Updated: Sep 1, 2018
I have been an investor in cryptocurrencies for about 6 months now and my decision to get involved with cryptocurrencies to begin with, was, well to be honest greed. At the time I was only aware of Bitcoin and Ethereum but once I took the first step I began to learn the vastness of the cryptocurrency space. I almost immediately became obsessed with learning as much as I could as fast as I could and what I have learned so far has surprised me. All of the hundreds and hundreds of cryptocurrencies that you see are just what is on the surface. Sure you can make a lot of money if you invest in the right one, which is what first caught my attention but once you dig deeper you find that it is the underlying technology, the blockchain, where the magic is, it is the heart of the crypto space. I have to be honest I have just barely scratched the surface learning about blockchain technology but what I see is something that I believe will change our world.
Blockchain technology itself is nothing new the first work on a cryptographically secured chain of blocks was described in 1991 by Stuart Haber and W. Scott Stornetta. The first distributed blockchain was then conceptualized by Satoshi Nakamoto in 2008 and then implemented the following year as a core component of the digital currency Bitcoin. What makes this technology really special is that it is decentralized, it is a global network of computers that jointly manage the database so there is not one central authority. What this allows is person to person (or peer to peer) transactions, cutting out the middleman, the banks or other financial institutions that in the past were needed to facilitate or authorize these transactions. This peer to peer feature allows people to be their own bank, to be truly in control of their own money. Bitcoin also allows the estimated 2 billion people worldwide who do not have bank accounts or access to financial institutions to essentially become their own bank via a cell phone or other device.
This all sounds really great, I mean who would have an issue with people having full control of their finances. Well, I can think of a few right off, governments, the big banks, and financial institutions. Bitcoin will be a serious threat to fiat currencies, we are seeing this now in places like Venezuela where rampant inflation has made their fiat currency almost worthless. There are people in Venezuela turning to mining Bitcoin just to feed their families. Bitcoin will also be popular in other countries where the populous does not trust their government or the stability of their fiat currency.
Bitcoin is also a serious threat to the revenue of the big banks, they are not just going to stand by and allow Bitcoin or any other cryptocurrency take market share from them. Just in the last few weeks, we have seen more instances where they continue to try and discredit Bitcoin and all cryptocurrencies in general. Perhaps the most outspoken lately has been JP Morgan, CEO Jamie Dimon, He's called Bitcoin a fraud, he also said it is a "novelty" and said cryptocurrencies are "worth nothing." Another thing he said was "Creating money out of thin air without government backing is very different from money with government backing." Ya think! that's the point, Jamie! Listening to him you would think he doesn't have a clue about what the purpose of a decentralized currency is. But as I have said before I believe he knows exactly what he is saying, he will say whatever is needed no matter how misleading to discredit cryptocurrencies. Actually Jamie Dimon calling Bitcoin a fraud is kind of amusing, the amusing thing is that JPMorgan Chase the bank that Jamie Dimon sits at the helm of has itself been accused of multiple cases of fraudulent behavior. In fact in 2013 JPMorgan Chase agreed to pay a 13 billion dollar fine (a record at the time) to federal and state authorities in order to settle claims that it misled investors in the years leading up to the financial crisis (see link below for more info)
I believe the attacks by the big banks are only going to get worse, the more popular cryptocurrencies become we will see much more of this and worse. I believe all of us involved in cryptocurrencies need to be prepared for what is yet to come. Besides government regulation (some of which I believe will be good), those in power will use their influence to pressure government officials to do even more, possibly even going as far as outright bans. We are already seeing bans in China, as well as other countries.
The point of this article is not to scare anyone but to make others aware of what I believe we are facing. In the end, long term I don't believe the growth of cryptocurrencies can be stopped but that will not prevent those who do not want to relinquish their power from trying. In my opinion, this fight we are facing is for our freedom, the freedom to control our own money. It is also about the freedom to decide for yourself whether or not you want to participate in a government controlled and manipulated financial system, or be part of a global decentralized system such as Bitcoin.
Until next time,
For addition information on cryptocurrencies visit my web site: www.bigskycrypto.com