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2017
Asia Needs more Dialogue
Solutions to urban pollution may prove complex
Spread of ESGs could herald new global movement
Investing in quality education is imperative if India wants to reap demographic dividends
China needs to lead in new multi-stakeholder world
China’s B&R initiative leading a resurgence of Asia
Education is key - but long-term: Can we survive?
New wave of robots will be beneficial to all
China needs to continue with its ‘heavy lifting’
Time is right for Chinese firms to invest in Europe
Robots to the rescue for China?
Asian Multinationals are Going Global, But to Where?
China ratchets forward with energy efforts
China’s calm necessary for globalization push
Bridging managerial gaps involves trust-building
China well-placed to power its future through green technology advances
China's new 'springtime' is here
2016
China’s moves show it’s banking on the future
Mindset for action at the G20 summit will be determined by Chinese presidency
Chinese head-hunting intensifies for rare managers that can steer overseas firms
US talk of isolation jars with growing links in Europe and Asia
Electoral rhetoric on global trade not in sync with reality
Is it time to be prudent and consider austerity policies again?
What will we do if we have no oil?
Unlock talent by finding the right fit for a person
The benefits are real and tangible
Trade along China’s ‘One Belt, One Road’ won’t succeed without the currency of trust
Reasons for optimism about the long term
2015
Can big oil go green and win?
Poorer Nations Could Sway Climate Talks
Combating Idleness and Deprivation
How China can be a model of food sustainability for the developing world
Kyoto II – Is it a Done Deal?
A meeting of the two largest economic powers
Why China will experience a 'soft' landing
Beware of superstitions
The Elephant and Dragon move ahead
G-7 target on fossil fuels raises many questions
Why Battle for Net Neutrality in the US Matters Globally
China’s resurgence – the ‘normal new’
Wanted: A managerial culture that embraces cultural differences
China's early education plan a smart investment in the future
The New Normal for China and India
2014
China's infrastructure push offers a sure track to better growth
US-China climate pact a good start, but not quite enough
Rethink the human’s place in the ‘digital revolution’
China springs a carbon surprise
Infrastructure - the invisible hand in full view
Dialogue vital for survival of Iraqi nation
China must nurture a new generation of beautiful minds
Great expectations in China and India
GM Cereals – The Pros and Corns
Time to be Honest about Our Energy Prospects
Weathering the Storm of Climate Change
Making a Big Decision? Beware of Your Biases
West Deserves Better Logistics Infrastructure
Digital Currencies do Represent the Future
From 'Printed' Houses to Wooden Skyscrapers
It’s time to bail out our schools, not our firms
Solution to India’s housing shortage – print new ones!
And the most promising green technologies of 2014 are ...
Transport infrastructure key to domestic, export growth
Oil stopgaps: Not worth risking
2013
Why the US should grant Edward Snowden amnesty
May we be more optimistic!
China headed for another massive social experiment?
A dialogue that worked
Yes, politicians deserve vacations - because we benefit
NPOs, NGOs invaluable as creators of dialogue
Look closer and ask: Is America reinventing itself?
Boston bombings case underlines need for dialogue
Millennium Development Goals or own goals?
As usual it's about balance - and timing - of course
Chinese strategists make right moves for growth
2012
Preparing for tomorrow
Austerity or growth?
Japan in danger of becoming 'just a place to fly over'
Beware of the business cycle?
An inconvenient truth
Limited offer sale: Buy a country
Where did our money go?
Leading from behind - a year of elections is almost over
Driving towards a green future
Waiting for springtime
Preserve or Perish
Startlingly similar Asia policy for Obama, Romney
Globalisation remains an irresistible trend
Google has the edge in smartphone war
U.S. Braces for China's Rise
Mankind’s General Scourge
The summer holidays are over and nothing has changed!
Put the hidden trillions to work
Making sense of India’s woes and wonders
Storm in a teacup!
Let’s give bad bankers a venue to admit their sins
News is about depth, not puff or velocity
Booming India, but too few toilets
Delayed Court decisions doesn't mean one may continue to play 'Great Game'
We need media to reflect on data and offer public a balanced view
Big polluters can lead in forging common purpose
The weighty issue of choosing a leader
EU-India Relations - Facing similar challenges
Educating with a goal
The Judicial Malaise
We are growing out, but not growing up
EU´s retrenchment enigma
Urbulence in the Eurozone and the effect on SMEs
Skolkovo May Help Russia to Diversify
Make things more effective
Tapping into the Commonwealth connection
Innovative models for public finance
Facebook revolution but Indian style
The feel-good factor
Asian investors - a private equity opportunity
India needs to be taller and stronger
China´s low sales volume...
Nations playing leapfrog
Shafts of sunlight
What webs we weave
As performers go to Davos, the circus steals the show
Can we control the politicians?
 
