Here is the second publication of stories in 2020, so, here are some of the crypto stories you may have missed over the last few weeks.
The stories you will read include the following:
A more enjoyable option would be for you to read the magazine on your iPad using the Flipboard app. If you do not have the Flipboard app, download in the app store, install, and enter the "Blockchainology". This magazine is curated by Olusegun Oyekanmi
Crypto Wars - The War to Come Between Cryptocurrencies, Government Backed Currencies, and Stable Coins
The crypto world has always been an interesting place but now things have got very intense. There is a war brewing and it is between several crypto camps. Although it is not said, all are fighting for complete dominance. A lot will take place over the coming years. It will be a political, technological, economic, social, legal, and of course propaganda battle to determine who will stand head and shoulders over others.
Who and what are the camps we are talking about? First, there are the cryptocurrencies that started this new revolution - Bitcoin, Ethereum, Monero, Litecoin to name a few. There are the stable coins - Tether, USD Coin, Saga, Gemini Dollar, PAX Standard. Government-backed coins such as announced by the Chinese government. The US has also announced something along these lines as well. The European Union (EU) has also shown some interest in doing the same. Then there are the corporate coins such as Facebook Libra. With this new development, there are bound to be other corporates looking to doing the same.
Amazon is most likely to come into this space as it has the team, the tech, and the drive under the leadership of Jeff Bezos to do so. Walmart has already announced a patent for a stable coin. It is just a matter of time before Google says something. It should come as no surprise if the other FAANG (Facebook, Amazon, Apple, Netflix, Google) firms make some form of announcement. Apple and Netflix will not sit idly by.
Perhaps the most telling was the statement by the Head of the BIS (Bank for International Settlements), Augustin Carstens. He had initially been dismissive of cryptocurrencies. In an interview with the Financial Times, Carstens said there were bound to be digital currencies from banks sooner rather than later. I took his statements as a confirmation that cryptocurrencies are definitely here to stay. To me, all this was both exciting and frightening.
The battles to come will be fought through variables I mentioned earlier. Let’s take a very brief look at each.
Political - I am sure many see this as obvious. The political class will have to get involved and educate themselves to put the masses minds at ease. We all know based on the statements of many politicians, their total ignorance is exposed. There is also the possibility that some governments may outright ban cryptocurrencies if they feel that control is slipping away from them. Political battles to come will be very interesting on a country by country basis.
Economic - This is probably the most important and controversial of all. The advent of cryptocurrencies has opened up an avenue previously unthinkable. Cryptocurrencies have removed a massive control lever from those with the power. We can see that with individuals wanting to be free of government regulation; the same can be said for countries. Countries can now build smart contracts to do business with one another without the US dollar.
Social - There is an acceptance by the younger generation of cryptocurrencies. And in some quarters they are not. A social battle will probably play itself out in terms of the technophobes and those who believe in technical progress.
Technological - The emergence of cryptocurrencies was to solve a problem with the issue of trust. Technical advancements will continue regardless of political and social sensitivities. How politicians handle these advances should also be interesting.
Environmental - The generation of cryptocurrencies has also caused an environmental stir among many. Generating any digital money requires a level of work witnessed through the use of electricity. High electricity consumption has been admitted by those in the crypto-mining industry. Some of the newer digital currencies are using more power-friendly ways for their generation. Environmentalists will want to have a say in what happens in the future.
Legal - We have all heard in the news on matters regulatory by many governments. Recent statements by the Chinese, Russian, and the EU come to mind. Regulation is something that is going to happen; it is already happening. And yes, there is more to come.
Battles not thought of nor mentioned will all emanate from the above. There are no guarantees any of the crypto constituents will be the ultimate winner. We can continue this discussion with a much longer blog piece. As you all know, I like to keep things short and simple. Maybe sometime in the future, we will discuss many of these points at length. So, who will ultimately win this war? As always, your guess is as good as mine.
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