Bitcoin is winning. It wasn’t meant to be this way.
Not so very long ago, Bitcoin seemed to have passed its moment. Its reputation as the preferred currency of terrorists, drug dealers and pornographers — while always overstated — did little for its legitimacy.
Then, as the speculators piled on and its value roared, critics — not unreasonably — pointed out that unlike most currencies it was appalling as a source of stored value. A hundred dollars in Bitcoins today might be worth two hundred dollars tomorrow or perhaps nothing at all — less a piggy bank than a game of Three-card Monte.
The movement seemed to reach its nadir when Mt Gox — the Bitcoin exchange handling 70 per cent of transactions — was suspended for all manner of nefarious activities and allegations of fraud, theft and malfeasance soon followed. It was placed into liquidation in 2014 with over 650,000 Bitcoins still missing in action.
But all the while, Bitcoin’s critics made the same predictable mistake — despite the leading voices in the cyrptocurrency industry constantly warning them not to sweat on the cash, but to focus on the cash register.
Rise of the blockchain
Now everything is forgiven it seems, and the Chatterati are piling on. The reason for the change of heart is blockchain.
Each week Which-50 and KINSHIP digital study the global social stream to identify most influential social chatter triggered by industry research from the likes of Gartner, Forrester, McKinsey and Bain (to name but a few). This week there were over 20,000 mentions of the terms we track with Gartner once again dominating the chit chat — that’s at the very high end of the curve.
It turns out that blockchain — which Wikipedia helpfully describes as “ … a distributed database that maintains a continuously growing list of data records that are hardened against tampering and revision, even by operators of the data store’s nodes” and which provides the public ledger of transactions for cryptocurrencies originally used in Bitcoin — is a decidedly schmick idea.
In Australia, the larger banks and the ASX are all interested.
Now Capgemini has come out behind the concept, describing potentially revolutionary transformations in the finance sector.
In a paper released this month called “Blockchain: A Fundamental Shift for Financial Services Institutions”, the management consulting company says “Traditional banks may be rendered obsolete by Bitcoin and blockchain technology … the reality is that blockchain has the potential to do much more than just support cryptocurrencies.”
They further argue that blockchain is set to revolutionise the financial services sector more broadly, thanks to its potential to provide unprecedented transaction security through cryptography.
In its report, Capgemini tells financial services firms they can no longer afford to ignore blockchain. “Blockchain changes the IT paradigm for processing and has the potential to create a very different model for managing transaction processing contracts.”
The Chatter Report, by KINSHIP digital CEO Mike Green and Which-50’s Andrew Birmingham, is a collaborative program run under the auspices of the Which-50 Digital Intelligence Unit. Membership fees apply.