Learn the potential of cryptocurrencies and seize the opportunities so you don’t miss them ...
Cryptocurrency…
When you hear this word,
it's something virtual, an image-like thing.
It may seem dubious and irrelevant to you…
and you might think so.
Unlike money in the real world, which you can hold in your hand, it does not exist in a tangible form; it exists only in a system.
Therefore, it has not yet permeated society to the fullest extent.
However, cryptocurrency is considered a major revolution in the history of money and is said to be a technological advance.
◯ What is virtual currency?
Virtual Currency
Crypto Currency
Digital Currency
It is referred to by various names.
Originally, it is based on a paper by a person believed to be Satoshi Nakamoto.
In that paper,
“One electronic coin is defined as a chain of continuous digital signatures.”
It was written there.
Bitcoin was created based on that paper.
Bitcoin is,
a cryptocurrency whose transaction history is published on the Internet network in a form that cannot be tampered with.
That is what it means.
Its features are,
・Sending bitcoins using electronic signatures
・Recording and managing transactions on the blockchain in a P2P network
・To prevent tampering of the blockchain, it imposes proof-of-work calculations.
These three points.
P2P stands for Peer to Peer, a technology used for communication between multiple devices. It is the technology used by Skype, which is famous for Internet calling, and the technology has existed for a long time.
The core technology of Bitcoin is the blockchain, which has drawn attention because it can be applied to various economic transactions, and companies have begun researching it.
Blockchains are distributed computer networks
that can secure transaction safety without a central organization.
◯ The fact that banks are entering one after another
The word FinTech, which has been making headlines.
FinTech is a portmanteau created by combining Finance and Technology (technology, mainly IT).
・Simple web payments
・Personal asset management apps
・Cloud accounting software
・Small loans online
and various financial technologies exist.
Some examples of services are…
・Paypal
Online payment service
・M-Pesa
Mobile money service in Kenya that uses SMS for procedures and user authentication
・LendingClub
A service that connects people who want to borrow money with those who want to lend it through the Internet
・MoneyForward
A cloud-based personal finance management service that can create a household budget automatically
・Biticoin (Bitcoin)
A type of cryptocurrency/electronic money with which payments can be made worldwide
・Coin
A service that allows multiple credit card details to be registered on a single card terminal
These and other services offer new capabilities such as fundraising, asset management, payments, foreign exchange, and investment that banks had not provided before.
The backdrop to the expansion of these services includes,
1)
Declining costs of servers and storage.
2)
Cloud computing services have become usable in the financial sector, reducing concerns about security.
3)
Initial hardware investments are no longer necessary.
4)
Smartphones have become widespread, enabling high-security levels of identity verification and authentication.
and so on.
Investments in FinTech-related companies reached about $12.2 billion worldwide in 2014, and in the United States and Europe, financial institutions are increasing acquisitions of new services to expand their own financial offerings.
On the other hand, in Japan, regarding bank equity
Corporates: 5%
Holding companies: 15%
The Banking Act provides these ratios, and compared to global trends, Japan is behind. A banking act amendment is planned to be submitted in the ordinary session in 2016.
In anticipation of this, the Financial Services Agency opened a FinTech consultation desk on December 14, 2015.
It aims to support financial field innovation by gathering advice from venture companies and providing guidance in response.
The government is committed to expanding FinTech.
Because financial services can be provided without relying on large-scale systems or store networks, if banks can invest in or acquire these services, related industries are expected to develop further.
Among them, one that has attracted attention is the blockchain technology behind virtual currencies.
◯ Why cryptocurrency has not permeated Japan much
One reason why cryptocurrency is not widespread in Japan is the high level of trust in the Japanese yen.
Conversely, people in other countries are somewhat skeptical about their own currencies, so they diversify their assets into other currencies, real estate, bonds, etc., rather than keeping everything in their own currency.
For example, when the Cyprus crisis occurred, what happened was…
Due to a fiscal collapse, people who had bank accounts in Cyprus, regardless of whether they were Cypriots or foreigners, were taxed up to about 10% of their deposits in one lump sum.
When banks failed in Iceland in 2008, deposits belonging to British and Dutch people online also disappeared.
If you live in Japan now, you might not imagine yourself being caught in such a situation.
Also, because Japan does not border many countries and people can only depart by plane, interest in other countries or regions outside Japan tends to be low.
So globally, how much are virtual currencies traded?
As of the end of April 2016, Bitcoin alone had
Market capitalization: 7,077,753,088 USD
24-hour trading volume: 61,587,600 USD
There is a scale of over 700 billion yen, with more than 60 hundred million yen traded in 24 hours.
In the entire cryptocurrency industry, it was about 8,503,569,638 USD = over 800 billion yen, roughly the same scale as the annual GDP of Indonesia or the Netherlands.
◯ Those who act quickly have a chance to seize opportunities
When a new product (goods, information, or service) appears, how people react and spread it is studied in the theory of diffusion of innovations.
One of the theories that formalizes this is the Innovator Theory.
Proposed in 1962 by Everett M. Rogers, a sociologist at Stanford University in the United States.
When acquiring a new product, people are categorized into five groups.
・Innovators: 2.5% of the market
・Early Adopters: 13.5% of the market
・Early Majority: 34.0% of the market
・Late Majority: 34.0% of the market
・Laggards: 16.0% of the market
Innovators = Innovators
People who take on new things.
Early Adopters: 13.5%
→ Early Adopters = Early Adopters
Those who are sensitive to trends and gather information. They have a large influence on other consumer segments.
Early Majority: 34.0%
→ Early Majority
Cautious but willing to try new things earlier than average.
Late Majority: 34.0%
→ Late Majority
Skeptical but influenced by those around them to try.
Laggards: 16.0%
→ Laggards
Conservative, not interested in trends.
Bitcoin was born in 2009, and already seven years have passed.
During that time,
the price of 1 Bitcoin reached a peak of 1,127 USD
the Mt. Gox exchange collapsed, and the price of 1 Bitcoin plummeted to the 400 USD range
There have been various movements, but…
Among them, the most impactful news is that 24 dollars (about 2,400 yen) worth of Bitcoin grew to several tens of millions of yen when someone bought a house with it.
An innovator who recognized Bitcoin's potential early realized a low-risk, high-return investment.
From now, becoming an innovator in cryptocurrency and securing a large return is very difficult.
However, after 2015, there have been cases of buying newly launched cryptocurrencies and securing profits of more than 50 times.
If you collect information correctly, understand it, and engage, there is a possibility to seize opportunities in cryptocurrency.
However, many fraud offers are circulating in the market that exploit the image of “cryptocurrency” as a way to make money.
Which cryptocurrency has growth potential?
When selecting cryptocurrencies, it is essential to establish criteria and secure routes to useful information.
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