The emergence of Bitcoin and cryptocurrencies is part of a broad wave of innovation after the financial meltdown in 2008. The technology puts the transfer of the electronic coins in the hands of the people. This is done through peer to peer (P2P) transactions.

The only obstacle for certain types of cryptocurrencies such as Bitcoin, Ethereum and also Litecoin can have very high volatility of values. There are various governments around the world also experimenting with cryptocurrency technologies. The cryptocurrency market has become a multi-billion dollar industry just after a decade. On December 2017, the average price of one Bitcoin was around $15,000 USD, and a few years earlier; this coin was worth a few cents back in the year 2009.

In the time of December 1, 2017 in the U.S.; the U.S. Commodity Futures Trading Commission approve Bitcoin trading futures. The big companies that perform transactions with Bitcoin generate revenues of about $20 million a day.

With the success of Bitcoin; other alternative forms of cryptocurrencies have emerged. This is a more affordable form. The currencies can also represent a share of the coins; examples are shares in a company. This will be a great innovation with future distribution of coin ownership.

The country Switzerland aims at becoming a major cryptocurrency and Bitcoin hub. Switzerland is leading in regulation and emergence of the new technologies presented in cryptocurrencies. There are also countries that are developing cryptocurrency technologies such as Georgia, Estonia and Slovenia.

As quoted by The World Bank paper “Money is useful because it can serve as medium of exchange, cryptocurrencies have advantages over physical commodities like gold or banknotes. They are easier to store and easier to transfer over large distances.

Rural communities and also remote areas benefit from cryptocurrencies as it will potentially improve financial access for people not covered by financial institutions. The traditional bank requires many steps for secure accounts to be created. With cryptocurrencies and also with Bitcoin, a code can be created to store value and also used to transfer the value.

In 2018, there are seventeen million bitcoins that have been created, with a value around $137 billion dollars. There are many cryptocurrencies alternatives that emerged, and research groups exploring more applications for the coins.

CITATION

World Bank. 2018. Cryptocurrencies and blockchain (English). Europe and Central Asia Economic Update. Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/293821525702130886/Cryptocurrencies-and-blockchain