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Bitcoin: Can it Become the Next Global Reserve Currency?

Bitcoin: Can it Become the Next Global Reserve Currency?

One of the most interesting trends surfacing in the crypto industry today is the increasing likelihood of Bitcoin emerging as the next global reserve currency – something that Bitcoin fundamentalists have been preaching for the last decade. 

With the combination of transparency and decentralized trust brought on by the blockchain, individuals and companies across the world have had the opportunity to participate in a free financial system since the emergence of Bitcoin some twelve years ago. 

Since the dawn of Blockchain, trust in this trustless system has been slowly rising with a diverse range of individuals, institutional investors, and even world governments investing in the technology and the various tokens in circulation today. One result of this has been the free flow of liquidity across borders in a remarkably revolutionary way – satisfying the ever-growing need for a more efficient global financial system. 

Mr. Yoon Kim is an accomplished and dynamic crypto analyst and strategist. He successfully built the TMT sector of Tremblant Capital and helped the company increase its AUM from $200 million to $5 billion in five years’ time. He then launched Vestry Capital, a global TMT equity fund as the head of which he served as an advisor and consultant to various hedge funds and blockchain projects.

With his 20 years of experience in investing and in the blockchain industry, Mr. Kim acutely understands these shifts in the global financial system. 

For that reason, one of the key topics of conversation during The New Normal of Blockchain & Cryptocurrency panel which AIKON organized in late October was “where the future lies for the USD and its long-term position as the world’s reserve currency”. 

Mr. Kim indicated that the USD losing some of its standing in the global financial system and possibly its status as the reserve currency is an inevitable product of blockchain’s accessibility and decentralization. 

“The timing is very auspicious […] it becomes rational and logical for a lot of people to push Bitcoin as a reserve currency” – Yoon Kim

 

 

As Mr. Kim has pointed out, the current financial system has been in place since World War II – 75 years now! On average, global financial systems have typically lasted for ~70-80 years each. We are, then, coming to the end of an era and can stand with bated breath awaiting the next financial revolution. 

Moreover, history has shown that significant global events often precede the breakdown of institutionalized financial systems. For the Pax Britannica, it was World War I. For the global financial system, we have today, it may very well be the impact of COVID-19 on the world economy. 

Having been a staple of the global economy, and considering the turmoil, the US has endured throughout 2020, USD is in serious danger of being dislodged from the position of power it has enjoyed over the last three-quarters of the 21st century. 

“The prevailing global systems of finance, trade [and] economic activity [have been around for] 70 to 80 years” – Yoon Kim

Given the amount of influence that US politics now has on the rest of the world, and being mindful that the level of engagement that USD (as a global reserve currency) will have on the rest of the world after the presidential election will probably never reach the levels from 40 – 50 years ago when it was at its peak. With the decrease in the level of engagement of the US with the world economy after the Soviet Union’s dissolution, what we see now are the effects of the politics that took 20 years to materialize. 

In that sense, Mr. Kim pointed out that it is very probable that the USD is about to be dethroned as the most important currency in the world. 

And while there are those who would like to see the Chinese RMB take its place, Mr. Kim considers this very unlikely to happen. For one, dethroning USD from the position of the global reserve currency would put a significant amount of pressure and responsibility on the Chinese financial system, responsibilities the country seems to be shunning presently. For instance, China has been accused of intentionally increasing demand which then leads to an increase in the prices of international commodities. 

Therefore, the question is what will supplant USD as the global reserve currency or at least become an alternate reserve currency running in parallel with USD?

Mr. Kim stated that Bitcoin seems to fit perfectly, especially taking into account the timing of its rise, as well as its ability to cross borders with very little effort. 

As political and economic relations between the US and China continue to collapse, it is becoming increasingly unlikely that either the USD or RMB will be viewed as a viable global reserve currency going forward. 

Bitcoin may prove to be the thing that both nations, as well as the rest of the world, decide they can live within the upcoming decades. 

