You know it’s becoming an issue when you wake up to your regular routine of watching financial news channels such as CNBC and Bloomberg and they’re discussing cryptocurrencies like Bitcoin as perhaps the most popular of them all. What this means is that the suits over at Wall Street are feeling a bit threatened by what is a decentralized method of handling and storing money, which means their power to keep making themselves wealthy beyond measure is threatened since they won’t have that much control over so much money anymore.
Admittedly, we’re perhaps still quite a long way away from cryptocurrencies such as Bitcoin completely dominating as a preferred medium of exchange, but the world is headed in that direction and Wall Street has already started retaliating.
Let’s get just a little bit technical so that everyone is up to speed as to the basic inner-workings of cryptocurrencies, after which focus it’ll perhaps become a little easier to understand why this development is a threat to the Wall Street big money monopoly capital.
Blockchain is the technology which drives cryptocurrencies, operating as nothing more than a public ledger system which by virtue of its existence over a network of connected computers all around the world, cannot be manipulated by a select few individuals. A cryptocurrency unit is created by a computer’s computation of a complex mathematical formula which forms part of the public ledger system and this is what’s referred to as mining.
There’s a finite amount of cryptocurrency units which are to be mined, which is one of the sources for a cryptocurrency’s value.
The Threat to the Establishment
Banks make for an example of institutions in the financial sector which have access to a centralized mechanism through which to store money and to exchange it, which means they can control its value through processes such as charging banking fees and loaning the money out at certain interest rates. Cryptocurrencies such as Bitcoin effectively render the banks useless, along with many other institutions in the financial sector, which is why they are threatened by cryptocurrencies.
The Establishment’s Retaliation
The “establishment” is very wise to this threat and so they’re retaliating by getting in on the action and trying to apply their old tricks of getting legislation formed around the trade of cryptocurrencies, which is the channel they use to make their money. They want the likes of Bitcoin to be regulated so that they can control the means of compliance and then charge people for the compulsory services which would help them comply.
Is it Too Late?
There’s no doubt about the fact that had you sunk just $1,000 into buying Bitcoin a mere five years ago that one investment would have yielded great returns. This way of thinking is what’s wrong with the mainstream approach to cryptocurrencies though. People and various institutions are treating cryptocurrencies as investment securities or commodities of sorts and so they’re being traded as such. Forex traders trade currencies which they pair against Bitcoin, for example, whereas the approach should be that of thinking of cryptocurrencies as currencies of the future.
So no, it’s not too late!