It’s astonishing to see how quickly technology is changing things.  Two things that jump out at me and have certainly received a lot of media attention lately are drones and Bitcoin.

A lot of companies, including Amazon, are testing the use of drones to deliver packages to your home.  It seems so futuristic to think about!  The Senate has asked the FAA to create guidelines to integrate drones into the airspace by 2015 and are set to review Amazon’s request next week.  Most of the early companies jumping into development are still very small and aren’t publicly traded.  However, earlier this year I bought stock for clients in a company called Aerovironment which currently develops small, handheld UAV’s for the military.  They’re not exactly set to benefit from this right now but you never know – if the opportunity to expand to the commercial market presents itself, Aerovironment should have a jump on new entrants since it already develops smaller drones.  The downside to this story is that it’s yet again another example of technology eliminating jobs (sorry US Postal Service, UPS and FedEx).

As for Bitcoin, I’ve looked into it quite a bit and I’m personally not comfortable with putting my own money in it (yet).  My biggest concern is that nearly half of the exchanges have been hacked or shut down with Bitcoins vanishing (i.e. your money disappears).

There’s no doubt that society has been transitioning away from physical cash for years now as technology continues to change the world.  Most people pay for everything with either a credit card or electronically (Paypal, Google Wallet on their phone, etc.)  The government is also pushing hard to move money to fully electronic.  No, it’s not because it would save money by not having to mint new currency every year.  It’s because…drumroll please….taxes!  Think of the underground, under-the-table cash economy that avoids income and employment taxes.  By making money electronic, they will have the ability to track and tax everything.

But do I actually think the government will let society transition to Bitcoin – an open system that they can’t control?  No way.  My current opinion is that Congress will eventually make it illegal to use.  They’ll probably come up with some law about using a means of payment that’s not legal tender backed the government.  And then they’ll institute their own version of Bitcoin that’s essentially the same thing but allows them the ability to control and manipulate it.  Let’s be real, the government will never adopt a system that puts a cap on the supply of money, as Bitcoin currently does.  This week, China announced that the Central Bank of China will not back Bitcoin but citizens can use it at their own risk.

I definitely see society continuing towards electronic forms of currency, opening investment opportunities in companies that handle everything from electronic processing to security.  But unfortunately I don’t think Bitcoin will be a major player in that future.  They’re certainly a pioneer showing us all of the possibilities but unfortunately being the first emergent company will make them the target of the government.

Thanks for following!

Nick