Although digital currency is still in its infancy, it has the potential to play a central role in the future of financial services. As bitcoin and other related technologies grow in adoption, our financial system is poised to evolve from one that relies on a handful of large centralized institutions, to one that instead relies on millions of peers within a globally distributed network. We’ve witnessed this evolution before – when entire industries such as media, software and communications were transformed and invigorated by the proliferation of the internet. We could soon experience a similar revolution in financial services, where digital currency replaces our antiquated, costly, and time-consuming systems and gives rise to an entirely new structure that facilitates payments, streamlines accounting processes, and enforces contracts with ease and scalability. In this rapidly evolving landscape, digital currency could emerge as the valuable commodity that powers the “internet of money.”
“There’s no doubt that digital currency is going to play an important role going forward.”
The Era of Digital Gold
For over 10,000 years, humans treated physical gold as the ultimate store of value. Countless nations and currencies rose and fell, but gold remained because people valued the six properties that make it good money – scarcity, divisibility, portability, verifiability, recognizability, and fungibility.
In modern economies, fiat currencies have been brutalized by hyperinflation, war, and monetary reform, resulting in an average life expectancy of just 27 years. In an increasingly electronic financial system, digital currency offers investors an alternative: a scarce, global, apolitical, digital gold.