As the majority of you will be aware, the world is becoming more and more digital. This process of global digitalisation is taking place across many sectors, including (but not limited to) the financial sector, the transport sector, and even the real estate sector. For many people, the process of digitalisation is beneficial, insofar as it allows them to become more connected and engaged with the world. Some people, on the hand, are far more skeptical about digitalisation. Regardless of your stance on the phenomenon, it is clear that it is not going to stop anytime soon. As such, it is important to be aware of it. In this blog, we’ll briefly talk about the digitalisation of currencies in the form of cryptocurrencies.
Cryptocurrency seems to have taken the world by storm. There is a long list of reasons for its sudden emergence; it is fast and global, it’s permissionless and the fees are low (for now..). Essentially, a cryptocurrency is a digital asset which is designed to be used as a medium of exchange. The most famous example is Bitcoin; the first decentralized currency, founded by Satoshi Nakamoto. Bitcoin transactions are recorded in a “blockchain”; a software that allows transaction details to be recorded, for all accounts. The transactions then go through a process called mining; this allows them to be verified, recorded and completed. Miners use a special mathematical software to verify the transaction, and in return they are issued with a number of bitcoins.
So, what’s the point in learning about bitcoins and cryptocurrency? Well, according to Thomas Frey – a leading futurist – “cryptocurrencies are going to displace roughly 25% of national currencies. They’re just so much more efficient”. If such statistics are true then we may be able to agree with Dr James Canton when he says “I’d say you can expect an exponential increase of new investment vehicles to come from cryptofinance.” Cryptocurrencies are on the rise, and leading futurists estimate that they will play a vital role in future trading. Therefore, to not pay attention to them would be somewhat idiotic. We ought to make ourselves aware of the systems under which they function so that when the time comes we are fully prepared to tackle the surge of the cryptocurrency.