2011
Europe’s reminiscence
China firms should go for win-win in overseas ventures
Of procrastination...
Making sense of profiteering
Truth about financial mess must be laid bare
Small is also beautiful
China can help Europe with debt crisis
Excising the cancer of global corruption
Education, a critical asset
Arab uprisings set in motion forces of creative destruction
A new era of change
We must ensure better education for all
Beijing wary of bankrolling a lost cause
Asean's re-emergence as a local and global leader
Why India's Role in the Global Economy is Still Work in Progress
Its the leadership, stupid!
Reverse globalisation: The new buzzword
Digital Currencies do Represent the Future
By Frank-Jürgen Richter
Business Times, April 9, 2014
 

In the past few years, a curious new economic fad has swept across the world, spurred by the rapid rise of one simple piece of software. You’ve heard about it on the news, you’ve read about it on the Internet and if you’re bold, daring and wealthy enough, you may have actually bought something with it. I am speaking of course, about bitcoin.

Bitcoin is a digital currency that was released as open source software in 2009 and which has led to the meteoric rise of digital currencies in every corner of the globe. As lucrative as they are dangerous, in their short lifetime, digital currencies have seen stunning rises and destructive implosions – making and breaking millionaires faster than the regulated markets ever could. The volatility of bitcoin and other currencies is worrisome, but their popularity and rise cannot be denied.

As I write this, one bitcoin is worth US$582. What one will be worth when you read this is anyone’s guess. And therein lies the true question: Do digital currencies represent the future of economic transactions; is the rise of currencies such as bitcoin an inevitable part of the future, or just a temporary fad?

Certainly, varying forms of digitised currency have been in existence for years. PayPal is still one of the most popular forms of payment worldwide, but PayPal is not a currency in itself and it acts within the regulated markets of the nations that it operates in.

In Brazil, a couple of ingenious economists made clever use of digital currency to save the nation from hyper-inflation that had plagued it for decades. In order to stop the runaway prices, Brazil began to pay people not in the regular cruzeiro, but in the URV (Unit of Real Value) which was in fact a virtual currency.

By listing all prices and monetary information in URVs and by paying all Brazilians in URVs – an entirely fictional currency – the central bank could control the exchange rate between the URV and the cruzeiro until stability was achieved. In 1994, the URV was converted into the real, Brazil’s current currency, and the cycle of hyperinflation was broken.

In theory there is nothing wrong with companies such as PayPal virtualising payments or Brazil’s inspired use of digital currencies with the URV. But bitcoin, is essentially unregulated.

In most modern nations, the national currency is tightly regulated and has a complex web of backups and insurances to back it up in case of collapse. When things go wrong, when companies go bankrupt or stock markets crash there, there is some retribution for those affected.

The lack of regulation and consistent government acceptance, and the lack of a safety net truly make the future of bitcoin a scary prospect.

Recently, one of the major bitcoin exchanges went into bankruptcy. Known as MtGox, this bitcoin exchange was the victim of a hacking attack which cost them US$460 million. Frighteningly, speculative markets have even sprung up around the the money tied up in the bankruptcy of MtGox, paradoxically creating entirely new possibilities for calamitous failure. Perhaps even more worrisome though, is the rise of competitors and imitators. Cryptocurrencies, as they are technically known, have sprung up all over the world with names such as litecoin, peercoin, namecoin and megacoin.

Perhaps it is from Brazil that we can learn the strongest lesson about bitcoin and these other “startup” currencies. Despite using electronic currency to save their economy, just last month the Central Bank of Brazil released a statement warning about the dangers of bitcoin. In essence, they warned that unregulated digital currencies lack one of the most important features a currency must have: trust of the players involved. Without the trust of governments, corporations, financial institutions and the people at large, I believe bitcoin will always remain on the periphery of legitimacy.

As with almost every other aspect of our lives, digitisation is inevitable and therefore digital currency as an idea will not die off. However, I do not think that the current incarnation of digital currencies will live on much longer.

Bitcoin and its imitators will eventually lose out in favour of new alternatives that are either government sanctioned or government sponsored, giving them stability, a safety net and the trust of the people. Digitising currencies across the globe could lead to greater market stability, and even the eventual adoption of a single world currency.

So back to the central question: Are digital currencies the future, or just the fad of the moment? Well, I think that digital currencies do represent the future but bitcoin and its rivals are the fad of the moment, eventually to be replaced by regulated, trusted institutions.

 

The writer is founder and chairman of Horasis, a global visions communtiy


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