Europe Entering Potential Golden Age of Blockchain and Bitcoin

John Tuttle

Blockchain, designed to serve as a sort of transaction log for Bitcoin cryptocurrency, has been around for just over a decade, being announced in 2008. (Bitcoin became available and was in circulation by 2009.) As of December of last year, close to 32 million Bitcoin wallets have been established on a worldwide perspective.

European governments were aware of the new cryptocurrency, and some seemed to examine it in a healthy mindset of caution. However, the premier Bitcoin exchange company of Europe, Paymium, was already set up by 2011. Elsewhere, in the U.S. for example, it took until 2013 for the United States Treasury to provide official classification for Bitcoin, after which a number of other legalities had to be worked out. Since then, some of the country’s biggest companies such as Microsoft have adopted the use of bitcoins.

In late 2014, the European Parliamentary Research Service (EPRS) issued a briefing that sought to define Bitcoin as well as to discuss some of the possible risks in using it. The briefing calls Bitcoin “an electronic peer-to-peer (i.e. with no third party being involved) payment network and a digital currency.” Furthermore, the report drew attention to the fact that one of the digital currency’s characteristics was its high volatility. In other words, there are many documented instances where the monetary amount that bitcoins are worth fluctuates drastically.

The briefing also made note of the security dilemmas Bitcoin can lead to. It particularly highlighted an early exchange called Mt. Gox, stating “Mt. Gox started as an exchange platform for a fantasy game and became a main Bitcoin-to-money exchange system in 2010. In 2011 Mt. Gox was hacked, and over 60,000 usernames and passwords were stolen.” The 2014 EPRS release went on to show that Mt. Gox got hacked yet again three years after the first incident.

Even authorities on Bitcoin express a word of warning, advocating firstly for Bitcoin education accompanied with the knowledge that this type of investment always comes with high risk attached. One of the popular methods for investing in cryptocurrencies such as Bitcoin is through an initial coin offering (ICO). It is a simple investment gamble: buying low in the hopes that the value will begin to rise. But as a rule in the investing landscape, ICO’s come at a greater risk than IPO’s (initial public offerings).

Acknowledging these risks and in spite of them, Forbes’ writer Bernard Marr reported in 2017, “If you had invested $1,000 in Bitcoin in 2011, you would have £36.7 million now.” Investing in bitcoins is seen by many to be just as dangerous as buying tickets in the lottery. Yet, even in the lottery, there are winners. Similarly, Bitcoin certainly has winners among its ranks of users.

By the age of 18, entrepreneur Erik Finman had become a bitcoin millionaire. As MarketWatch notes, in wake of his success, the young man “harbors an unusually upbeat prediction for the enterprising few, willing to take a chance on bitcoin and blockchain.” On Friday, Finman tweeted, “Where you invest your money is a reflection of your beliefs. Investing only in stocks, bonds, and banks shows that you believe the status quo will remain forever. Investing in crypto shows that you know change is coming, and you don’t want to be left behind.”

Speaking from experience, Finman is urging people to invest in Bitcoin as well as alternative coin cryptocurrencies. And he makes this professional suggestion in a potently optimistic and hopeful way. Erik Finman is an oddity, but he is not alone in his bitcoin success. Actually, many of the cryptocurrency millionaires have been associated with Silicon Valley companies or their rivals. Various Asian nationalities including China and Japan have taken a genuine, enthusiastic interest in bitcoins and altcoins. More recently, several Candian crypto companies have made a big impact on the industry. Joseph Lubin, for example, has been a rather successful crypto entrepreneur in Canada.

However, when it comes to many areas of Europe, the business of Bitcoin and other cryptocurrencies has either been unfruitful or simply unexplored. In recent years, changes have been implemented that offer hope that the endeavor may see some action in untapped countries of Europe.

The American Jim Breyer’s company, Breyer Capital, has not only invested in numerous crypto endeavors but has also spread its influence to the continents of Europe, Asia, and South America. The majority of Bitcoin exchange companies, since the currency is in digital form, are willing to entertain crypto interactions throughout various countries and continents. Many will talk business with potential investors based in the UK or elsewhere in Europe. Apart from Paymium (which was mentioned earlier), there are a number of other Europe-based exchanges – such as CryptoPay and Cubits which are based out of the UK.

In April 2018, Norway, along with over a dozen and a half member states of the European Union, assembled to form the European Blockchain Partnership (EBP) and to participate in building the foundations of what has been dubbed the European Blockchain Services Infrastructure (EBSI).

The EBSI’s existence is to be dedicated to promoting and helping distribute cross-border public digital services. Since the EBP’s founding, several more countries have joined the partnership. Among these latecomers was Italy, which signed the partnership declaration on September 27, 2018. One of the most recent countries to have joined the EBP was Liechtenstein on February 1, 2019.

The open acceptance and liberty to use blockchain in an increasing number of European nations is a healthy sign. (Blockchain serves as an ever-increasing series of blocks connected via cryptography and has found a chief use in cryptocurrency transactions.) It aids in the further development of Bitcoin and cryptocurrency as a whole in European districts. But blockchain is not restricted to its use with digital currencies. Its astonishing benefits can be employed in other fields.

One of blockchain’s characteristics is its lack of transaction fees. There simply aren’t any, meaning transactions carried out via blockchains do not involve any third party intervention. Other areas which could employ blockchain to their advantage include such systems as a distributed database, an insurance-claim payout, a cash-equity trade, a cross-border peer-to-peer payment, etc. A survey of the World Economic Forum done a few years ago has suggested 10% of the worldwide Gross Domestic Product shall be stored with the use of blockchains.

Not only do the expanding applications of blockchain appear to be promising, but Bitcoin, the cryptocurrency which blockchain was originally designed to monitor, might be given a sketchy appearance to outsiders deliberately in order to dissuade those interested in investing.

Bernard Marr of Forbes also makes the observation that Bitcoin advocates point to the foundational technology of Bitcoin, blockchain, as undermining big investors’ basic business principles. This relation, some believe, may be cause enough for such businessmen to purposefully portray cryptocurrencies, particularly Bitcoin, as some impenetrable fortress encircled with traps all around.

So, while there are high dangers involved in Bitcoin investment, as with many investments, Bitcoin is a unique venture, one undertaken digitally and tracked via blockchain. With many members of the European Union joining forces to promote blockchain, a bright future of cryptography, digital storage and transfers, and cryptocurrency is being sought by European powers. This nearby future is ripe for the picking.