The truth about the future of fiat currency in the face of a decentralized industrial age has been finally revealed. Niall Ferguson, the author of currency history book “The Ascent of Money”, said Bitcoin and blockchain-based technologies would be the financial system of the future.
Niall, a former Bitcoin skeptic, joins an ever-growing list of researchers advising central bankers that Bitcoin and blockchain-based technologies could soon overtake the system they are currently in charge of preserving. So the question we must ask Jerome Powell, The Federal Reserve chair, is why we still don’t have a central bank back cryptocurrency?
In a seminar which Niall delivered to the Bank of England recently, he mentions that Bitcoin is part of the significant challenge that Fiat currency faces today.
According to him, the current market bubble can be deflated with regulatory reforms in the US. However, regulations will not do anything significant enough to halt, much less undo it. These words of re-assurance are the much-needed stamp of approval for Bitcoin. Listen up, people. A financial revolution is on the horizon.
Consider his argument. If you think about it this way, the maximum number of Bitcoins set to exist is 21 million. The current number of millionaires in the world is 36 million. Their total wealth is estimated at $128.7 trillion.
So, if millionaires collectively decided to invest just 1% of their wealth in Bitcoin, BTC would be valued at $60,000. Moreover, if our millionaire friend raised that amount to 5% of their wealth, BTC would be valued at $300,000. This may not happen any time soon, since capitalists are dead set on protecting their precious paper money, but it is indeed possible.
However, Niall says that there are a few impediments Bitcoin has to overcome:
- First, Bitcoin has to be established as a store of value for wealthy investors, especially those located in third world countries.
- Second, “Initial Coin Offerings” have to be established as digital alternatives to issuing shares.
- Third, blockchain technology has to be used as a cryptographic method for preserving data across a computer network.
Indeed, all the above conditions are already underway. If the US doesn’t reform its regulation policy against Bitcoin soon, it may lose its technological advancement edge to countries such as Estonia, which has been open-minded about Bitcoin since inception.
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