Bitcoin: Why It Now Belongs in Every Portfolio

DATE: 18/01/2017
RETRIEVED: 19/01/2017
SOURCE: NASDAQ


A technology is called “disruptive” if it creates a new market that first disturbs and then displaces an earlier technology.

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The digital currency and clearing network is open source, mobile, peer-to-peer, cryptographically protected, privacy oriented and native to the internet. The fusion of these technologies allows for a level of security and efficiency unprecedented in the world of finance.


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Bitcoin’s potential is not going unnoticed. After it had been praised by tech moguls such as Bill Gates (“a technological tour de force”) and Gmail founder Paul Buchheit (“Bitcoin may be the TCP/IP of money”), the money started speaking. We saw investments in Bitcoin by top venture capital brass such as Marc Andreessen, Reid Hoffman, Fred Wilson and PayPal cofounder Peter Thiel; by billionaires such as Jeffrey Skoll (eBay cofounder) and Li Ka-shing (by all reports the richest person in Asia); by iconic executives such as Vikram Pandit (Citigroup), Blythe Masters (JPMorgan Chase) and Tom Glocer (Reuters); and most recently by large cap companies such as Google, Qualcomm, NYSE, Nasdaq, USAA (American bank and insurer) and NTT Docomo ($75b Japanese phone operator). Finally, several academic and government heavyweights have also affiliated themselves with Bitcoin companies: Larry Summers (ex-Treasury Secretary, World Bank Chief Economist), James Newsome (CFTC and NYMEX), and Arthur Levitt (SEC). The core value proposition of this network is the fact that, in the words of IBM executive architect Richard Brown, “Bitcoin is a very sophisticated, globally distributed asset ledger.” What Brown and others hint at is that Bitcoin will in the future be able to serve not only as a decentralized currency and payment platform, but also as the backbone for an “internet of property.”

This entails a decentralized global platform, smartphone-accessible, on which companies and individuals can issue, buy and sell stocks, bonds, commodities and a myriad of other financial assets. The effect will be to remove much of the current bureaucracy and barriers to entry, presenting a huge opportunity for the world’s 2.5 billion unbanked people.

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The scenarios projected above are, of course, not cast in stone. Bitcoin faces several risks going forward. These include:

     The emergence of a much better digital currency that steals its market lead.
     An undetected bug in the system.
     A hard fork (what happens when some nodes in the network start running a Bitcoin software upgrade that is incompatible with previous versions) causing the Bitcoin payment network to split in two.
     A sustained attack by an organization with substantial financial resources, such as a government.

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http://www.nasdaq.com/article/bitcoin-why-it-now-belongs-in-every-portfolio-cm734833

CONCLUSION: CREATE A WALLET AND START EXPERIMENTING WITH BITCOIN. YOU ARE ALREADY LATE.