Cryptocurrencies: the most important invention since the internet?
There are plenty of evangelists out there making hyperbolic claims about Bitcoin et al. But just what exactly are cryptocurrencies and is there a business case for them?
When cosmetics company Lush announced it was accepting Bitcoin payments in mid-2017, Management Today considered running a story on it, if only because the headline seemed to write itself (Asset bubble bath, anyone?). We thought better of it. Cryptocurrencies, at the time, seemed the domain of dark web drug dealers, gimmick marketers, swivel-eyed Silicon Valley weirdos and financial hucksters, not serious business.
The hyperbolic claims of crypto’s cheerleaders hardly added to its credibility. It has been described as “the most important invention in the history of the world since the internet” (Roger Ver, one of Bitcoin’s earliest backers), “money 2.0” (billionaire investor Mark Cuban) and, perhaps most memorably, “a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster and stronger behind a wall of encrypted energy” (Michael Saylor, founder and chief executive of software and business intelligence company Microstrategy, of whom more later).
This didn’t stop cryptocurrencies grabbing mainstream attention, largely because they kept making a lot of people very rich, very quickly. Bitcoin’s value rose more than 2,000% during 2017 alone, while 966 more currencies launched in the same year via initial coin offerings (ICOs), netting $10bn.