The pace of change in the world of money and banking is crazy fast right now. Today, we want to focus on the word “crazy.”
Inevitably, when something new and exciting comes along that you want to be a part of, it is very, very (did I say very) tempting to jump in and be on that cutting edge of innovation. And to be sure, there are times when that is the appropriate strategy. Particularly if the innovation is a major shift within an existing industry.
However, when a completely new industry that has no proven, results-based track record of acceptance and sustainability, caution is warranted.
Such is the case with the dizzying innovation that is the current financial technology/cryptocurrency/blockchain/smart-contract/DLT revolution. We read daily that “this new technology” (a very broad and abstract description) is going to change the world.
Conceptually, it looks great. However, the innovation which is arguably ground zero in this fledgling industry – Bitcoin and the blockchain – is showing signs that it isn’t going to perform the function it was originally intended to perform. That is, to be another form of money.
It’s an Awesome Idea – But is it Sustainable?
Serious questions are being raised about the sustainability of Bitcoin–and even the underlying blockchain technology. It’s miners require enormous power consumption, and there are serious limits on the number of transactions per second the blockchain can reach in its present state. Furthermore, the cost per Bitcoin transaction has ballooned from just pennies to up to twenty dollars.
Apologists claim these problems can be overcome. We’ll see. However, one thing is becoming clear. We are still in the phase where the true, long-term capabilities and limitations of the blockchain are being discovered. The implications of those reality-based capabilities and limits will impact millions of people and thousands of businesses who have already invested heavily in both the technology and infrastructure.
Leave out startups who are developing new apps on the Bitcoin blockchain, many of which are expected to fail (that’s the nature of VC funded startups). The list of companies–large and small–that invested in infrastructure to accept Bitcoin as payment is significant. And they are finding that their investment was premature.
In the last few months, payment processor Stripe, gaming company Steam, and software giant Microsoft have announced they are no longer accepting Bitcoin as payment. Ironically, the Miami Bitcoin Conference will no longer accept payment in Bitcoin.
“Organizers of the North American Bitcoin Conference said Thursday that they’ll no longer take bitcoin as payment for the $1,000 tickets they’re selling. Turns out, the transaction fees and processing times associated with the volatile cryptocurrency are just too much of a burden.”
The Bottom Line
The Financial Technology revolution promised smart, simple solutions to the secure and private exchange of value between individuals. It hasn’t delivered. But that doesn’t mean it won’t.
In fact, we are confident that ten years from now, the world of money will be vastly different than it is today. However, gold and silver will always be a part of the monetary system. Building a way for you to interface with those solutions through the OWNx platform is our goal. Smart, simple access to gold and silver is just the beginning.
It’s going to take time to get it right. OWNx has provided clients with the ability to buy gold and silver online as titled, fractional ownership of physical bullion for nearly ten years now. We’re deliberate in our actions and patient in our strategy. Taking that to the next level and serving you over the next ten years is what we’re working on now. That’s what we owe you, and we intend to deliver.