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How Bitcoin Is Like Donald Trump

Bitcoin is the sizzle in blockchain. The steak is in automating transactions of all kinds

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Bitcoin and other cryptocurrencies share a similarity to President Donald Trump because people keep finding themselves looking at the sizzle, when they should be eyeballing the steak.

How Fintech Is Like Donald Trump
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Bitcoin & Co. are the sizzle. Blockchain — the technology they’re derived from — is the steak.

Crypto-currencies are backed by nothing, save the excess cash available to buy and trade them. They can rise in value as quickly as they fall because they’re even less real than the baseball cards you had as a kid.

It’s true. Some people are “making” real money with them, getting in early. But when the leaders of a “market” are convicted convicted felons, you’re dealing with professional wrestling, not a real sport.

Blockchain — the idea of an encrypted ledger, with an audit trail to resist manipulation, and an Internet-like structure to resist attack — is the steak here.

Blockchain can secure all kinds of markets, and fully automate markets like payments  you thought were automated already. This lies at the heart of the technology.

The more scaled the database technology behind a blockchain, the greater its throughput and the more business it can handle. This is the reason the cryptocoin Ethereum is now outperforming Bitcoin in the market. Ethereum is a newer implementation of the blockchain technology. Its transaction processing systems have greater throughput, and even faster systems are being developed for it.

But blockchain is not just about throughput. Blockchain systems allow information to be entered into a financial system just once, kept securely and matched by machines. There’s no re-checking and paperwork involved. This doesn’t just eliminate clerk jobs. It eliminates banking jobs, broker jobs and a host of white-collar functions now filling the skyscrapers of central cities around the world.

It can also eliminate oversight jobs. Early Bitcoin pioneers liked to claim their system was private and anonymous. That’s why it attracted illegal markets like Silk Road and continues to attract ransomware hackers. But it doesn’t have to be private, which is behind efforts by big banks and governments to control (and tax) it.

The key to blockchain is Internet-based technology bypassing gatekeepers. Keep that in mind whenever you read a story about blockchain.

The Bitcoin Bubble Bursts?

The big news on the cryptocurrency front was the bursting of what looks to have been a bubble in leading currencies like Bitcoin and Ethereum.

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Article printed from InvestorPlace Media, http://investorplace.com/2017/06/how-bitcoin-is-like-donald-trump/.

©2017 InvestorPlace Media, LLC