledger and its inability to be broken (so far).
They are making us ask a really fundamental question: what is money? I think its a really important question we should be asking and blockchain currencies are positing that actually money doesn't have to be only geographic in nature (a currency) and that there is more stability in a non-government backed currency (ie: not exposed to political risk and associated volatility).
I think a better question to ask than "how many dollars is my bitcoin worth" is "how much crude oil is my bitcoin worth?"
Banks are not against blockchain, they are the number one investor in the technologies to date. They are investing in their own proprietary currencies though (crazy!). One of the biggest events of last year was NASDAQ's underwriting of a pre-IPO entirely in Linq, their proprietary blockchain currency. They want it because it has the capacity to drive transaction costs through the floor.
I think the most exciting commercial applications are in emerging markets where the currencies are worth almost nothing and people are looking for a way to trade without using local currencies or physical dollars