Bitcoin—a type of cryptocurrency that uses peer-to-peer transfers, rather than banks or financial institutions—appears to be one of the hottest financial topics of 2018. Proponents of Bitcoin praise the medium for giving the purchaser greater freedom and control, security, and transparency than traditional currency. Bitcoin boasts lower fees and fewer risks to merchants. Cryptocurrency shippers see Bitcoin and its ilk as the future of currency.
However, financial institutions such as Bank of America and Citigroup are assessing the risks of Bitcoin and are looking to regulate it accordingly. Chinese financial regulators have declared initial coin offerings as illegal, which greatly decreases the potential international market for Bitcoin. Other financial institutions are wary of the speculative nature of cryptocurrency, with some going so far as to declare it a fraud. These financial institutions cite purchasers paying for Bitcoin via credit card as especially problematic. This is not only because the decentralized nature of Bitcoin might attract criminal activity, but also because financial experts predict a Bitcoin bubble could result in profoundly negative financial consequences for all involved.
Whether Bitcoin will prove to be a dangerous, speculative fad or the future of currency remains to be seen. One thing is clear, though: Bitcoin and cryptocurrency will be major financial themes in the coming year.
– Allen A Garzone II, Garzone Real Estate, Inc, Boston Real Estate Agent