Bitcoin boom. Is the Fintech a true innovation or is it just a wild west?

 

Right now, while I am writing this piece, the Bitcoin's value is up to 4700 dollars.
Furthermore, in the last month it has gained more than the 70%.
Is the Bitcoin the 'gold 2.0' or has it nothing to do with the news coming from North Korea?

On day August 26th, the criptocurrency value decreased from € 3670 to € 3270 in a few seconds.
This flash crash occurred in one of the most liquid European market, the Kraken. However, this market platform, weirdly, did not release a comment on what happened. So why did the flash crash occurred?

Although the financial ecosystem is still full of services that are dimming the big evolution in progress, the Bitcoin and Blockchain are clearly the key points which are leading the entire bank's innovation and the payments' system straigth forward to the future.

On the other hand, when a strong variation occurs on the market, the Bitcoin's exchanges are often slowing down or limiting their services issuance. Even if we are talking about Poloniex, known as one of the biggest criptocurrency exchange in the world, which limited the amount of withdrawal weather in Fiat or in Bitcoin, there is no safety for investors to have money back in case of bankruptcy.

The market rules this world and it rules the world of ICO (initial coin offer) as well. It works like this: after a startup has been launched, the project is showed to the market. If the market appreciates and recognizes the project as something worthy, it will start to invest into the project by using the criptocurrency. This method avoids the burocracy that currently exists in the collection of savings. For example, a startup collected more than $185 million, in only five days. There are dozens of start-up that every day are collecting money by using the criptocurrency rather than by the traditional method of collection.
Even though in the United States they are trying to regulate the ICO, it is not easy as it seems to be. The same difficulty of regulation exists in the criptocurrency scenario. Nowadays, governments can only limit the services on the Bitcoin by controlling the exchanges, but actually that's not very effective. Moreover they are not able to prohibit the criptocurrency's use. So, why is it?

The ICO might recall the bubble of the 'dot com' or the one of the 'CDO'. A strong trust that quickly and went in depression. But the bubbles actually led to the technological evolution of the last decades.
Into the bubbles, new models are built and quickly destroyed; so when it happens, a new paradigm is built, just to be more effective.
In these cases, the trader's psychology is everything. The question is: Does the market, the 'primordial' market, reflect the assumption of transparency, or is it led by somebody? And if somebody dominates the market, who is hidden in the shadow?

We are going to answer to questions of this kind avere Week and this is the first piece of a special series about the Fintech. We are going to be careful in our analysis, getting a great support in the data analysis and having a special care for the Italian Fintech ecosystem.
It is important to notice that in the year 2016, more than $ 25 billion have been collected by Fintech startup all over the world, with 2,2 billion only in Europe. Italy lays behind on this list.

Fintech still reminding the wild west, and it seems that without a deal with the big players, - including governments - it would be hard to survive for this business area.

We don't stop talking about the revolution of Fintech and legal tech, although many startups have been defeated. To say it with the words of Frodo Beggins: 'Jack, get ready to die. Now we count until one thousand and then we shoot!' 'Why should we count until one thousand, Joe?' 'because in the meantime I will go home to pick the gun I forgot'

Update to 1 September 2017

Antonio Simeone

@simeoneantonio1

simeonea@luiss.it

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