Out of the plethora of emerging news regarding technologies and economics, one thing that is confabulated is crypto-currency in the form of Bitcoins, and Altcoins. Crypto-currency is a digital asset designed to work as a medium of exchange that uses strong cryptography to shelter financial transactions, transfer asset certification, and to have a hold on the creation of additional units.
They are also known as a form of digital currency which is decentralised and works on the basis of distributed ledger technology, in the form of a block chain, which serves as the linchpin for a public financial transaction database. Network Nodes are employed by Bitcoin which was the first decentralised crypto-currency to release an open source software in 2009, and as a result, four thousand more Altcoins (variants of bitcoin) have been created. Now both can have implications upon each other; obviously, over time rich people will find alternative measures to benefit themselves.
Firstly, although Bitcoins and Altcoins have the ability to harmonise like the Euro — yet due to the scalability issue, Bitcoins have been depreciating since the end of 2017, and continue plunging in, 2018. Bitcoin was once at $20,000 per coin but fell prey to speculations regarding banks being employed to legislate, and regulate digital currencies. Businessmen became apprehensive about buying Bitcoins, resultantly, today the it is worth $6,250; although some are optimistic about its rise.
Altcoins are burgeoning in town with names such as Etheraum, ZCash, Dash, Ripple, Monero, and The Bottom Line. Their value is the same as Bitcoin right now; but in the days to come, it will increase as people have begun investing in alternative coins, considering them more reliable. However, Bitcoin owing to its initial boom in the digital market has coerced all other Altcoins to become dependable on its value; they are indebted to the use of Bitcoin in trading currencies.
As history has taught us that if anything is transcending, and appreciating, it will eventually drawdown, and depreciate as well. It has been a tradition that nothing stays at the apex forever. Moreover, Bitcoin has established a fair distribution of wealth which underlines the fact that all new digital currency will be derived from the Bitcoin, as otherwise it will be tagged as a conspiracy against it to enrich some novel adopters. However it will be interesting to see if any of these new crypto-currencies will be able to replace it, as it struggles to appreciate itself.
Facebook can request users to shift to a new block chain far from Bitcoin, which will enable altcoins to break Bitcoin’s monopoly in the industry. Moreover altcoins through Facebook can introduce a better version of the Bitcoin Wallet — as the existing one is unmanageable and in shambles
The objective of these altcoins is a swift and secure integration with the internet. Integrating themselves with smart contracts and the underlying role of the internet has contributed to the value of altcoins. Hence those who are investing in the Bitcoin are hesitant and some have started exchanging them in traded trusts such as the Winklevoss Bitcoin Trust and the Bitcoin Investment Trust.
Moreover we need to ponder over the concept of blockchain technology which is the bedrock for verifying all digital transactions in the cryptocurrency sphere. Thereby governments, corporations and people can counter the growing Bitcoin in three ways. David Andolfatto, a researcher in the Federal Reserve Bank of St Louis has devised the FedCoin, an alternative coin which can run on a modified Bitcoin blockchain, and he has given this idea to the government to launch its own crypto-currency. Another intriguing aspect of the FedCoin is that instead of unaffiliated organizations, the Federal Reserve Bank is the ledger which assures faster transactions, and reduced taxes. Alongside, this FedCoin can be exchanged with the dollar at a one-to-one ratio.
Additionally, a shift from cash currency to crypto-currency in governments will make the collection of taxes easy, and in conceiving a policy on disbursement without the risk of fraud or theft. Other companies such as Facebook can also serves as a setback to BitCoin as it has 2.2 billion users throughout the global village and it can launch its own currency like Telegram which launched Grams that raised 850 million in its first attempt, and was able to garner another 850 million in the second Round.
Alternatively, Bitcoin also involves mining to generate tokens, Facebook can request users to shift to a new blockchain far from it, which will enable altcoins to break Bitcoin’s monopoly in the industry. Moreover altcoins through Facebook can introduce a better version of the Bitcoin Wallet- as the existing one is unmanageable and in shambles. Facebook would benefit from being the host website of this scheme as well.
Conclusively, the debate regarding the privacy and decentralization of the Bitcoin in contrast to the altcoins can also negatively impact its future. Especially since the United States National Security Council is flexing its muscles regarding the regulation, and displaying the desire to enforce stringent measures over crypto-currency.
If it passes legislation or even orders to monitor, and evaluate the blockchain as the Chinese travel ban has envisioned. Blacklisting block chain confidentiality will eventually hamper the dream of Satoshi Nakamoto of a single world currency in the form of Bitcoin. There are seven billion people not utilizing Bitcoin and if that pool is enticed to buy other crypto-currencies, Bitcoin will definitely become a story for the coming generation.
The writers are freelance columnists
Published in Daily Times, September 2nd 2018.