Following the recent security breach where 7,000 bitcoin were stolen from the Binance cryptocurrency exchange, TFT spoke to Simon Cocking (Chief Editor at Irish Tech News, CryptoCoinNews and InvestInIT) about the future of crypto.
TFT: Is crypto a commodity or a currency?
Simon: Some whales are holding bitcoin like a commodity for sure, especially when it was less volatile than other places to store wealth. Until you can seamlessly pay for day to day goods everywhere, then it is fair to argue about it’s limitations as a currency (it’s not completely one yet).
TFT: Tell us something new about crypto?
Simon: We’re still at the early days of wide-spread adoption. We’ve gone beyond the initial, over wild hype, but we’re still in the valley of making it all actually work, in a seamless and non painful way for the everyday user. There is still too much market manipulation, for example 85% of exchanges are showing bot like trading patterns, according to Gillian Tett’s article in last weekend’s FT magazine.
we’re still in the valley of making it all actually work, in a seamless and non painful way.
TFT: How long can trading continue unregulated and how can consumers protect themselves?
Simon: With all these things it is up to the investor to do their due diligence. Naturally the next question is how? If an exchange boasts of large volume, but the amounts trade are of small volume, and seem to be constantly buying and selling within very small ranges, then this should raise some red flags. You can also look at the various buy and sell orders stacked up, and see if they seem credible. Even just small amounts to create the perception of a token having higher volume than it really has, like lots of bots buying and selling, rather than actual human investors.
With bitcoin you don’t have this problem so much, it is rather tokens such as ERC20 ones. Where the companies who launched the ICOs to put these tokens on the market are trying to reassure their community of small investors that the token actually has value and a future, and will ‘go to the moon’. It also benefits the exchange to have more volume, as there are more trading fees, but it may actually be bringing little to no value to the actual token or small investors.