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Bitcoin, other cryptocurrencies, blockchain, and most recently initial coin offerings (ICOs) are expected to have a far-reaching impact on the global economy—eventually. Blockchain use cases are rapidly emerging in various industries, and startup businesses continue to announce ICOs as an alternative means of raising capital, even amidst regulatory investigations. While some see these technologies as obscure, or even faddish, others expect distributed ledger technologies to end up changing our economic and social systems in some truly fundamental ways.

Still, some treasury and finance managers’ understanding of these technologies is plagued by misconceptions. Key among these is the idea that blockchain, bitcoin, cryptocurrency, and ICOs are interchangeable terms.

A cryptocurrency is, essentially, a decentralized alternative to the fiat currencies that are backed by central governments. It utilizes technology to generate money and verify transactions. Cryptocurrency utilization started in 2008, when Satoshi Nakamoto, an anonymous person or group, released a white paper detailing a peer-to-peer electronic cash system that would allow direct online payments that wouldn’t pass through a financial institution. Despite some bad press due to perceived connections to an online black market, as well as well-publicized hacks, cryptocurrency utilization has become much more common over the past decade. In the fourth quarter of 2017, the market cap for all cryptocurrencies broke $600 billion—nearly as much as the GDP of Argentina—according to coindesk.


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