Cryptocurrency has become a popular and global phenomenon in the past few years. However, today people need to learn a lot about this emerging technology. Several worries and concerns swirl around technology and its potential to disrupt conventional financial systems says Brian Colombana.
The reality about the trustless systems
The Bitcoin supporters and various other cryptocurrencies claim that such financial platforms are trustless systems. It means it’s not directly associated to any government, body or nation-state. And they would debate if cryptocurrency is higher to the conventional physical currencies as it’s not dependent on the federal government in the United States.
According to Brian Colombana, irrespective of whether you opine it to be a bad or good things, it’s not completely precise. The crypto coins aren’t actually trustless at all. It is still dependent on the underlying structure empowering the cryptocurrencies such as Bitcoin, most being situated in China. The Chinese government can theoretically change the crypto coins at a basic level, enforcing its will upon data miners who run it.
Libra – Not everything is cracked up
The contribution of Facebook to the crypto world, Libra, got hype in certain corners as the answer to a mix of financial problems. Also, the platform got designe to enable global payments and remove pointless transaction fees and costs.
This objective is admirable. However, experts believe that the process has errors. Many don’t consider coming up with one more cryptocurrency as the correct solution for reducing the payment transaction and they don’t agree with the attempts that Facebook is making to circumvent conventional banking systems completely.
Hence, the experts argue that an improve approach might have been correct. For Facebook to develop a bank that can function as the main financial institution for the users. The company can concentrate on developing banking systems personalized to every region or nation, addressing the regulatory demands as well as bringing the costs down. And the moment it gets establish and the public trust built, it will seem practical to link each one for developing a global network.
Stablecoin – Is this the answer?
The stablecoins have become popular as a way for supporting cryptocurrency. With the assets that have value, in a similar way the United States currency can get use on a gold standard. The assets can be other commodities and currencies, virtually anything.
According to Brian Colombana, there are some problems with this. It can recreate a system which is already in existence. The other issue is that it can make it simpler for others to create a fraud. As its not simple to monitor and audit as the conventional currencies. The experts also spoke about the potent applications for cryptocurrency. For example, the people in countries with weak currencies can be better. By investing in Bitcoin than purchasing the local bonds and stocks.
The future of cryptocurrency has several analysis and estimates. The proponents think it has endless potential. On the other hand, critics think it has risks. However, some people have a skeptical view, but they agree that there are specific applications for which cryptocurrency is the best solution.