The Year of Cryptocurrencies 2017 | U.S. Congress Report | Part 1

The US Congress released a joint report on the state of the economy and for the first time, there is an entire chapter dedicated to cryptocurrencies.

Here are some of the most interesting aspects of the new report. Some are surprisingly bullish but they remain well grounded, with a clear sight of the threats and potential dangers.

Hype for Blockchain Resembles the one Surrounding the Start of the Internet

“The buzz surrounding digital currencies resembles the internet excitement in the late 1990s when people recognized technology companies could change the world. Many internet companies launched and their valuations took off in short order. Many failed, but a few succeeded spectacularly and challenged the conventional ways of doing business.”

Dangers with Volatility

“Extreme volatility in the dollar price of cryptocurrencies also impairs their use as money because people price goods and services in dollars and thus their purchasing power fluctuates wildly. In order to value items in terms of bitcoin, ether, or ripple, the dollar exchange values of these units would have to stabilize. The dollar loses about two percent of its value per year due to inflation, but its purchasing power loss is modest and predictable so people can incorporate it in their decisions.”

Cryptocurrencies as a better solution than money according to critics

“Some critics of currencies controlled by government fiat welcome cryptocurrencies because their supply is preprogrammed and perceived as unchangeable. For example, only 21 million
bitcoins will ever be issued and the last fraction of a bitcoin will be issued in approximately 2140. Additionally, the creator of Ethereum designed its mining reward to decline exponentially as
more miners create blocks, and according to his calculations the supply will be just over 100 million ether.”

State of ICOs

“Before 2017, developers raised just under $300 million in funding for ICO projects. During 2017, developers raised over $5.3 billion for new token companies. Such capital includes a plethora of projects and ideas.”

Security and Efficiency in Blockchain Technology

“Cryptocurrencies and ICOs create headlines, and the pace of financial innovation in the blockchain space amazes skeptics. Yet, with all the headlines focusing on the financial applications, people may miss the digital revolution now happening with other blockchain applications.Blockchain technology offers a decentralized, secure, and efficient way to store almost any form of data across multiple platforms.”

Helpful applications of blockchain technology

“Developers, companies, and governments recognize the potential and have already starting to implement blockchains for many different uses. For instance, health care providers, patients, and policymakers continue searching for portable and secure ways to store medical records digitally. On a Joint Economic Committee podcast, Committee member Representative David Schweikert described 212 how healthcare companies are already researching blockchains as a secure way to keep medical records on personal smartphones or within provider networks, and what this advance could mean for America’s future:428

[M]edical records have no value if they don’t move with you. So think of if I could put my medical records on a blockchain where just like on many phones, I could use my thumbprint and a password and with a certain type of encryption…It would be HIPAA [Health Insurance Portability and Accountability Act, which includes patient privacy protections] compliant. Now all of a sudden you and I and the rest of society can carry their medical records on their phone.429

Unlike many innovations that attempt to skirt laws or regulations and become associated with the underground, these new blockchain products attempt to comply with the current system and even work together with regulators. The new products range from coordinating payment (healthnexus),430 monitoring and rewarding patients for following clinical recommendations (RoboMed Network),431 tracking pharmaceuticals along the supply chain (MediLedger),432 and even identifying specific supply chain problems such as those associated with the opioid crisis (BlockMedx).433”