Bitcoin has been floating around in the financial world for over a decade now. Major developments and advancements have been seen on various frontiers as more and more people are getting aware of the technology lying underneath bitcoin, blockchain.
Bitcoin is already being faced with a lot of issues as of now. Manipulation, lack of regulation, illegal activities etc. make the asset highly unattractive in the eyes of the general public and the official entities. So what will happen as we move into the future? BlockPublisher recently got in touch with the Co-Founder and Chief Executive Officer of Coinsilium, a London-based investment company focused on blockchain technology, Eddy Travia as he highlighted why security tokens might gain more importance moving into the future.
- What is the future of Bitcoin?
Eddy: “In the wider sense of cryptocurrencies, there is an emerging type of token, usually referred to as ‘Security Tokens’. In effect, these are asset-backed digitised securities governed by smart contracts, which should become popular with financial advisers in 2019, especially as they will share many features as with traditional securities.
Security Tokens will become more attractive to investors and financial advisers once they evolve in clear regulatory frameworks, which are being prepared by progressive jurisdictions such as Gibraltar, where Coinsilium is increasingly active.”
- Will it replace fiat in the future?
Eddy: “In the last couple of years, we have seen new products in the market providing indirect exposure to cryptocurrencies such as CFDs and ETNs offered through regulated markets. I believe that these vehicles are more appropriate to traditional investors with limited knowledge about blockchain technology. For those investors who are knowledgeable about blockchain, they may choose to directly hold cryptocurrencies in their personal wallets, but there is no better advice than one’s own critical assessment of the different cryptocurrencies and the blockchains they operate on.”
- Is it safe to use?
Eddy: “Like any other asset class, cryptocurrency investments can hold risks. Cryptocurrencies were initially created to pay for using blockchain protocols or to exchange value on specific blockchains, not as investment products. To reduce risk, we’d recommended that investors understand the underlying technology, its benefits and also its challenges.”
Lack of regulation has been one of the major issues associated with the crypto world. Owing to this problem, a lot of negative issues and scams have seeped into it. Since there is a proper regulator clarity with the security tokens, they might get more widespread adoption in the traditional financial workflows.
As implied by Eddy, more and more education regarding the technology lying underneath cryptocurrencies needs to be provided to the people involved in this space. This might help in a more positive adoption of this space.
Still, it is very early in the crypto evolution. Only 10 years have gone past. It will be exciting to see what the next 10 years hold for this space.