This week, we are seeing volatility in the major cryptocurrencies on the market. Bitcoin has dropped a further 12% on Wednesday, marking an almost halving of its value from its peak price in 2017.
According to UBS, cryptocurrencies like Bitcoin are in a speculative bubble and are unlikely to become mainstream currencies. “We think the sharp rise in cryptocurrency valuations in recent months is a speculative bubble,” UBS wrote in a white paper published last year.
“The speculative nature of Bitcoin and Ethereum lends itself to market volatility and large price swings. Making it a speculative instrument, not a daily transactional currency,” stated Clayton Moore, CEO of NetCents Technology. “That is why the NetCents Coin is backed by the treasury reserve which is managed by the non-profit organization NCCF. It is meant to be a consistent store of value and used for transactions with users and merchants.”
A recent article in the January 2018 edition of Scientific American delved in detail into the future of money and the effect of digital currencies will have on the current fractional banking system in general. While Bitcoin is a good “first go” at a digital currency the speculative nature of it makes unpractical for widespread use as a medium of exchange.
Moore added, “This price volatility and speculation is why the NetCents Coin was created and backed with the treasury reserve to maintain coin integrity and stable coin pricing. The introduction of our currency through a structured release algorithm ensures that the NetCents Coin and NC Exchange remains an equal opportunity, true exchange medium for the masses by incorporating these major elements: structured release system, rigorous supply management, and treasury reserve.”
He closed by saying, “NetCents is not dependent on the success of other cryptocurrencies. Our business model is transaction based and our coin allows us to process digital payments in a cost-effective manner. Our focus is, and will continue to be on our users, merchants and rolling it out as a transactional currency”