Digital money has entered the lives of investors rather fast in recent years while the public has also developed a significant interest in the issue. The recent popularity of Bitcoin, a digital currency that can be traded through global information networks at significantly high values, has raised further interest in both parties, making headlines in several respected news outlets. Whether it be websites offering buying and selling options for numerous different currencies or a cryptocurrency blog that provides useful information about technicalities, the cyber domain is also full of options and possibilities but it all comes with a cost: the risk of receiving the wrong type of information and losing money. The ecstasy of earning easy money is always attractive but without a proper assessment of risks and opportunities, it is an equally dominant possibility to lose significant sums of money in an environment of volatility and insecurity.
Bitcoin’s strong reception and acceptance among the public can be attributed to a number of reasons but according to Ameer Rosic of Huffington Post, it all can be summarized in three points: its revolutionary approach to financial services, alternative storing of value and socio-cultural renovation. When Bitcoin was first introduced to the world in 2010, it was a mystery to most with people not understanding its complex mathematical algorithm and questioning its suspicious origins. Today, several large investment firms such as Santander and JP Morgan are carrying out multi-million dollar research projects to enter the Bitcoin markets with a strong hand. This means that soon digital transactions will take over several banking procedures as more people and companies will begin to trust and use such instantaneous, cheap and safe operations. Rosic also takes notice of how Bitcoin can be used to fight inflation and economic turmoil as the technology has a built-in deflation mechanism with an upper limit of 21 million coins to exist at all times, under all conditions. The current monetary system operates on the necessity of printing new money periodically which brings down value per unit of transaction. With Bitcoin however, the process of ‘halving’ ensures that every miner receives half of the value for each coin they mine until the year 2140 when all the 21 million coins will have been mined by a global network of investors, coming from all sorts of different backgrounds.
Local superstars are already emerging out of the chaos and the country of Georgia, a rather small and modest economy in the world, has already become a major player in the game. Since mining for cryptocurrencies requires only compatible hardware and software, the interest in the process is growing especially in the developed world where newer generations have access to computers, smartphones and similar technologies. In Georgia, Bitcoin communities encourage their members to solve complex mathematical puzzles to reward them with blocks of Bitcoin or similar currencies and record their earnings in digital databases. The country also enjoys relatively cheap rates for hydropower with low governmental regulation and is currently following China in the leaders’ board for cryptocurrency mining. An American tech firm called ‘Bitfury’ is providing the necessary computer technology and database structure for Georgian miners in the country’s capital city of Tbilisi. A Georgian political party recently held a fund-raising event using cryptocurrencies, which attracted significant interest among supporters who used their computers to mine for coins and support their political movement. A miner named Buzhaidze is a member of the growing miner army in Georgia and is currently earning $800 monthly using an app on his smartphone, mining a currency called Zcash while paying approximately $80 for his electricity bill. Buzhaidze believes that soon banks will be replaced by the new technology and cryptocurrency mining will save Georgia from its current state of economic poverty and social instability.
The cryptocurrency market had a rough year in 2018 as the prices for digital tokens plummeted, while the masses still remained uninterested in the game, at least in the United States with regulators increasing scrutiny and retailers refusing to accept bitcoins as a payment method. An ambitious financial firm ‘Fidelity Investments’ on the other hand is taking a leap of faith by creating a separate firm to introduce cryptocurrency trading to institutional investors named ‘Dubbed Fidelity Digital Assets’, providing custody services, an online platform and advisory to such investors. With the CME Group and CBOE World Markets launching their Bitcoin operations this year, Fidelity wishes to validate cryptocurrencies in the eyes of investors and help them grow their client base further on as most customers are shying away from cryptocurrencies due to price fluctuations and inadequate regulatory provisions. According to Jason Davis of Hoard, another crypto and fiat currency-trading platform, Fidelity’s struggles to bring validity to the cryptocurrencies market is well received by its players. Working as a Senior UX Designer at Wells Fargo simultaneously, Davis has noticed first-hand the suspicion that is bugging investors regarding cryptocurrency investments and believes that intermediaries such as Fidelity will help develop confidence in such investors.