Bitcoin has always felt a little fringy…you know…dark corners, secret computer labs, and ‘assets’ being sent out. It’s all a bit cloak and dagger, and the major players in the financial world have felt the same way towards digital currencies. But these days, Bitcoin is starting to turn some pretty big heads in the money managing industry.
Today the head of Fidelity (one of the largest asset management firms in the world with $1.9 trillion in assets) told the audience at the Consensus conference that she is a huge fan of bitcoin. Consensus is a technology summit for Blockchain – the tech that bitcoin relies on for its security and third party verification. Blockchain is a decentralized database system that requires full consensus for approval, thus making any single user incapable of tampering with any record without all the other users seeing the fault. This sort of self-policing security is what has bitcoin a household name in the tech world.
Bitcoin was the first, though not the last, of the digital Cryptocurrencies to solve what is affectionately referred to as the ‘double spending’ problem. The trouble with digital currencies is that they could potentially allow for double spending if the coin was able to be duplicated. The Blockchain system allowed bitcoin to overcome this issue and made it the first widely accepted digital currency in the world.
And bitcoin has been doing well. If you had invested $100 in bitcoin in 2010, you would now have well over $70 million. Yes – you read that correctly. $100 to $70+ million dollars in seven years. There’s simply no other monetary vehicle capable of producing these types of returns. And these kinds of numbers have made heads turn in the financial world. Hence Fidelity’s growing interest.
Fidelity is the only one of the major financial players who has made it possible for customers to see Cryptocurrency balances online if they have a Coinbase account already. This system will be available starting later this year. What’s more, they’ve set up a bitcoin mining group to work toward gaining understanding of digital currency, but now the group is turning a good profit. Between mining themselves and now offering services, Fidelity is getting into the bitcoin world in a bigger way. They’ve even allowed employees to use bitcoin at the coffee shop in the lobby.
The question of whether the cryptocurrency system is able to handle the high pressure needs of the financial world is still in play (for now the infrastructure doesn’t allow enough transactions to make it competitive on the global market widely), the reality that digital currencies are here to stay is clear. The sheer power, anonymity, and returns have made investors in different sectors wake up and check out the system. While it may have started life as a fringe currency under lots of scrutiny, but bitcoin has sustained itself and is grabbing up followers quickly. With Ethereum and other Cryptocurrencies coming online, there’s room for this tech world to grow.