How Brexit Helped Cryptocurrencies

Namecoin via flickr || Creative Commons

Financial and cryptoccurency markets were not shy of action during the past couple of weeks. The main spark of the thrill was the result of the Brexit referendum, with the Leave vote prevailing over its counterpart. In spite of Brexit not occurring in the foreseeable future, the confusion it generated on financial markets was evident, boosting the cause of cryptocurrencies.

Just ahead of the vote, Bitcoin hit its weekly minimum of USD 550. After the victory of the majority vote expressing the wish to leave the European Union was announced, the value of Bitcoin suddenly surged, rising to as much as USD 655 for a single entity. This could not be accounted for a mere coincidence, as the price of Bitcoin currently wavers around USD 700. Even if Brexit is unlikely to happen in the short-term, such occurrences tend to bolster the popularity of cryptocurrencies. A parallel can be drawn with problems of the Chinese banking sector or Greece´s hardships. The future of the UK´s financial sector is equally disputable, as the country itself is considered to be a hub of financial markets and institutions.

Much has already been said about the R3 bank consortium researching and developing Blockchain and its practical implications in financing. However, it shall not be forgotten that its ranks keep expanding, while giving rise to competition at the same time. To put this in perspective, Toyota Financial Services has recently joined the R3 conglomerate. Based on the fancy title, one would perhaps expect TFS to deal with financial services based on the mechanism of Blockchain. Nevertheless, one could not be further away from the truth, as the company is intended to focus on non-financial services. So far, it has not revealed any detailed plan or project.

On the other hand, the corporation had previously made a statement depicting its hopes of utilizing Blockhain as a tool for monitoring car parts, an applicability relevant to Blockchain’s function as a storage of company asset data. TFS was quite straightforwardly pointing at problems which surfaced in 2011, when Japan suffered from a severe tsunami disaster, forcing the enterprise to close two factories. As a consequence, its supply chains were cut and the company was simply unable to recover data covering its stock volume when operations resumed.

Competing with, or at least building on the idea of the R3 consortium, is the proclaimed goal of another company, called Qiwi. This corporation primarily deals with financial services in Russia, a locality that could easily end up being problematic. Qiwi has already sent out invitations to various banks and financial institutions, asking them to explore the potential practical implications of Blockchain. It remains to be seen whether Russia will be willing to support the initiative. While it is certainly true that legislation can change at any given time, public institutions might seem to take a different approach with regards to Bitcoin. To illustrate the point, the Ministry of Finance expressed its desire to have cryptocurrencies banned, an ambition standing in express conflict with the Central Bank’s eagerness to use Bitcoin’s advantages for its own purposes.

Additionally, Blockchain can quite naturally be applied in the realms of the so-called Internet of Things, ideally aiding people in their ordinary conducts. The mastermind behind this idea was Blocksafe, a company that originally started raising money to develop software verifying gun ownership. The intention is to use this app to safely register every gun, enabling states to monitor guns and their owners, respectively. The show does not end here, however. On top of these commendable purposes, Blocksafe also wants to develop special identification tools that would limit the use of guns to their owners. In other words, the trigger or the butt of the weapon would only function upon verification of the owner’s fingerprint. Nobody else could therefore use the gun, as it would be blocked. The owner would not need a WiFi connection, as the gun is envisaged to have its own database where the fingerprint will be encrypted and recorded. Connection with the app would thus only be required at the primary set-up, or later, if the owner decides to sell the gun.

Translated by Edward Szekeres

Martin Lindak