Topic: [2015-10-20] The Market Mogul: Bitcoin and the Developing World (Read 264 times)

Developed in 2008 by Japanese hacker Satoshi Nakamoto, Bitcoin was the world’s first decentralised digital currency. Since then, it has garnered praise, criticism and everything in between for its ability to facilitate fast and low cost peer-to-peer transactions, while at the same time having a damaging association with criminal activities: over the past few years, scandals such as the Silk Road website have emerged, in which the cryptocurrency was used to purchase guns and drugs, and the disappearance of nearly £250m on the MtGox exchange in Japan.

These events translated to questions being raised about its credibility: however, after a forgettable 2014 (it lost over 60% in value against the dollar), Bitcoin was given a boost last month when nine of the largest investment banks, including Goldman Sachs and JP Morgan, announced that they were backing a Blockchain initiative. Blockchain is the computer network on which Bitcoin sits, and operates a system whereby payment ledgers can instantly be updated without the need of a central authority. Major challenges remain: a power struggle has ensued this year between the five lead developers over whether the “blocks” in bitcoin transactions should be enlarged from their current 1 megabyte to enable more transactions per second, resulting in the creation of a rival group known as Bitcoin XT. However, last month’s news could propel Blockchain technology into the mainstream of finance over the next few years, and Bitcoin is poised to profit from this, arguably in emerging markets to the greatest extent.
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