We've all seen the movies and read the sci-fi books about machines and robots taking over the world. But how close are we to that becoming a reality? Smart contracts are becoming more and more commonplace in our society. Will they replace lawyers, accountants, and other officials completely or is this still just a fantasy?
The path of crypto-currencies has not run smooth since the outset of 2018. Many digital currencies, some of which had soared to their highest ever levels at the end of 2017, dropped to record lows once the new year began. Bitcoin, IOTA, Ethereum and Ripple, considered to be leaders among the crypto-currencies, lost massive amounts of value. The naysayers felt justified, and some were even waiting for the end. National banks which had warned against crypto-currency value spikes fuelled by speculation, felt they’d been proven right. The truth is, however, that crypto-currencies often plummet around the new year period. Why is this? Some believe it’s because of the changes in routine at the start of a new year. Many crypto-currency watchers have observed that digital currencies with strong connections to the Asian market tend to go very quiet when festivals are on. Once the Asian traders are back at work, the action is sure to begin.
Modern day entrepreneurs have creative ways of raising money like crowdfunding, which is steadily gaining dominance. ICOs operate under similar principles in that investors are offered shares in a currency that is still in development. In exchange, they contribute the more popular digital currency such as Ethereum and Bitcoin. Fiat currency like the Euro and USD can also be used.
The conference was opened by Parliamentary Secretary, Silvio Schembri who expressed the opinion that the Maltese Government was planning to launch a new Digital Innovation Authority Bill (DIA) which will operate as the only regulator for ‘Innovative Digital Technology’. The Technology Arrangements and Services Bill (referred to henceforth as TAS) was also mentioned by Dr Schembri, as was the keenly anticipated Virtual Currency Act. The triumvirate of bills will form the foundation of the Maltese Blockchain and Cryptocurrency Regulation.
Virtual currencies, also known by the name crypto currencies, are an entirely digital form of money. They are unregulated by any financial authority, instead being entirely under the control of their developers. National and international banks do not oversee the use of virtual currencies, as there is no physical aspect to them, and they are therefore, not considered to be legal tender.Transactions in a virtual currency involve them being shown on an online platform, which is called a BLOCK. The person sending the money must first purchase Bitcoins, on a platform known as an Exchange. The new BLOCK is then broadcast to all the other users of the network, and is added to the current blocks, making a blockchain. This completes the transaction, with no intermediate banks or transfer fees involved.The Exchanges on which Bitcoins are purchased will eventually all be approved and awarded the relevant licences in the appropriate financial jurisdictions. At present, the Bitstamp exchange has had full licensing since 2016, which means it can be used within the European Union. Regarding security, the blockchain is held over thousands of different networks, making it more difficult to hack than the one central system which holds all the details of one bank's customers and accounts.
Currently there is ample development in the Maltese blockchain industry. Changpeng Zhao, the billionaire that is behind one of the largest cryptocurrency companies in the world, Binance, is behind the planning of the new decentralised bank in Malta. The bank will be called Founders Bank, and there is a reason to it. One of the main features that makes the bank unique and special, is the fact that it will not belong to any single entity or individual.
Bitbay is a cryptocurrency exchange based in Poland which trades Bitcoin, Litecoin and Ether against currencies such as the euro and the dollar. Founded in March 2014, the company has found its growth hampered by the attitude of Polish banks which have proved unwilling to cooperate with the exchange. In this, they’re following the lead of the Polish government which is uncomfortable with crypto. In fact, the Polish financial regulator launched a campaign online recently, warning people of the possible risks of investing in, or using, crypto.
