Crytocurrency in Gibraltar and Bitcoin in Gibraltar
What is cryptocurrency and why is it a big deal in 2018 for Gibraltar
One of the biggest things to emerge from 2017 is that suddenly everyone knows the phrase ‘Bitcoin’ but what is it and what does it mean to Gibraltar?
What only a small number of people know is that cryptocurrencies first emerged as result of another invention and grew through the use of a now illegal website call 'Silk Road' on the dark web. The unidentified inventor of Bitcoin, Satoshi Nakamoto, which is the first and still most important cryptocurrency, never intended to invent a currency but ultimately managed to make something, that many others had tried and failed to do - digital cash.
In an early announcement about Bitcoin in 2008, Satoshi said he had a developed “A Peer-to-Peer Electronic Cash System.“ He had found a way to build a decentralized digital cash system and the reason he was able to do this is a slightly complex thing to explain so, let‘s try to make it as easy as possible: To create digital cash you need a payment network with accounts, balances, and transaction but one major problem every payment network has to solve is to prevent the so-called double spending: to prevent that one entity spends the same amount twice. Usually, this is done by a central server who keeps record about the balances such as a central bank.
Bitcoin operates in a decentralized network, which means it does not have this server. So you need every single entity (peers) of the Bitcoin network to do this job. Every peer in the network needs to have a list with all transactions, to check if future transactions are valid or an attempt to double spend. If the peers of the network disagree about only one single, minor balance, everything is broken. They need an absolute consensus which maintains integrity over the transactions and stops fraud. Usually, you take, again, a central authority (like a government run central bank) to declare the correct state of balances. But how can you achieve consensus without a central authority?
Nobody did know until Satoshi emerged out of nowhere. In fact, nobody believed it was even possible. Satoshi proved it was. His major innovation was to achieve consensus without a central authority. Cryptocurrencies are a part of this solution – the part that made the solution thrilling, fascinating and helped it to roll over the world.
What are cryptocurrencies really?
Take the money in your bank account: What is it more than entries in a database that you can see on your bank statement? Obviously you can hold physical currency like coins and notes but ultimately these will trace back to your bank statement as a withdrawal from an ATM for example. So crytocurrencies are just a way of digitally paying someone without using a bank note.
So how does Gibraltar fit into this cytocurrency puzzle?
The legal status of cryptocurrencies varies substantially from country to country and is still undefined or changing in many of them. While some countries have explicitly allowed the use and trade of crytopcurrencies, others have banned or restricted it. Likewise, various government agencies, departments, and courts have classified bitcoins differently. China Central Bank banned the handling of bitcoins by financial institutions in China during an extremely fast adoption period in early 2014.In Russia, though cryptocurrencies are legal, it is illegal to actually purchase goods with any currency other than the Russian ruble. So at a time when regulators in the U.S. and Canada are putting in strict rules for ICOs, or even banning them outright like China, Gibraltar has seen an opportunity by positioning itself to be an attractive destination for upcoming ICOs (cryptocurrency starts ups).
A mechanism tailored to protect customers of cryptocurrency businesses in Gibraltar, and its own reputation, went into effect on 1st January 2018, thus becoming the first jurisdiction in the world to do so. The regulation targets blockchain technology companies storing and transmitting value can now be licensed by the Gibraltar Financial Services Commission (GFSC). The Digital Ledger Technology (DLT) Regulatory Framework has been introduced after the Legislature of Gibraltar approved a bill designed to update its financial services regulations. It laid down the foundation for new legislation governing the cryptocurrency sector in the territory.
So what does this mean for job opportunities in cryptocurrency in Gibraltar?
Any company will need core staff to help it function so most companies will need an office administrator or secretary, an accountant and general office support staff. Over time depending on the growth of the industry then the ICOs may start to look for blockchain developers and general tech staff to help the growth of their cryptocurrency businesses.