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Bitcoins / Breaking News

What if Bitcoin is really something else?

Cryptocurrencies are a new phenomenon, still emerging on to the markets and into our minds. Our understanding of them is not complete, and opinion as a result remains split. Traditional moneymen such as Jamie Dimon denounce Bitcoin and its fellows as a fraud, a Ponzi scheme – as if the conventional financial world was ever innocent of that label.

But what if Bitcoin has a value not just as a competing currency but as something else altogether? What if cryptocurrencies represent, in fact, an entirely new asset class?

What does this mean? If you are beginning to feel we are nearing the end of two centuries of traditional capital formation, you might be able to see that the new technology of Bitcoin can generate value in a very different manner than credit.

On October 16 Alan Ludwin of Chain.com penned a calm riposte to Jamie Dimon and pointed out that Bitcoin is here to stay. While admitting that the activity around blockchain assets was “overheated and irrationally exuberant”, he pointed out that the extremes are exaggerated on both sides – old finances won’t vanish but neither will cryptocurrencies. And the latter might just be an entirely new kind of asset, one that enables “decentralised applications”.

What this means is Bitcoin has nothing to do with dollars or sterling or any other currency – because it’s not a currency! Instead, Ludwin reasons that it’s an asset because it does what other asset classes do: “allocate resources to a specific form of organisation” – just as shares serve companies and mortgages serve home-buyers.

The difference is that you no longer need what he terms a trusted central party. Crypto is often slower and more expensive than central services. But its USP is its decentralisation. It can’t be stopped or controlled. That is real value, the killer app of cryptos. Just don’t call them currencies!

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Rheace is our social media expert for Crypto Daily™, and brings you all of the information you need via our social media accounts. He is a huge crypto enthusiast, who delves deep unto the crypto world. He is currently writing pieces for Crypto Daily™, using his knowledge and interest to bring you great pieces of news that is of interest to our readers. He is hugely experienced when it comes to social media, and has worked in the field for many years.