“BTC […] will become a reserve currency that stands aside and is not controlled by a single nation” – Yoon Kim

While the Chinese government is actively restricting crypto trades, there is massive support within the government for cryptocurrencies and blockchain. This implies that they have a long-term strategy in place, where Bitcoin would be used to dislodge the USD as the global reserve currency. 

In the same way, we’re seeing the causality of the US global economics politics conducted in the past 20 years and its effect on the situation now, there is a good chance that 20 years from now we will have Bitcoin as the reserve currency of the world simply because it will not be controlled by anyone nation and its financial system. 

Should Mr. Kim’s predictions come to be realized, individual and corporate players in this new market that is quickly gaining momentum should be preparing for the shift.


The original article was originally published at Aikon.com


Featured Image Credits: Pixabay

Buying a House with Bitcoin?

Buying a House with Bitcoin?

Want to buy a house with Bitcoin? Here’s what you need to know.

With everyone going cryptocurrency crazy and the value of a single Bitcoin having skyrocketed as high as $19,000, there’s two things guaranteed when you work at a real estate startup:

1. Your parents and non-tech savvy family members will ask you to explain what the hell it is over and over again
2. Tech-savvy buyers who’ve mined their way to Bitcoin and other crypto riches will want to know if there is a way for them to buy a house using Bitcoin

For these questions, we say: “It’s like internet money, Mom.” and “Yes, it’s totally possible to buy a house with Bitcoin.”

Buy a House with Bitcoin

How buying a house with Bitcoin works

If you’re serious about purchasing a house with Bitcoin, there are a few factors that come into play:

The seller has to be down

First, you have to find a seller who is willing to accept Bitcoin as payment for the house. You can use our search to look for the words “Bitcoin” or “Ethereum” or whatever your cryptocurrency of choice happens to be to find potential property matches.

Once you have an accepted offer, the title and escrow companies have to agree to handle the transaction

Even if you are able to find a seller that’s willing to accept your offer in Bitcoin, it can be tricky to find title insurance and escrow companies who feel comfortable handling virtual currency transactions. To take on your home purchase, they may require you to cash out your Bitcoin so that your transaction can be treated more like a traditional house purchase.

This article was previously published on OpenListings.com

Bitcoin: Institutional Investors Using OTC Markets

Bitcoin: Institutional Investors Using OTC Markets

Institutional investors are getting into the Bitcoin market via OTC trading platforms. Currently, the OTC trading market is said to be over two times the size of regulated exchanges with some desks handling over $100 million a day in transactions.

However, the entry of more institutional players is huge news for the crypto industry. According to many crypto pundits, institutionalized investors are the missing element needed to kick-start the cryptocurrency price recovery journey. This is after the spectacular price dip that occurred at the beginning of the year, which dragged down the market into a bearish stretch.

According to a report by Bloomberg, institutional investors have already started to invest in the industry, with some buyers currently buying over $100,000 worth of digital currencies through OTC trading platforms. This is as revealed by Bobby Cho, head of trading at Cumberland, which operates an OTC trading platform under DRW Holdings LLC.

In his view, the crypto industry has been waiting for big institutionalized investors to jump on the bandwagon, most likely following a bitcoin ETF, to help prop up the flagging market. But apparently, the big investors are already here, and many are using the OTC crypto industry to make huge buys.

Established crypto mining firms are reportedly also utilizing OTC trading platforms to sell digital coins to institutional investors at higher prices instead of waiting for the rates to go up, and many have their own liquidity desks. According to the Bloomberg report, coins from mining companies apparently command a price premium of up to 20 percent of their prevailing market value. This is because they are what many digital currency investors consider as ‘unadulterated’ crypto assets.

Because the coins are brand new and untainted by illegal activity, they easily meet regulatory requirements imposed by government bodies.

 

OTC Trading

OTC Markets Have Major Advantages for Investors over Crypto Exchanges

According to Cho, many investment firms are choosing to invest in the cryptocurrency industry at this time because of current market stability. It allows for better market prediction and risk evaluation.

Among the main advantages of using OTC trading platforms, especially for big investors, is that they generally have sufficient cryptocurrency liquidity to facilitate multi-million dollar digital coin orders. Moreover, buying millions of dollars worth of crypto on exchanges is hardly a straightforward process. Market movements arising from the huge transactions are also greatly subdued, and unlikely to sway prices by a significant margin.

