Why should people care about cryptocurrency?

This morning I saw this headline on Twitter: Venezuela Announces New ‘Petro Gold’ Cryptocurrency, One Day After Launching the Petro (Venezuela's oil-backed cryptocurrency). Venezuela is not the only country which is taking a serious look at cryptocurrency at a national level. Why is there such growing interested? Why should people care and take it seriously?

Co-founded in 2012 by Chris Larsen and Jed McCaleb, the company OneCoin came into existence. The company was renamed to Ripple Labs in 2015. When Ripple’s native cryptocurrency (XRP) reached a value of USD 3.84 during January 2018, Chris Larsen was considered more wealthy than the Google, Oracle and Facebook founders.

Venezuela, Russia, Brazil, China, India and Sweden are currently investigating the potential of creating cryptocurrencies at a national level. A few prominent countries which already approve of the use of cryptocurrencies for the purchase of good and services include Japan, Holland, Germany and Canada (as far as I am aware).

Toward the end of 2017 Wall Street entered into the cryptocurrency space when CME (Chicago Mercantile Exchange) and CBOE (Chicago Board Options Exchange) started offering futures contracts to institutional investors. This allowed for individuals, corporations and government entities to take positions on the price of Bitcoin. Many in the cryptocurrency space saw this a very large and public endorsement of cryptocurrencies and an act which will lead to very large investments in cryptocurrencies in the future.

The Christchurch, New Zealand based cryptocurrency exchange Cryptopia has a daily trading volume which exceeds the daily trading volume of the New Zealand Stock Exchange. During December 2017 the global average daily trading volume of cryptocurrencies equalled the volume of trading on the New York Stock Exchange at a value of around USD 50 billion over a 24 hour period.

Cryptocurrencies have seen phenomenal growth during 2017 with the top five currencies being Ripple, Stellar, NEM, Bitshares and Ardor. In terms of market capitalisation growth over 2017 Ripple grew by 34,590%, Stellar by 33,630%, NEM by 25,427%, Bitshares by 15,879% and Ardor by 15,215%.

Aside from phenomenal growth and widespread adoption, cryptocurrencies do have a number of interesting use-cases. Bitcoin makes less reliance on central banks possible, and allows for decentralised peer-to-peer transactions and value storage. Ethereum have created an all-in-one, one-stop-shop platform for the creation of smart contracts which self-execute and for the building for decentralised applications. While Bitcoin is not truly anonymous, Monero allows for truly anonymous, private and fungible digital money, which is very valuable for people who may live under oppressive regimes.

There are however still barriers which exist. Cryptocurrencies are still under development, many of the underlying technologies are still experimental. Unfortunately a lack of oversight, regulation and complex technologies have led to a number of attempts at defrauding investors. Converting traditional currency to cryptocurrency is also difficult in some cases since many banks do not allow their accounts to be used for such transactions, because banks often do not understand the underlying technology and there is still a lot of uncertainty about how governments and regulators will legislate. Novice users may also be prone to make small mistakes during transactions and in the case of cryptocurrency, small mistakes can lead to a permanent loss of money.

Despite the risks, now is a fantastic time to be involved in the fast growing and exciting cryptocurrency space. Technology and computing power specifically has evolved to the point where cryptocurrency technology is possible, and individuals with the necessary skills to build these solutions have emerged. Wallet providers, exchanges and ancillary service providers are all working hard toward making it easier and safer for people to get involved. At government level acceptance is also growing as seen during the recent United States Senate Banking Committee testimonies, where the SEC (Securities Exchange Commision) and the CFTC (Commodity Futures Trading Commision) recommended that the government should support and allow for cryptocurrency innovation and also to take steps to protect investors.

What do you think? Is cryptocurrency the future of money?