Tuesday, February 6, 2018

Can cryptocurrencies like Bitcoin survive scrutiny from central banks?

11:06 PM    
The future of money looks very different in

the world of cryptocurrencies. There is a growing consensus among businesses, investors and countries (Venezuela in particular) that these alternative forms of online money are going to dominate payments in the next decade. There may be agreement on the potential, but quite how regulators and central banks will respond is still up in the air.
The combined market value of all cryptocurrencies in circulation reached US$170 billion by the end of August 2017, 850% higher than at the beginning of the year, according to CoinMarketCap, a leading cryptocoin prices and market capitalisation tracker website. It is no surprise that this kind of growth sparked much hand-wringing among regulators and central banks, who are still undecided whether cryptocurrencies should be classified as a commodity, an asset or a form of currency.
That might seem like an odd discussion to be having. But one of the basic functions of currency is to facilitate transactions in a timely manner. And to protect the security of the blockchain (the technology behind cryptocurrencies such as Bitcoin), the processing of Bitcoin transactions is sometimes very slow.