Why are the world’s leading technology professionals declaring that Bitcoin could be the first global currency? Luminaries such as Jack Dorsey, CEO of Twitter; Steve Wozniak, the co-founder of Apple; and Jeffrey Sprecher, chairman and CEO of the Intercontinental Exchange (which owns the NYSE), have made such proclamations.
Sprecher is doing more than just talking about it. The Intercontinental Exchange is developing a company called Bakkt with hopes of normalizing Bitcoin to world markets.
There’s just one problem here. Bitcoin is already the world’s first global currency.
Bitcoin: the First Global Currency
Never in history has there been a universal currency until now. You could claim that the English pound, US dollar, Japanese yen or even the Chinese yuan have been the currency of world trade.
However, in all cases these fiat currencies depend on “the full faith and credit” of the country producing them. They’r tied to a given country’s economy, its politics and the vagaries of its regulatory bodies.
Also, you must convert each of these fiat currencies when travelling from country to country to use them.
Bitcoin transcends these issues. As a form of currency, unfettered by the control of any government or regulatory body, it doesn’t need conversion. Being decentralized, Bitcoin is free from any political intrusion or a country’s economic woes. Buyers and sellers can use cryptocurrency anywhere at anytime to complete transactions directly.
Issues Still Remain
While a global currency, Bitcoin is not a perfect one. With value fluctuating drastically from $7,000 USD in August 2017 to over $20,000 in December 2017 to just over $7,000 in September 2018, its inherent value is too volatile for universal use.
Although it is an effective and durable currency, cryptocurrency isn’t accepted in all forms of transactions for several reasons. It confuses and even frightens regulatory bodies of many countries. Between their lack of control over it, the fear that “bad actors” could use it for nefarious reasons, and news of the occasional hacking of an exchange, the trust is not there. And while Bitcoin does not need these things to maintain its position as a global currency, it needs them for full acceptance.
Baakt Could Change That
This is why an idea like Baakt is so interesting. That the Intercontinental Exchange, which wanted nothing to do with Bitcoin just a year ago, is now looking to embrace and normalize it for world markets and supermarkets is astounding. Their goal of creating Bitcoin mutual funds and filtering it into 401Ks could help increase the localized trust it requires while removing its value volatility. It’s part of a larger movement to establish standards and a code of conduct for cryptocurrency.
It begs the question: do we want a captive global currency?
We’ll see if this succeeds, and if so, the ripple effects and how the public responds.
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