A week is a long-time in...everything

The world is changing very fast

The last truly great Socialist Prime Minister in the UK, Harold Wilson, who was in office from 1964 to 1970 and from 1972 to 1974 uttered one of the most enduring quotable quotes by a British Politician. He said that “a week is a long time in politics”.

Had he still been alive today, he could have attributed the same sentiment to just about every facet of life. That is certainly true of finance and financial innovation although it may take some time for some of the new advances to finally be accepted.

I have always believed that everyone has a technological cut off point. My mothers’ was microwave ovens. She simply failed to grasp the concept, and this created something of a fire hazard that meant the microwave was quickly removed!

This rather long and contrived preamble leads me to my concerns over blockchain. I mostly get it but firmly believe that it will be the next generation who truly “get it” and more importantly use it. From what I understand, it could be revolutionary in so many ways and eventually be considered as important as the internet.

Of course, blockchain leads us on to cryptocurrency and back to Government. Sensible, unbiased studies need to be undertaken without any preconceived ideas about regulation or control to ensure that the public continue to be given the opportunity to benefit from innovation.

Cash? What’s that?

The investment made by the Bank of England in the new generation of banknotes will presumably be the last. It would be interesting to see the figures for use of cash over the past five years or so.

A couple of years ago, I was living in a small village and was asked to help out at a wedding that was taking place at the local church. I was asked to ferry some guests between the church and reception and next morning was asked to take them back to their cars. Four guests from London Insisted on paying me five pounds each for the service but they needed to find a cash machine as they “didn’t carry cash anymore”.

Cash is in itself becoming outmoded and as it does, again a generational thing, we won’t need fiat currencies.

The mind-boggling array of alternatives to cash where we can now use our smartphones, prepaid cards, even Paypal to move value mean that cash and therefore banks will fast become obsolete.

There is an interesting battle of wills now taking place within banks. They still see themselves as a traditional provider of financial services and obviously support Governmental concerns over regulation as without regulated markets banking collapses. But, they need to begin to embrace blockchain and cryptocurrency or they will find themselves way behind the curve in as little as five years’ time.

Crypto…. more than Bitcoin

All publicity is good publicity! Maybe, Maybe not.

In an episode of Showtime’s marvellous series “Billions” last week the main protagonist asked to be paid an illicit payment in Bitcoin. The clear inference was that Bitcoin is mainly used by criminals and those who wish to keep their financial dealings “under wraps”. To be honest though, don’t we all like to keep our financial dealings under wraps?

This is the clear defence being put up by the authorities to try to hold back the flood of interest in the use and development of cryptocurrencies.

Lack of control can be frightening, particularly to Governments, but a certain degree of control can be a good thing even in a growing market that glories in a lack of it.

As Mark Zuckerberg said (yes, I know, I have used this before), the time for a yes or no on regulation has passed, it is what type of regulation is needed that is now the question.

The man in the street remains totally indifferent when it comes to cryptocurrency and that is why he has only heard of Bitcoin and then only bad things. Until there is “official” recognition of the benefits of a deregulated (not unregulated) market, progress and acceptance will be slow, painful and limited to a few enlightened souls.