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What Leaders Need To Know About The Power Of Cryptocurrency

Originally published by Deep Patel, Forbes [link] on October 24, 2017

Over the past few years, adoption of cryptocurrency has grown exponentially, primarily because of its attractiveness to people looking to use alternative money. Because all cryptocurrencies are decentralized, anonymous, and electronic, they’ve been called the currency of the future. Let’s take a look at a few of the areas where cryptocurrency is having an impact on the world.

Cryptocurrency Is Becoming A Larger Part Of Our Everyday Lives

Bitcoin was the first cryptocurrency, and remains the most prominent. Because of its growing popularity, it’s now being used every day, for ordinary transactions. Well-known businesses such as Etsy and Subway accept bitcoins as payment. The BitPay Visa debit card allows you to transform your bitcoins into conventional money within minutes, and use the card anywhere that accepts Visa. Another platform, ChainTrade, is using blockchain to revolutionize the trade of food and raw materials. This financial sector represents more than $2 trillion annually.

It’s no surprise, then, that there have been movements to legitimize cryptocurrencies as real forms of payment in countries like Japan and Russia. Japan has already accepted bitcoin as legal currency with numerous major retailers. Russia is seeking to recognize cryptocurrencies as legal financial instruments, which will allow them to deal with the problem of money laundering.

Major investors are also starting to consider cryptocurrencies as an investment. As Ron Quaranta, Chairman of the Wall Street Blockchain Alliance, explains: “Bitcoin and Ether and all these cryptocurrencies are representing a different type of asset class; a different type of tradable commodity. Investment managers are our fastest growing demographic.”

Banks Will Soon Start Using Cryptocurrency

From its inception, cryptocurrency has been a challenge to traditional banking. According to experts at Bloomberg News, “Bitcoin — the largest and best-known digital currency — and its peers pose a threat to the established money system by effectively circumventing it.” Why do the new currencies pose a threat? Because of their anonymous nature and ability to work outside of the system, relying on technology instead of the authority of the state that banks use.

Despite the gulf between traditional banking and the use of online digital currencies, however, many financial institutions have opted to use cryptocurrency. Because banks have to be able to keep money and transaction records safe and secure, without slowing down the verification process, several major banks have decided to partner on their own cryptocurrency. This allows them to clear and settle transactions using a blockchain — the ledger technology originally created for cryptocurrencies.

Financial institutions getting in the game include many of the big players: Barclays, Credit Suisse, Canadian Imperial Bank of Commerce, HSBC, MUFG, State Street, UBS, and BNY Mellon.

Cryptocurrency And IoT Will Work Together 

The “Internet of Things” is rapidly becoming a reality. As we become more deeply connected to devices such as tablets and smartphones, and as our other devices become smarter — for example, a fridge that can check your levels of milk — cryptocurrency will start making more sense.

There is in fact a cryptocurrency, IOTA, that is a blockless blockchain, and has been created especially for the Internet of Things. By having zero transaction costs, indefinite scalability, and the capacity to be used for offline transactions, this cryptocurrency will change the way we use all our devices.

Cryptocurrency Can Be Used For Good 

Because blockchain doesn’t use actual money, it can eliminate many of the problems that occur with charities, such as corruption and fund leaks. This is why the U.K.-based aid agency Start Network has begun testing the use of blockchains, and why the World Food Programme is using blockchain to securely distribute cash assistance to the hungry.

An initiative called the Brooklyn Microgrid in New York City is using blockchain technology to make the world a greener place. It allows people with solar panels to sell environmental creditsthrough a phone app to residents who don’t have direct access.

Blockchain technology could also be beneficial to the environment on a larger scale. At the Sustainable Development Impact Summit of the World Economic Forum, the use of blockchain was presented as a means to allow more transparency with carbon emissions and credits. This is because data-driven digital currencies can provide much more accurate information than the current monetary system.

Cryptocurrency Has Great Potential

For leaders, the opportunities in this space are immense. Cryptocurrency has enormous potential, and with that potential comes enormous power. Already, cryptocurrency has wrought significant changes in our economy and in our world, but this is only the beginning. As innovations in this industry increase at a more rapid pace, the need to get ahead of the curve will only become more essential. Whether it’s the way investments are made or how consumers choose to buy their goods and use their devices, cryptocurrency is set to change the world.