Another noteworthy advantage is that cryptocurrency prices can be fixed beforehand by OTC trading entities, subsequently mollifying fears of sudden price slides and spikes, which could affect the final value of transactions.


This article by Elizabeth Gail was previously published on Coincentral.com

About the Author:

Elizabeth Gail is a crypto-enthusiast and a blogger. Her specialties include cryptocurrency news and analysis. When not writing about crypto, she’s out taking part in humanitarian endeavors across the world. You can reach out and engage with her on Twitter and Google Plus.

Singapore Embraces Blockchain and a Future in Digital Currency

Singapore Embraces Blockchain and a Future in Digital Currency

Many enthusiasts immediately think of Switzerland when looking into crypto friendly locations. The tiny island nation of Singapore, however, is making its own moves up the ranks. Such an official ranking system doesn’t actually exist of course, but that hasn’t stopped several opinion lists from appearing online in recent months. Expect “blockchain Singapore” to be two words you hear more often as the country looks to make its mark as a leader in the cryptocurrency field.

Cryptocurrency Startup Culture

Despite its size, Singapore is well respected in many areas for its progressive values. It ranks particularly high in the fields of banking and technology. But perhaps more importantly, it has remained open to new ways of doing things.

In an area where other large economies like the US and China have fallen behind, due mainly to over-regulation, it’s no surprise then that a large number of blockchain startups are making their home here in the Asian south.

Exit Stage Right

While the US has not gone so far as to remove cryptocurrency investment outright, China took that step late last year by banning initial coin offerings (ICOs). According to leaders in Beijing, ICOs are now defined as illegal fundraising tools because of the increase in cryptocurrency fraud. To illustrate this, a recent study by ICO advisory firm Satis Group concluded that as much as 80 percent of all ICO’s in 2017 could be identified as scams.

Now whether or not that number is accurate is anybody’s guess. The industry is so young that it’s wise to take any research with a grain of salt. But one thing is for sure, a clear trend is emerging. The number of blockchain startups moving to crypto friendly locations is on the rise. Both Hong Kong and Singapore have already absorbed many startup relocations and more are likely on the way.

Due to its proximity to the mainland, similarities in culture, and more importantly open-mindedness to change, Singapore will remain a hot spot for digital currency talent. Some of the most well-known names in blockchain now call Singapore their home and include the likes of TenXQtumKyber NetworkWanchain, and Zilliqa to name a few.

The Circuit

Popular industry TV shows like CNBC’s Crypto Trader are developing quite the reputation for traveling the world and meeting local blockchain talent. As the number of conferences continues to grow, media coverage is further cementing Singapore’s reputation as a global player.

Blockchain Summit Singapore is hailed as the largest blockchain event in Asia. The conference concluded not too long ago (August 2018) and will be a yearly event. It brings together over 700 entrepreneurs, investors, industry leaders, programmers, and technology innovators into an intensive one day summit.

In addition, the incredibly successful annual Consensus event by Coindesk now has an Asian branch. And, you guessed it, Singapore will be its host. The cryptocurrency circuit remains an effective drawcard as new and established projects look to collaborate and pitch ideas to investors around the world.

Project Ubin

ICOs are clearly bringing a new class of investor into the startup funding game. And while Singapore is establishing itself as a corporate honeypot for this technology, don’t bet on the authorities taking a back seat.

The Monetary Authority of Singapore has every intention of getting involved. In 2016 the World Economic Forum published a report that predicted that up to 80 percent of banks would develop some kind of distributed ledger technology (DLT) in the following years.

DLT

 

DLT is a controversial topic since the banking sector has been quick to dismiss Bitcoin but embrace the so-called underlying ledger technology. Project Ubin is the government-led initiative to bring DLT to Singapore’s national currency. The central bank is partnering with three different technology providers to develop a delivery versus payment (DvP) platform. Its main goal is to create a token form of the Singaporean Dollar (SGD).

