Financial services are reaching their brand-new level. However, the reason for the revolution in the financial world has nothing to do with Bitcoin or any other blockchain-powered solution. The remarkable progress stems from big data, IoT, and AI.
By now, a good many renowned companies are choosing these modern advances to get rid of any kind of excessive services. Such web-based financial operators as Alipay, Paypal, WeChat Pay to name a few, provide millions of users with access to convenient and quick payments and banking.
Meanwhile, lenders are generating accurate responses to applications filed for loans on the fly instead of lingering for days and weeks – all due to the immediate availability of corporate and private credit history data, funds etc. In the long run, experts predict, those information-powered developments for loan assignments are to prevent and finally eradicate financial surges and crises.
Accuracy is growing in risk assessment, insurance applications review and handling, tracing fraud and such like tricks. Bots perform the jobs of stock trading advisors managing client portfolios. Robo-advisers prove to complete those tasks with at least the same, often higher, efficiency than old-fashioned consulting agencies.
Such advances in FinTech totally override that of the blockchain. The blockchain promoters refer its current stage to the world wide web in its cradle. This line rather misleads as the world wide web quickly conquered millions with such numerous handy features as email, online stores, and other .com ventures, while blockchain has just one relatively wide adopted implementation - cryptocurrencies. Even Bitcoin, once revolutionary digital money, does not abide by its promises.
As Bitcoin has been declared a freely convertible currency it should have been a viable accounting unit, routinely used in ongoing transactions and providing a stable store of value. Not a single of the above fulfills. Bitcoins are anything but for pricing. Traders, in general, do not accept it or set prices in BTC. As to store of value, you would hardly invest into something which price often varies within a range of 30% during a trading day not to mention longer time intervals.
The basic assumption underpinning most cryptocurrencies is wrong. Bitcoin advocates usually appeal to its featuring a fixed emission of twenty-one million coins. Thereby, unlike national currencies, Bitcoin offers a limited supply of monetary units. A closer look reveals the statement is obviously misleading. Bitcoin has already split. We have now Bitcoin Gold, Litecoin, Bitcoin Cash and even more forks. Apart from that, dozens and even hundreds of new cryptocurrencies surface on a daily basis. So forks and the steady arrival of new crypto-money provide excessive supply and debase it faster than any central bank.
The reason for buying crypto is not about using Bitcoins or their counterparts for routine spending and transfers. People hope the cryptocurrencies will grow in value. The actual use of Bitcoins in everyday transactions is virtually impossible. Bitcoin is so high in terms of fees and energy involved in their generation that even conferences do not treat Bitcoin as an acceptable payment method.
So far, the main users of Bitcoins are crooks utilizing the currency to buy drugs, accept payments from hacked users, especially in the ransomware attacks, avoid taxes, etc. Predictably enough, leading world countries are taking measures to bring the blockchain-based monetary systems under their control by ordering to disclose the identity of the parties involved, thus eliminating the key advantage of anonymity.
Money emerged centuries ago. Through ages of there has never been a system that would include thousands of simultaneously circulating currencies. All in all, money is a vehicle for trade aimed at avoiding the complexity of goods-to-goods deals. The number of currencies in circulation was always restricted be economic conditions that balanced their value.
Using multiple currencies within a single economy would badly aggravate its performance. For instance, U.S. economy does not use peso or pounds together with the dollar. A variety of currencies functioning in one place is not a solution to be adopted by any economy.
It is also silly to expect that any given kind of cryptocurrency alone is capable of replacing currencies emitted by central banks. Cryptocurrencies move toward decentralization and governments centrally issue money, collect taxes, etc.
A sound idea suggests abandoning the utopian cryptocurrencies and relies on trusted financial operators providing evidence-based, techie solutions and doing their best to incorporate real advances in technology into the financial industry. Odds are that those guys cannot double your investment in a week, but they are going to slog away ensuring the security while increasing the investor’s gains.