The market is in a recovery phase after the quick dump that happened only a few days ago. If Bitcoin will recover back over $10,000 before Bakkt launch, there will be a strong case for the continued bull run to stretch throughout Q3 and Q4. More than likely, we will see some capitulation with continual price leveling before the launch. In other news, Blackrock’s CEO comments on what the world needs from crypto. In this article, we are going to look into that discussion.
Nothing should be considered investment of financial advice. Enjoy the ride.
Blackrock CEO On Crypto
Recently, on CNBC the CEO of Blackrock, Laurence D. Fink, discussed some of the overarching problems that crypto needs to solve currently. Specifically, the problem of remittance payments where the market is leveraging their need to basically capitalize on people’s financial burdens.
Crypto Remittance Payments
For those unfamiliar with what a remittance payment is, it is where a party or individual uses a service to transfer money from one currency to another typically internationally. Usually it is utilized when a worker from one country is sending money home to their family in another. This is widely popular in Asian countries and has started to take a foot hold in the crypto industry with companies popping up offering solutions to this problem.
The main issue with remittance payments, is large companies will offer it as a guaranteed service, but charge huge fees in terms of percentages. For instance, if you wanted to send $100 home to your family for the week, the company may take 10% of your money or $10 just to make the slow transaction. This is a huge fee for how advanced our monetary and financial systems are supposed to be in.
The main area where this fee comes from is the exchange of currencies. It is not cheap to exchange one currency for another, or to move money internationally especially through micro payments . Overall, these companies want to make money from their service, but the individuals want to send money as cheaply as possible as well.
Therefore, there has to be a better way and that is where crypto comes in. The Blackrock CEO is right, but the technology he is hinting at, does not fully exist yet. Yes, it would be much simpler to send someone Bitcoin or even a currency like Ripple or Nano would be ideal since they are already operational, feeless, and nearly instant. Although, the CEO is discussing something different entirely. He is actually talking about interoperability between currencies.
This refers to the process of seamlessly exchanging one currency for another without a fee or friction. There have been tons of companies and ICOs claiming to be able to do this, but as of yet, it has not been implemented effectively on any large crypto coins. For instance, this would basically be like someone having a Bitcoin and sending it to their friend in China. Although, the friend in China, wants Ethereum. So, without a third party, the friend in China could input a transaction into the blockchain similar to sending a Bitcoin, and receive an Ethereum instantly without a charge from the network. To my understanding, this is how it should work and hopefully it will eventually.
This is not entirely necessary, because you could essentially do this on a third party platform like Coinbase, but you will have a mining fee from the transaction, a deposit fee, a withdraw fee, and then you will have to pay VAT taxes. In reality, it does not exist yet.
The idea is amazing and will hopefully come, but it will probably take at least another 10 to 15 years before anything like that is effectively implemented. For now, the adoption of crypto is the best solution. Ideally, If we can get one main coin, or group of coins, widely accepted across the globe, the family members can just send those coins across the network to their home for small mining fees instead of a huge 10% fee.