The cryptocurrency market is still in its infancy. However, there are challenges for cryptocurrency in the near term. With so many of its characteristics falling between a currency, a financial asset, and a technology protocol, the pace of growth and adoption may splinter the industry. With further refinement in technology and more stability in the prices of various cryptocurrencies, we’ll see greater confidence on the part of all market participants. Undoubtedly, we shall see tremendous positive impact of cryptocurrencies on Banking and Retail sector.
The greatest opportunity for those involved in the cryptocurrency ecosystem is in the potential this technology has in developing economies. In fact, rapidly developing technology has enabled many emerging economies to completely skip entire stages of development. For example, cell phones made it unnecessary for African countries to build telephone lines. Similarly, cryptocurrency may one day enable developing economies to forgo the need to build large financial infrastructures, clearing houses, and other third-party intermediaries.
It is strongly believed that great disruption will be caused by blockchain public ledger technology that underlies cryptocurrency. Many people see this block-chain architecture as the template for a host of applications. This technology has the potential to open the door to revolutionary possibilities in multiple industries. Escrow accounts, securities and financial instrument offerings, “smart contracts,” crowdfunding and electoral systems are just a few of the concepts that are being discussed. In fact, this is the goal of Ethereum, a block-chain-based system launched in July by the non-profit Ethereum Foundation, based in Baar, Switzerland. And it is the research agenda of the Initiative for CryptoCurrencies and Contracts (IC3), an academic consortium also launched in July, and led by Cornell University in Ithaca, New York. So much so, any financial asset that currently requires a trusted third party to provide verification could, theoretically, be disrupted.
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