Short economic view on cryptocurrencies

Global economy primarily relies on the US Dollar and it is the reserve currency of the global economy. With the emergence of Bitcoin and all the other over 1 000 cryptocurrencies, financial transactions are being decentralized on a massive scale. These decentralized transactions have no recourse to the US Dollar.

This changes the dynamics of international trade, foreign relations, diplomacy, and the impact of economic sanctions. There have been attempts to “de-dollarize” the global economy and cryptocurrencies seem to be a veritable means of achieving that goal. In 2017 the blockchain technology has skyrocketed in popularity and for a good reason.

Blockchain has the potential to decentralize how trust is guaranteed, for example in money, data, identity and ownership records. According to Christine Lagarde, head of the International Monetary Fund cryptocurrencies can displace central banks, conventional banking and national monies in the long term.

Companies with publicly traded stocks are starting to make decisions to show that they stand to benefit from cryptocurrencies, and markets are beginning to reward them in a big way for those decisions. The new symbol of this movement might be Longfin Corp., whose stock rallied over 2 000 percent in a week after announcing it bought a blockchain-empowered global micro-lending solutions provider.

Short, but interesting, right?

sources:
https://medium.com/the-mission/how-cryptocurrency-is-disrupting-the-global-economy-89347581aa93
https://www.bloomberg.com/view/articles/2017-12-18/cryptocurrencies-are-starting-to-affect-the-real-economy
https://www.forbes.com/sites/laurashin/2017/11/07/why-cryptocurrencies-could-push-the-dollar-from-world-reserve-currency-status/#32c5e5e16a9e