Crypto coins, software defined radio and Bitcoin: What to know about the two topics
Crypto coins have surged in value in recent months, as a growing number of crypto-asset-focused cryptocurrency users and investors seek to access financial services with more confidence.
The rise of the crypto-currency has brought new challenges to traditional banks, which have been reluctant to embrace cryptocurrency in the face of the cryptocurrency’s volatility.
But in an industry where investors are increasingly using digital currencies to access funds, there are now many potential solutions to the crypto currency’s volatility and its slow adoption.
In a recent article for the UK financial services magazine Money, Simon Leibowitz, head of innovation at investment bank Credit Suisse, said there was a lack of understanding about the technical challenges associated with the development and use of digital currencies.
While there is a lot of talk about digital currencies as a way to make money faster, the risks are still too big to ignore, Leibowsky wrote.
He said:”It’s an exciting time in digital currency history, as there is much to be gained from building on the underlying technologies of the internet and mobile computing, and the emergence of the blockchain technology.”
But this new development has also raised the spectre of a digital currency that is fundamentally more fragile than bitcoin, and that will likely have a hard time scaling.
“The underlying technology and protocol of the underlying blockchain is still relatively new, and it remains to be seen how this new digital currency will be developed and deployed.”
As a result, there is an urgent need for regulatory clarity around how digital currencies will be regulated, and how digital assets will be used and traded.
“The rise in the value of cryptocurrencies has been particularly evident in the past week.
The digital currency Bitcoin has risen to $14,979 in early trading, which has been the highest since November 2016.
Bitcoin’s value soared as the cryptocurrency market boomed, reaching a peak of more than $2,000 in February.
But that has since fallen to less than $100, while the price of Bitcoin Cash, the currency used to buy Bitcoin, has fallen to $0.
The rise in Bitcoin has also helped push the value-added tax rate down to a record low of less than 0.1 per cent.
Bitcoin also has been in a steady decline since it surged in early November, when the cryptocurrency surged more than 60 per cent in value.
That price spike coincided with the release of the SegWit2x hard fork, which saw a hard fork in the bitcoin network to create a digital version of the currency.
But there is now a growing sense that the price rise is not sustainable.”
There is a real risk that bitcoin will continue to drop in value, and this may have implications for the entire financial services industry,” Leibowson wrote.”
This is because it is a risk that we need to manage at the margins, by not investing so much in bitcoin as in digital assets, and by not treating the new digital asset as a speculative investment.
“In his article, Lebowitz said there were a lot more people buying cryptocurrencies than selling them, which could put pressure on traditional banks to make a greater investment in digital currencies.”
The risk of a significant digital asset being undervalued has never been greater, he added.
“When we talk about risk, we are talking about risk in the form of the value you get from owning a digital asset or currency, which is a function of the risk of its underlying technology, which can be either more risky or less risky than the underlying technology itself,” he wrote.
“This is why we need an open and transparent debate around the risks and opportunities of digital assets.”
Leibowitz said that while there was no need to be overly optimistic, digital assets were being increasingly used in ways that could create a lot risk.
“It is not the case that the value that is created by the technology has to come at the expense of its users,” he said.
“The use of a new technology has the potential to be more beneficial to the people who use it, and more beneficial for the society that it serves.”
This article was originally published by Money and is republished here under a Creative Commons licence.