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Is crypto-craze past its peak?

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Arsen Bakhshiyan
Arsen Bakhshiyan
By Arsen Bakhshiyan

The year 2017 was, to put it frankly, an unprecedented year for cryptocurrencies and their underlying blockchain technology.

But the unexpected monetary heights of late 2017 have since retracted southward. This has led to various commentators arguing that "the bubble is about to burst." However, this article will pinpoint five interesting opinion pieces that would suggest otherwise.

If you are 20 years old or above and you remember the days before smartphone technology, then you have probably taken a photograph using a Kodak camera. The photography manufacturer was a leading player before the introduction of smartphone cameras, however, it failed to grow with the times and subsequently lost a large section of its consumer base.

Nevertheless, Kodak is making sure that it does not make the same mistake again. It is in the process of releasing its own cryptocurrency called the KodakCoin, which will allow photography enthusiasts to trademark and sell their original content through blockchain technology.

When the news was initially announced in the public domain, Kodak's share price tripled within a week. Even though there is a lot not to like about this particular project, it is indicative of larger acceptance of crypto-coins even with behemoth dinosaur brands like Kodak.

Bitcoin scaling technology has also been attracting heavyweight backers.

You've probably heard about the scalability issues of the underlying bitcoin technology. In a nutshell, bitcoin is only able to process seven transactions per second. Its block confirmation time remains stagnant at 10 minutes and transaction fees are getting more expensive.

However, FinTech start-up, Lighting Labs, claim that they are inches away from releasing their Lighting Network technology. If successful, bitcoin's scalability concerns will be a thing of the past. The project has some highly reputable investors, including none other than Twitter CEO Jack Dorsey, PayPal COO David Sacks and Litecoin founder Charlie Lee.

Amazon, who recently overtook Alphabet to become the second most valuable company in the world, has unintentionally created widespread speculation that it is about to build a cryptocurrency of its own.

Some really smart and attentive cookies discovered that in early 2018, the organization purchased three domain names linked specifically to blockchain assets including amazonethereum.com, amazoncryptocurrency.com and amazoncryptocurrencies.com.

Although Amazon have remained tight lipped about the URL registrations, it would make perfect sense for consumers to have the option of paying for goods using a cryptocurrency, especially when one considers the global nature of Amazon's customer base. Interestingly, accessing Amazonbitcoin.com redirects visitors to the Amazon homepage.

Not only was the year 2017 an astounding year for the growth of bitcoin and its alt-coin alternatives, but it was also a remarkable period for initial coin offerings (ICOs), with the cryptocurrency equivalent of $5 billion being raised. Although the late successes of 2017 have since been reversed, this has not affected investor demand for a piece of the ICO action.

In fact, to be precise, one company that claims to have already raised nearly $2 billion in pre-round funding is Telegram. It already has more than 200 million people using its messaging app, is confident it will meet its $5 billion target. According to ICO Box, the year 2018 is on course to break the $20 billion mark for total ICO investments.

Major financial institutions are also looking to adopt blockchain technology.

Since the birth of the cryptocurrency revolution, multiple industries are beginning to explore the potentialities of what blockchain technology can do for their sector.

The global payments industry is not immune from this transition, with the phenomenon set to challenge the status quo of slow, expensive and bureaucratic inter-bank payments.

Global banking partners have since realized that the current cross-border remittance infrastructure is not fit for purpose. Bizarrely, for an industry that processes more than $5 trillion dollars in inter-bank transfers per day, the system still remains slow, expensive and fraught with red tape.

To illustrate this appetite for change, financial institutions such as Barclays, HSBC, Deutsche Bank and even JP Morgan have all expressed interest in adopting the underlying blockchain concept in to their payment networks.

There are many other issues that exist in the cross-border remittance system today, but blockchain startups are eager to shake up the system.

Arsen Bakhshiyan is a researcher in economics and FinTech expert based in Moscow, Russia. He currently serves as CFO of Kvantor, a FinTech startup that facilitates borderless transactions.




Lee Hyo-sik leehs@koreatimes.co.kr


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