In my letter ‘Virtual currencies and vigilance’ (January 2, 2018) I had concluded: “My view is a definite no to cryptocurrencies but by all means let us explore the potential introduction of blockchain technology with adequate safeguards.”
The more I read on both subjects makes me even more convinced of the above-mentioned assessment. This newspaper reported (January 1) that, according to research by Ernst - Young, more than 10 per cent of funds raised through ‘initial coin offerings’ (ICOs) are lost or stolen in hacker attacks.
This research showed that in ICOs companies raise money to build new technology platforms or to fund businesses that use cryptocurrencies (also called tokens) and blockchain, the software that underpins them.
This is the distinct difference that needs to be made between blockchain and cryptocurrencies. While the former is a useful software tool that can be used to support not only financial products but a host of other purposes (e.g. retaining medical or other records), the latter are fraught with risks and have been referred to by one of the world’s most successful fund investment managers as a “lottery ticket”.
Among the first virtual currencies to... Full article