Is Bitcoin the next big technology?

Have you purchased any Bitcoins yet? If not, you should really think about it. Bitcoin has the potential to revolutionise the global banking world just like Uber did with the taxi industry. In the 1970’s people heard of a new technology called the “computer.” It was complicated and left most investors disinterested. Likewise, in the early 1990’s, a new technology called “the Internet” appeared on the scene. Many conventional investors held back. Bitcoin as a currency and banking platform is potentially in the same phase as those early world-changing technologies, although it is fast becoming more mainstream. The October cover story of the Economist featured Bitcoin and most news agencies have covered it in detail. Numerous online retailers are now accepting Bitcoins including Ebay, Microsoft, Dell, Expedia, WordPress and others. Even US Federal Reserve Chairwoman Janet Yellen has been talking about it: she is quoted as saying …”this is a payment innovation that is taking place entirely outside the banking industry” … “It’s not so easy to regulate Bitcoin because there’s no central issuer or network operator. This is a decentralized, global [entity]” And therein lies the beauty of Bitcoin. It acts like an online bank account with a unique type of money in it, but it operates completely outside of the global banking and currency system, with no government being able to control it. What is Bitcoin? Bitcoin is a computer program. It allows people to trade divisible digits – called Bitcoins – which can be sent to other people seamlessly. It fulfils most functions of a modern day currency and banking system. However, there are three major...

Latest – ominous signs in Venezuela, Zimbabwe and Britain

Philip’s Desk: Zimbabwe Since our last newsletter, Zimbabwe has had a flurry of activity. The Reserve Bank of Zimbabwe has attempted to reintroduce Zimbabwe’s currency through the backdoor, by issuing US dollar-backed “bond-notes”, with predictable consequences. This article provides useful information around the bond-note issue. Zimbabweans have seen it all before, and are en-masse trying to withdraw money in a bank run that is revealing these banks have, in fact, no money! The ensuing cash crunch is causing a crippling crisis, with bank withdrawal limits being established, civil servants going unpaid (including police), planned government retrenchments and a general shut-down of local demand. This article here by Cathy Buckle describes it well (as do the other articles on her blog). This is all a reflection of the typical boom and bust of money printing – while the country has been using US dollars, its banks have been lending out far more than they actually have on hand. This is a surreptitious form of money printing. These Zimbabwean banks have been “creating” US dollars. But Zimbabweans are now finding out that their banks actually don’t have this money. While the banks were increasing the money supply, there was a relative boom (or, said better, a less severe economic downturn). But now the pain of a bank credit bust are being felt. The cash crisis has caused countrywide outrage and an atmosphere of revolution is in the air with #ThisFlag protests across the country. In an attempt to quell the unrest, the government has resorted to the usual: tear gas, arrests, social media-shutdown and general intimidation. Zimbabwe is in a state...