Thursday, July 4, 2013

Creating some real value behind digital currencies

While algorithmic trading is moving into the cloud, the cloud is moving into stock exchange :)

Deutsche Boerse is going to start Cloud Exchange, when it will be possible to trade processing power and storage.

It may be interesting to know what entities will be buying computing resources, and if the demand for the resources increases in volatile or in calm times on the markets.

As I wrote a little ago, it may be more difficult to generate higher investment returns in times of low market volatility.

Also, the computation exchange may give some more tangible value to Bitcoin and other crypto or rather digital currencies, that depend on spending processing power on solving difficult mathematical problems. It may even create some possibilities for arbitrage between the price of processing power and the price of the crypto currencies.

Still, I dislike the idea of spending processor cycles and hence burning electricty just for solving some artificial riddles, instead of doing some beneficial computing-intensive calculations, like Folding@Home.

Maybe the introduction of Cloud Exchange will be the first step for creating some more solid fundations for digital currencies.


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