The Digital Currency Revolution

While Bitcoin holds the top spot in terms of market capitalization, the broader altcoin asset class has seen the total cryptocurrency market capitalization expand by nearly 800% so far.

This growth amounts to a market capitalization of $158.5 billion, which is currently 795% higher than the previous year. This market capitalization positions cryptocurrencies above many national currencies as well as other major payment networks.

Widespread Interest

Bitcoin, as the most well-known digital currency, has recently experienced massive growth following the successful implementation of SegWit. However, while Bitcoin's market capitalization accounts for just under 50% of the total, it is the overall interest in a wide range of altcoins that is driving the total capitalization higher.

In fact, some coins are seeing such sharp increases that they surprise even seasoned community members. For example, Dogecoin, which started as a joke, now has a market capitalization of nearly $200 million.

Others, like Bitcoin Cash—a recent hard fork of the original Bitcoin—have continued to grow, despite initial skepticism after August 1. Bitcoin Cash recently surged to nearly $800 as miners saw profitability in the new currency.

Expert Interview

CECBARIO Magazine 17: Read the following interview with experts Alessandro Carvalho and Wilson Andrade to learn more about digital currencies.

QéQ: What impact do digital currencies have on the world and technology?

Wilson Andrade: Bitcoin (BTC) is one of the most well-known and widely used digital currencies for online transactions. In addition to Bitcoin, there are other currencies like Ethereum, which do not require banks or intermediaries to circulate on the internet. Each user can create online wallets to manage their money, as well as make purchases from major market players, such as art galleries in São Paulo, short-term apartment rentals in Rio de Janeiro, inns in Aracaju, and even large tech companies like Microsoft and Dell. An underlying technology of digital currency is Blockchain, which ensures transaction authenticity and security in a decentralized manner, using the concept of distributed computing.

Companies are beginning to understand the benefits and ability to provide transparent, censorship-free services for various purposes, such as land authenticity verification, music and art copyrights, and contract formalization. Smart Contracts allow business rules to be registered in a distributed manner, independent of national laws or regional regulations, ensuring global control. These innovations create significant impacts by enabling new business models that drive technological and economic growth worldwide.

QéQ: How can digital currencies or cryptocurrencies boost the economies of Brazil and Argentina?

Alessandro Carvalho: As of August 8, 2017, the digital currency market capitalization reached a record $120 billion. It continues to rise, driven by Bitcoin, the leading digital financial asset. Banks that fail to invest in these new technologies will lose market space to Fintechs, disruptive companies offering financial products that allow users to buy, sell, and manage digital currencies or even operate investment funds directly from their mobile devices.

Currently, more than 800 cryptocurrencies are traded on hundreds of online exchanges operating 24/7. In addition to being a great investment opportunity, where some coins yield over 100% returns in a short time, each economic sector could eventually launch its own digital currency. Imagine a cryptocurrency designed specifically for agribusiness, backed by Bitcoin.

The speed of transactions would reduce costs and make everything more dynamic, increasing profitability. Moreover, international trade would see exponential growth. Recently, several investment funds have started allocating a portion of their portfolios to digital currencies.

QéQ: How much more can this industry grow?

Alessandro Carvalho: Everything is still in its early stages. The digital currency market capitalization has skyrocketed since February 2017. By 2020, it could surpass the trillion-dollar mark. The opportunity to invest, acquire digital financial assets, or even launch a personal cryptocurrency presents a chance to build the foundation of a brand-new economic phenomenon. Everything is done quickly and securely via an internet-connected computer. Banks that do not invest in these technologies will lose market space to Fintechs, which provide innovative and accessible solutions for digital currency transactions and investment management via mobile apps.

About the Experts

Alessandro Carvalho holds a degree in Economics from UERJ, a Law degree from UFRJ, and a Master’s in Political Science from UFF. He served as a political consultant and parliamentary advisor until 2016. A fintech enthusiast and cryptocurrency investor, he is the founder of the cryptocurrency investment fund INVEX.

Wilson F. D. de Andrade is a systems analyst, PMI member, certified in Project Management by Dinsmore Associates, and holds an Executive MBA in Data Warehouse and Business Intelligence from IDHGE. He is the founder of DW2 Software, a company focused on business strategy and information technology, and serves as Vice President of the Brazil-Argentina Chamber of Commerce.