The government needs to move in and regulate the crypto space to enable innovations to evolve and salve the conscience of potential investors.
The downside of bitcoin stems from the fact that it is a perfect money laundering system for crooks because they can just fake their identities and viola you can deposit money right away if hackers have demanded the ransomware be deposited in bitcoins.
The recent hacking of an exchange points to a tertiary threat.
When you buy bitcoins, they are held in a central repository called bitcoin exchange. This exchanges interphase with the consumers through a website or app and therein lies the existential threat of a hack.
The vulnerabilities of this interphases are so pronounced especially when the value of the assets being hosted within the app is treasurable, there will be endless attempts to hack into the systems.
On its etiology, the bitcoin currency was a preferred means of payment for the underworld due to its peer to peer ability to bypass the prying eye of authorities. It goes then to say that investing in such a venture is indicative of a high-risk appetite.
That’s where the red herring lies. You see, a shilling currency is similar to bitcoin in a way. However paper money is tangible paper money and is a monetary tool that is a replacement for gold and paper money and is sanctioned, guided and monitored by the central bank.
However, it has been long since bitcoin started to circulate the cryptocurrency and yet world over it has not yet been fully sanctioned by most regulatory authorities.
As an investor, if you want to have this convenience of cryptocurrency there will be need for all of us who see the potential in this to push forward in sanctioning this new trade because without security we would just be in the shark infested waters waiting to be devoured.
Beyond bitcoin there are developments around Alternative coins. For instance, There is an opportunity for M-Pesa to upgrade into an alt coin by decentralizing its float system and making the float generated transparent then there is an ethereum use case in tokenisations has a brighter future in democratizing investment in real estate by breaking down the real estate properties into miniature units that can be value derivatives for investment purposes.
But first things first, the government needs to move in and regulate the crypto space to enable innovations to evolve and salve the conscience of potential investors.
As for now, just as a chess player, there are 10 million different combinations of an outcomes of chess moves in a chess game and a human mind cannot and to certain extent machines fathom all that, hence why a prognostication approach comes in play.
Timothy Oriedo Executive Coach and Data Scientist Strathmore Business School.
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