Cryptocurrencies: Safe Haven During Tumultuous Times?

As digital money endures wild ups and downs, here’s a system that should survive the crypto “shake out.” It could also prove a safe haven during these tumultuous times.

Cryptocurrencies have endured a rough 2018 so far. The value of Bitcoin has plunged to a mere 50% of its 2017 peak. Other currencies, such as Ethereum, Ripple, and Litecoin have witnessed double-digit losses compared to their heights in 2017.

The declines underscore the volatility of cryptocurrency. But broad stock markets are overvalued and could face a correction as well. The fact is, digital money is here to stay. Below, we highlight a new and arguably more enduring way to play the crypto trend.

Cryptocurrency is becoming “digital gold.” As such, it could prove a safe haven in times of crisis. Its value can’t be tied to inflation in the U.S., foreign government reserves, or any other metric that affects the value of traditional fiat. Despite the price gyrations of Bitcoin and its peers in recent days, cryptocurrency could actually be safer than physical money or conventional assets.

2008 Redux?

Think cryptocurrency is unreliable? Well, consider this: as of January 20, the U.S. federal government actually shut down. Congress couldn’t agree to funding. Dysfunctional politics in Washington, DC and rising geopolitical risks overseas underscore the value of an alternate means of value not tied to bureaucrats or politicians.

Digital money also is a defensive measure against inflation. Now’s the time to take protective measures against global inflation. After a long period of dormancy, global inflation shows signs of stirring.

Inflation shrinks the real rate of return on investments. If an investment earned 7% over a 12-month period and inflation averaged 1.5% over that time, the investment’s real rate of return would have been 5.5%.

As the inflation beast rattles its cage in 2018, investors will increasingly seek refuge in cryptocurrencies.

International debt also has reached worrisome levels. For example, China's $27 trillion mountain of public and private debt is a threat to the global economy. Asset prices around the world are in a bubble. Unmanageable debt combined with inflation could provide the pin to burst it.

Do we face another 2008 financial crisis? If so, cryptocurrencies would soar, as traditional markets collapsed.

The key is to find the right ways to invest in cryptocurrency.

Rather than represent another means of speculation tokens like MoxyOne conveys practical commercial applications for cryptocurrencies. These applications are familiar, long-standing business practices that have been brought into the 21^st century.

The best-known cryptocurrency, of course, is Bitcoin. To get Bitcoins and similar cryptocurrency tokens, you have to first set up a “wallet,” probably online at a site such as Blockchain.info. You then pay a willing seller the necessary hard currency to transfer the coins into that wallet. A growing number and variety of U.S. merchants are starting to accept cryptocurrency as payment.

Blockchains are showing commercial applications for businesses that need lightning-fast data storage.

A blockchain is an algorithm that acts as a public ledger for Bitcoin and other cryptocurrency transactions. Taking Bitcoin as an example, Internet users around the world run special software to compete to validate Bitcoin transactions and compile the transactions into a “block,” which is then added to the “chain.”

Consequently, a blockchain will continue to grow over time as more and more blocks are added to it. The first “miner” to successfully add a block to the chain is rewarded with new Bitcoins. The quantity of new Bitcoins issued over time will decline, which means the number of Bitcoins in circulation will be capped over time.

The great thing about blockchains is that it is practically impossible to manipulate them.

No one can alter the history once it’s added to the blockchain. Bitcoin (or another cryptocurrency) is actually where manipulation can take place. Since cryptocurrencies are still thinly traded, they are more easily manipulated by those with large enough holdings of the cryptocurrency to move the market in their desired direction.

Regardless, cryptocurrency is revolutionizing money. Rather than a reckless speculation, as its detractors claim, it’s actually empowering average consumers who don’t trust governments.

The shutdown of the U.S. government on January 20 validates this mistrust.

Real-World Viability

With companies like MoxyOne developing a financial infrastructure for its cryptocurrency that addresses concerns about the real-world viability of these tokens. The solution entails a “white labeling” service that allows companies to become partners and gives them access to the MoxyOne infrastructure.

MoxyOne’s token is called SPEND and it will be used on the MoxyOne platform as service fees. The company's wallet allows users to spend their tokens at merchants or withdraw fiat from ATMs around the world, in addition to other transactions such as electronic purchases.

The white labeling concept has been around a long time. It’s just never been applied to cryptocurrencies.

A white label is a product or service produced by one company that other companies rebrand to make it appear as if they had made it. Examples in the commercial world already abound.

MoxyOne is the first Australian company to offer white label services to any Initial Coin Offering (ICO) that plans to issue debit cards to their users. The system’s development begins soon in Australia, with purchases via electronic funds transfer at point of sale, or EFTPOS.

MoxyOne’s goal is to expand the system around the world within the next few years. It’s the sort of financially robust network for which cryptocurrency users have been clamoring.

Powering the MoxyOne system will be the Raiden Network. The Raiden Network is an off-blockchain scaling solution. It allows instantaneous scalable payments at low fees. Raiden complements the proven Ethereum blockchain and works with any token compatible with the Ethereum token standard (ERC20).

Raiden’s ultra-fast micropayments channel will allow the MoxyOne system to communicate with user wallets. By using blockchain solutions and payment networks such as the Raiden Network, MoxyOne seeks to enhance security and transaction speed without compromising ease of use.

MoxyOne’s network will be protected by the Gladius Network, a decentralized platform created to protect against distributed denial-of-service (DDoS) attacks.

At the completion of the token sale, MoxyOne will be listed on Cryptopia, an official exchange partner. MoxyOne aims to be listed on additional exchanges, notably IDEX and other free or pay-to-play exchanges, in the near future.

Investors can find reliable gains from these trends by focusing not on the glitzy stars of this new tech wave but on the solid companies that are bringing innovations to the field.

Well-established companies are positioned to benefit from the growing popularity of cryptocurrencies. They’re also likely candidates to use MoxyOne’s white labeling.

While Bitcoin may continue to be the cryptocurrency of choice, MoxyOne is an upstart with myriad new uses that leverage the cryptocurrency boom.

One key to spotting the beneficiaries is to recognize that blockchains require an incredibly large number of calculations, requiring extremely sophisticated software and either supercomputers or a large network of computers. Currently, the Bitcoin network makes more than one billion billion calculations per second, much more than the world’s fastest supercomputer.

Another key is to focus on companies that have already committed to using or are considering using cryptocurrencies or other applications of blockchains because these companies will be able to leverage the advantages of blockchains for a competitive edge.

And yet, to date, cryptocurrencies still aren’t considered a tradable commodity in most regions of the globe. MoxyOne’s network can solve this issue. Under the current cryptocurrency status quo, any person who wants to make purchases with cryptocurrencies must ensure the entity being paid accepts their tokens. But under the MoxyOne system, any user can pay with supported tokens that they own. These tokens in turn seamlessly convert and pay merchants in local fiat.

Crucial to the operation of the MoxyOne system are liquidity providers, which are individuals or companies that will provide equivalent fiat for the amount of purchase by a user. These providers are located in countries around the world and they’ll make foreign exchange fees obsolete. Cryptocurrencies and fiat will be exchanged at the domestic exchange rate, a huge plus for global users.

SPEND token holders will be able to make purchases even where cryptocurrencies aren’t accepted. Users will have access to a MoxyOne wallet and debit card and will be able to make withdrawals from compatible ATMs. A wallet prototype is being developed by the MoxyOne team and may be released prior to the token sale in early 2018. The pre-sale starts on February 8.

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.