Torsu Alfred's Take On Cryptocurrency

The Author

Blockchain is a rather remarkable technology which is supposed to be the future of money is now facing a lot of hurdles. This technology which is not only germane to digital currency but to security of contracts it is being used in Ethereum. Now assuming I have a Shatta Wale song on my phone and I send it to a friend, the truth of the matter is that I have not actually sent him the song but a copy of it. So I still have my copy. He can also share it with another friend.

However, principles of money require that when you send money to someone, you do not possess what you sent to him again. So if I send GHC200 to a friend via the internet I do not have to possess the copy again, maybe just the receipts. And that’s what crypto does; not only my friend and I have access to that receipt of transfer but everyone else in the space. It does this with a complex algorithm at the backend of every connected computer.

1. Highly volatile
2. Volatility “|is a rate at which the price of a security increase or decreases for a given set of returns. Volatility is measured by calculating the standard deviation of the annualized returns over a given period of time. It shows the range to which the price of a security may increase or decrease” –Source-ET. The value of crypto currencies keeps changing so fast that it’s difficult to track. This denotes high risk and possible high gains for investors in crypto currencies. Bitcoin the leading crypto currencies on 07/12/2017 the price of bitcoin came close to hitting $20,000 before settling down around $16,000. This is as stunning as it is ridiculous. JP Morgan’s CEO Jamie Dimon claims its volatility is making it a fraud. As it is not back by any value which is making this bubble more diabolic than the tulip bubble in the 17^th century. He addedwill fire any employee in his firm when he gets to know the individual is trading in crypto for being “stupid”. But then again one can always argue that crypto currency is a disruptor in the financial sector so the Dimon will typically not be in support of it.

2. Unregulated system

Crypto currencies are created by individuals; some known some are unknown in the case of bitcoin.[whether the power of creating money should be left for individuals is another debate] The system ís not regulated by governments, central banks or by any federal agency. This means there is no one to cry to when you are duped or cheated in a deal. And also crypto currency was not meant to be a vehicle of investment but to be just money.

3. Phony deals abound

Now even in countries where crypto is not illegal, many charlatans find diverse ways to hoodwink unsuspecting individuals of loads of money. A lot of trading companies deliberately misinform and inveigle their clients with high rates of interest within a short period of time. They also deliberately withhold information about the risk nature of the investment, which is very crucial being that crypto is highly volatile. One of Japan's largest digital currency exchanges says it has lost some $534m (£380m) worth of virtual assets in a hacking attack on its network

4. Illegality

The legal status of crypto currency is a volatile as the digital currency itself in many countries. Countries are declaring crypto currencies to be illegal. China has vacillated on the legality of the currency from 2013 to 2018. It’s normal to trade in crypto in China but illegal for companies to raise money through crytpocurrency. South Korea, Vietnam, Iceland, India’s central bank has completely banned it. However, speculators make the argument that crypto is not governed by any institution and it’s solely dependent on demand which makes it “democratic”.

5. Plethora of illegal activities
One of the crimes governments all over the world detest is money laundering. And with crypto currency, governments would be powerless to fight crime. Terrorist, Extortionist and cyber criminals now have an easy way to move money. “Bitcoins users on either end of a transaction can remain relatively anonymous and cybercriminals have found ways to mask their addresses, so it can be difficult for government authorities and companies to trace such illegal activities,” maintains Reshmi Khurana MD and Head of South Asia, Krollsays, a cyber security and risk consultation firm. So now if an evil villaian wants to support tterrosims at any part of the word all he needs to do is change the value of his money to crypto and with a push of a button, the receivers receive this and with another push of a button an international arms dealer is paid to deliver.

I still maintain that crypto currency is a remarkable technology. And with time these constraints bridling the full explosion of it will be addressed. When cars were first invented, they were difficult to operate, repair and expensive to use. Meanwhile the horse drawn buggy was still faster. Yet with relentless effort these challenges have been addressed and we have the Bugatti Veyron with 16 Valve engine which can travel at the speed of 407 km/h. and I am this optimistic about Crypto currency.