What is FinTech and Digital Currency? Should I buy Bitcoins?
How can FinTech help you make money?
FinTech refers to an industry composed of companies using innovation and technology to compete with traditional financial institutions in the delivery of financial services. They are easing payment processes, eliminating fraud, saving costs, increasing financial planning, thus benefiting the Financial Industry as a whole.
The insurance industry is seeing the rise of “InsurTech”, while mobile payment solutions, personal finance management systems, peer to peer lending are serving as an important front for growth in the Financial Industry. With crowd sourcing and mobile payments, running a business has never been easier.
- Crowd sourcing can allow you as a bright individual with bright ideas to sell it directly to the people. If your idea is great, you may get your required funds within weeks.
- Mobile payments can eliminate the need of Point of Sale (POS) machines, that is not owned by a lot of small businesses due to the extra costs.
- Cross border currency transfers by Transfer wise is leading a major challenge to the payment industry dominated by a few major players.
What is Digital Currency and Bitcoin?
Digital Currency like Bitcoin is a new form of intangible Internet based currency that is similar in properties to the paper based tangible currency. Digital Currency thus enables instantaneous transaction that allows border less transfer of ownership.
Why should you care about digital currency?
Because, one bitcoin was prized as much as an ounce of gold recently.
Introduction to Bitcoin history from the Social Network
Did you see the movie called “The Social Network”? It describes Mark Zukerberg’s story of how he started Facebook.
The Harward twins in the film who actually come up with the idea initially are none other than the Winklevoss twins. They won a law suit on Zukerberg earlier, but that was just peanuts for these guys.
They recently made a petition to get Bitcoin listed as an ETF. The US Securities and Exchange Commission (SEC) have unfortunately just denied the application from the Winklevoss twins.
In anticipation to this hearing, the Bitcoin zoomed to the price of one ounce of gold. Recent rejection of a Bitcoin ETF in the US has led to almost 20% decline.
Centralized vs Decentralized digital currency
Digital currency can be centralized or decentralized. If a digital currency wishes to operate similarly to a central bank, then they themselves control the currency generation. Whereas, Bitcoin was the first decentralized digital currency.
Bitcoin did start out very decentralized with individual computers mining bitcoins across the world. These days though, traditional mining of Bitcoins from your home computer is more complicated. The energy usage for processing the algorithm is no longer profitable with a home PC.
Bitcoin miners purchase sophisticated hardware. Many have even used their gaming devices to mine bitcoins. Consequently, Bitcoin has now become increasingly centralized.
What made it possible to be decentralized is the Blockchain technology. Conceptualized by Satoshi Nakamoto in 2008 and implemented consequently, Blockchain has become instrumental in various other applications.
Should you buy Bitcoins?
Inspired from Blockchain technology, Bitcoin is a superior currency. It is backed with the technology and also the volumes around the world.
Bitcoin has found itself useful also in illegal transactions on the Dark web. Hence, finding itself useful in several applications, the global virtual currency is here to stay.
Volatility of Bitcoin is the main concern. I am confident of its growth to foster to the ever growing global economy. Country specific regulation wont affect overall usage of Bitcoin. Countries like Estonia have very much welcomed the digital currency.
Bitcoin makes it possible to trade without the need to worry about central bank decisions. Finally, as an asset it is not correlated to traditional industries. Not sure if you can classify it as an asset though. As it really does nothing for you. Almost like money lying around. Converted into a digital currency, hoping to rise upon demand.
My suggestion is to maybe hold a little Bitcoin in your portfolio. Buy only at a good price. Remember to never hold more than 5% of any single asset.
India’s Demonetization and FinTech
India’s bold Demonetization plan came under the realization of the benefits of booming FinTech in India to boost tax collections, eliminate counterfeit currency and eliminate corruption by making records of transactions available for most transactions. The Indian FinTech industry seemed prepared, but their customers still need to adapt to this new mode of payment.
The young India may adapt quickly, but the Older generation struggle to use mobile apps. The rural population struggles to even connect to devices. Hopefully, soon they too will engage in Digital payments.
How FinTech motivated me to blog
My story of a Finance + Technology guy making a novice Blog and hoping to do awesome stuff in Fin Tech one day
Technology gives you a lot of power. I myself have created this Blog seeking to add great value and monetize it with time. Click here to know more about my life before I started this blog.
Been a few months now and I have successfully set the website up. I have a few quickly drafted articles prepared. Hoping to build enough original content slowly every day as I aim to understand ways to boost the SEO of my website. I have google ads, a few affiliate links and a donation tab. I am additionally trying to market myself and my skills for projects in Finance and Technology as a consultant.
In a way, I have a payment gateway set up in a website which is very much like my virtual shop or my virtual library. This is closest to what I have ever got to actually run a business. Have added a lot of value to lots of people and companies, I may have already crossed the threshold of experience needed to run a successful on line business.
Maybe this will let me know of what other skills I require to run a business. Maybe those findings will affect my future career choice. I have a long way to go. As for now I realize that the effort required to look at the big picture and the effort required to be specifically really good at something is quite different.
You cannot actually be a one man army and do everything. I may need to read my Blog on collaboration again here. Maybe work with an other organization could boost my skills and knowledge to better plan my venture.
Collaboration for a FinTech project?
In case you are looking for a resourceful asset to assist you in challenging projects in Finance, FinTech or Business, do click below to have a look at my CV/Resume. Connect with me by email on: firstname.lastname@example.org
Read more interesting stories at milankaraja.com