Week In Tech: Can cryptocurrency help generation rent?
Many Octopedes and I recently found ourselves being lambasted by the media for jeopardising our house buying aspirations because of our sandwich addiction. The “young people are poor because they spend too much on food/drink/hummus (delete as apt)” topic has become a cliché recently. Clearly, giving up sandwiches isn’t the key to homeownership, so is the best alternative an investment in cryptocurrency?
The best know crypto, Bitcoin (BTC), has seen an astronomical rise over the past year, even investors from the start of November have seen a 100% return on their investment. That’s pretty unheard of, and it’s become so prevalent that even big investment houses are getting in on the action.
Nasdaq Inc. is racing to bring Bitcoin to a wider range of investors. The world’s second largest exchange operator is planning to introduce futures in 2018, making them the third major US exchange to make a play in the crypto market. BTC is becoming a mainstream investment for people.
If we’re talking about cryptocurrencies reaching the mainstream, what about one of the most watched TV shows dedicating an episode to it?
The Big Bang Theory introduced Bitcoin to millions of average people who mostly likely know very little about cryptocurrencies. It’s a high point in spreading awareness, but the show’s tendency to use superficial references to technologies means many viewers will just be seeing dollar signs rather than understanding the relevance of the tech.
The key to all cryptocurrencies is the blockchain, a kind of digital ledger. It’s too complicated to go into detail here, but essentially it’s a way of listing a number of unique addresses and recording transactions between them. It can be used for currencies, but also for more interesting projects… involving cats.
CryptoKitties allows people to trade Ether (ETH) for virtual blockchain cats… because of course. Think of every Kitty as a piece of money, when you buy one you’re essentially buying a different currency. But, every kitty is unique, meaning (in theory) that you could make a return by holding onto a particularly desirable cat and then trading it back for a different currency. If it sounds nuts, it’s because it may well be.
So is an investment into a cryptocurrency a smart move?.. Not if you’re this guy.
Cryptocurrencies are linked to a key on the blockchain. Every owner has to store that key somewhere, usually on a hard drive and that’s what leads to mistakes like this.
There are many risks associated with investing in cryptocurrencies, not least that they’re still a bit of an unknown. But, with the massive returns far outpacing the savings from giving up sandwiches it’s no surprise that people are taking such a fervent interest.