Crypto-currency once thought of as a black market gamble is gradually becoming a sensible trade option.

The entire value of crypto-currency currently stands at $128 billion dollars and the value is increasing daily. This week, within the space of three days (7-10 October) the value of BitCoin increased from $4,300 to $4,893, a near $600 dollar (13.8%, {wee green ‘up arrow’ image}) increase in less than half a week.

Trading in Bit-Coins, Ethereum and all crypto-currency is not without its external risks however, only last week $63 billion dollars were wiped off the total value after the Chinese Government outlawed all crypto-currency trading.

According to the Wall Street Journal, the Chinese Government have cited fears that the ‘increasing popularity of crypto trading could weaken official control of the country’s money supply’. Their reasoning being that everyday investors situated in the country have invested heavily in Bit-Coin and have even been found betting against Yuan, the native currency.

During the month of August, it was discovered that 45% per cent of the total crypto market share was consumed by three Chinese exchanges (Bitfinex, OkCoin and BTCC). The Chinese Government now considers the trading of crypto-currency as an illegal form of public financing.

This decision sent the crypto market plummeting, resulting in a $63 billion dollars devaluation, but within the week rallied and is now within touching distance of its original value prior to the Chinese Government’s financial bombshell. Still a serious danger to the future of Crypto currency, it has still to be seen whether other markets such as the US and Japan will follow suit.

Ethereum, another alternative currency which some argue is built on better technology than bitcoin {wouldn’t take long to find a couple of decent blogs supporting this claim}, also suffered its own financial trauma earlier this year, after a major hacking incident led to one person, within a matter of minutes, stealing $31 million dollars worth of Ether. Luckily a group of ‘white hat hackers’ (Good Samaritans of the hacking world) spotted the hack in action and thwarted any further damage. If left undiscovered, the hacker could have escaped with more than $180 million dollars.

Ironically to halt the hack the ‘white hat hackers’ actually hacked the remaining wallets (a virtual system where the Ether is stored). They themselves hacked the remaining $150 million dollars worth of Ethereum. Once the ‘safe’ hack was completed, they began returning the currency to the victims of the cyber robbery.

There was however still the outstanding issue of the unrecoverable $31 million dollars worth of Ethereum. Determining this and hacks of a similar nature as a serious challenge to the future of the crypto-currency, programmers developed a solution, a Hard-Fork. Essentially diverting the system to run on a completely new code, nullifying the flaw that allowed the hacking to occur. In essence this would also allow programmers to reverse transactions and recover the stolen Ethereum.

As long as Ethereum miners upgrade to the post Hard-Fork software, the security flaw that allowed the hack to occur would be corrected and neutralised. The $31 million dollars of Ether could also be traced and given back to the rightful (and grateful) owners.

With the world becoming more and more dependent on technology, it only seems fitting that future currency would become digitally reliant. Beyond the reach of banking conglomerates, they would have no power in devaluing the currency following a severe market crash (i.e. 2008’s cataclysmic recession), inflation or quantitative easing. As a global currency, it would be resilient against market crashes, and immune to exorbitant exchange rates. It is also almost impossible to hack and retain stolen currency.

In the space of four years (Aug 2013-Sep 2017) the value of a single Bit-Coin has soared from $100 dollars to $4817, an increase of more than 4500% per cent.

In the early days of the fledgling currency, traditional financiers claimed that similar to the dot com crash, the value of crypto-currency would implode and its bubble would burst, however that now seems unlikely as even ‘global financial behemoths’ such as Goldman Sachs, Visa, Capital One, NASDAQ and the New York Stock Exchange have invested in the burgeoning technology. Rumours even persist that  HYPERLINK “ Sachs, weary of being left behind, are preparing to begin trading in the Bit-Coin market. 

What does this mean for the average person though? Although it can be assumed that it will be a while yet before people are using Bit-Coins for their Morrisons weekly shop, stores across the UK are beginning to accept Bit-Coins. Gaming and technology store CEX freely accepts the currency, offers you the opportunity to pay for private flights with the aid of Bit-Coin and even offers the option of selecting Bit-Coin friendly restaurants when choosing who delivers your meal. 

Not quite popping into your local store for milk and paying with Bit-Coin but with online shopping almost completely industry standard, it won’t be long until more shopping is crypto-currency friendly.

Remember at one point in the not too distant past, online shopping, Ebay and Paypal would have been thought of as laughable insanity, and look what happened to each of those.

A Victorian institution, it seems that the evolution of the financial system is overdue. Will crypto-currency be the spark that lights the fire?