Cryptocurrencies, the most famous of all being Bitcoin, turned geeks and normal people with a bit of tech interest into virtual millionaires, overnight. In recent months they’ve hit the headlines for facilitating the sale of drugs and firearms by concealing the identities of those involved. They even accentuated the capital outflows from Cyprus during the country’s financial collapse and subsequent EU bailout earlier this year.
In 2011, those buying into cryptocurrencies were laughed at by investors and economists. Now, BitCoin is regularly the feature of two page spreads in the Financial Times and is rumoured to be a serious headache for regulators of the traditional banking system. Since the high profile take-down of The Silk Road (a shady, Deep Web marketplace mainly used for drug sales), the FBI have backed off.
In a further vote of confidence, the Chinese government recently indicated that they have no real issues with cryptocurrencies and have allowed a Chinese exchange to grow into the world’s largest, surpassing MtGox a few weeks ago. However, they’ve also eliminated the possibility of it ever becoming part of their official national finance framework.
In spite of its recent successes, BitCoin remains rouge. Personified, it’s a surly teenager protesting against “the system”. Big Business has given it nothing more than an amused smirk because BitCoin doesn’t wear a suit to work nor have Terms & Conditions attached. Ripple’s ‘XRP’, a new kid on the cryptocurrency block, does.