Like it or not, cryptocurrencies here to stayCity Talk | 17 Nov 2017
Money serves two functions. It is a medium of exchange and, at the same time, a store of value.
Some economists, most notably the Austrian School, insist that money is, first and foremost, a medium of exchange and that its function as a store of value is only secondary.
Ironically, even when gold and silver ceased to serve as a common medium of exchange, many self-proclaimed Austrians still hoard the metals as a safeguard against inflation involving fiat currencies.
Many Austrians have, however, been converts to the church of cryptocurrencies since its first incarnation as bitcoin.
Recently, many new cryptocurrencies are appearing by way of initial coin offerings. As the market phenomenon gets entrenched and demand for old cryptocurrencies increases, prices surge.
There is an ongoing debate over whether cryptocurrencies are experiencing a bubble. I think that is too soon to call.
But it is certain that some ICOs are more interesting than others.
For instance, LikeCoin, a cryptocurrency based on ethereum, has the goal of facilitating the market for user- generated content.
It will be launched with a super early bird offer next week.
I talked LikeCoin's founder, nicknamed Ko Kin, about the idea. He also demonstrated to me how LikeCoin operates.
Instead of applause and "likes," followers can reward people who post creative content with LikeCoin.
But the bigger picture for LikeCoin is to facilitate the emergence of a marketplace for content creators to use and combine the work contributed by other people.
In theory, everyone taking part in the final product shall be rewarded, as LikeCoin also serves as a proof of a stake.
It is going to be a paradigm shift in the way that copyright owners profit from use of their work, provided the project is successful.
LikeCoin is only one of the examples of how disruptive FinTech can be.
It is more than just a new way of paying people but a fundamental change in how we understand legal concepts such as ownership.
Most importantly, its success will serve as an example of how the invention of a new medium of exchange eventually becomes a store of value and leads to the emergence of a unique market ecosystem.
Simon Lee is a business consultant