A Singapore digital currency won’t be a surprise to many readers though. There is already a push worldwide for cashless societies. Countries like Sweden are already heavily invested in this idea to the point that many businesses simply refuse to accept cash payments. Ubin might just be the project that brings that reality home for the city-state.

Authorities and corporations worldwide are promoting the idea of DLT in business practices. But where does the consumer stand in all of this? Skeptics will have their debating hats on though as many in the cryptocurrency community question just how distributed these projects really are.

Blockchain Singapore

The race is on. A whole new way of doing finance is upon us, and cities are scrambling to be the leaders in this emerging field. Which location will be the capital of blockchain technology? Switzerland? Singapore? Malta? If the boom of the tech companies of the early 2000’s is anything to go by, the early players will almost certainly have a major advantage.

It may be interesting to play devil’s advocate and question whether cities will indeed play such an important role in the future. We already have many talented companies with teams scattered across all four corners of the globe. Both the internet and Bitcoin have pioneered this idea of decentralization, and that concept is making its way into other areas of our lives. It’s not too far-fetched to imagine a programmer coming up with a groundbreaking solution from somewhere remote like Greenland.

While that kind of scenario is exciting, it’s not what we are currently seeing. For now, at least, hubs like Singapore will continue to attract investment, entrepreneurs, and dreamers wanting to make a name for themselves in the most exciting field around.


This article by Ryan Smith was previously published on Coincentral.com

About the Author:

Ryan is a web developer, writer, and cryptocurrency trader who hails from sunny South Africa. He eats, breathes and lives crypto. He has experience trading in the foreign exchange markets and is always trying to understand the bigger economic picture. When not meticulously looking over charts he can be found planning his next road trip or running around a 5-a-side soccer field.

How the Blockchain Was Used to Catch DNC Email Hackers

How the Blockchain Was Used to Catch DNC Email Hackers

There are still people out there that believe that bitcoin transactions are anonymous. However, the Bitcoin blockchain can be used to trace cryptocurrency transactions to specific actors and money laundering networks. Last month’s indictment against the 12 suspected Russian individuals who hacked Democratic National Committee (DNC) servers is a testament to how authorities can use the blockchain to track down offenders involved in scandalous cryptocurrency activities.

According to the indictment, the 12 suspects used bitcoin during the 2016 election period to buy the dcleaks.com domain, which was later on used to post emails pilfered from the Hillary Clinton campaign. The group also paid for the server in Malaysia that hosted the site using Bitcoin and purchased a Virtual Private Network (VPN) using the same pool of funds.

The suspects, who allegedly worked for the Russian Main Intelligence Directorate of the General Staff (GRU) unit, specialized in cyber-security operations that obtained invaluable documents through computer intrusions. They were apparently involved in large-scale operations designed to sway the U.S. presidential election and hacked emails of volunteers and employees connected to the Hillary campaign, including its chairman’s.

Using the alias Guccifer 2.0, the Russian hackers contacted a U.S. reporter and gave him access to the stolen files on the dcleaks.com site, leading to widespread news coverage. The compromising information is believed to have had an indirect impact on the elections.

Tracing Transactions Back to the DNC Hacker Group Was Easy

Tracing the Guccifer 2.0 bitcoin transactions to the culprits was relatively easy as demonstrated by Tim Cotton, a blockchain developer. He was able to trace back the purchases to the GRU unit, which hacked DNC servers while using only publicly available information. By analyzing the blockchain, which underlies bitcoin, it is possible for law enforcement and users to access the public ledger and identify a node indicating where a purchase was made.

Data found about transactions that take place on cryptocurrency exchanges is especially invaluable for law enforcement as such services usually require personal information to allow users to transact. This information can be traced back to an individual and is much more reliable than bare numbers and letters.


This article by Elizabeth Gail was previously published on Coincentral.com

About the Author:

Elizabeth Gail is a crypto-enthusiast and a blogger. Her specialties include cryptocurrency news and analysis. When not writing about crypto, she’s out taking part in humanitarian endeavors across the world. You can reach out and engage with her on Twitter and Google Plus.