“I own some Bitcoin,” one reader, David G. wrote, “and would like to read more about its use now and in the future. I’d like to know more about its potential as a currency.”
On Monday, we asked you and your fellow LFT patrons to pick today’s topic.
You spoke. We listened. Bitcoin it is.
(If you wrote in with a different topic, don’t worry. We’ll try to get to it as soon as we can.)
Here’s why we think Bitcoin — and cryptocurrencies in general — stand to become increasingly more accepted in the coming years…
First, we’ll use a personal example…
Recently, we started a crowdfunding page to raise money for a local cause.
The charity crowdfunding page we used is free… but the transactions are not.
Why? Because credit card companies demand 3% per transaction. Which, in your editor’s opinion, is ridiculously high for what is essentially sending an email.
Luckily, an alternative is forming… the cryptocurrency. Cryptocurrencies, in short, are a way to cut out the middleman and send money instantly, all over the world, for free.
But, thing is… the revolution will not be Americanized.
Developing countries are adapting cryptocurrencies and alternative digital payments at a much faster pace.
And there are two reasons why…
One: Nearly 50% of people within developing countries don’t have bank accounts.
And two: mobile technology is becoming ubiquitous, and, along with it, mobile banking. In much of Africa, sending money via text message (for a micro-fee) is a common occurrence.
The next natural progression, then, is the creation and usage of digital currencies without the need of a middleman or the payment of fees.
Which is where bitcoin, or other currencies, step in.
Bitcoin is defined as “the first decentralized peer-to-peer payment network that is powered by its users with no central authority or middlemen.”
This in itself is revolutionary.
Governments have always controlled currency.
Today, our government dictates how the currency is transferred. It tracks the movement. It wants to decide who profits when and where. It wants to collect taxes on its every transaction. And it wants to trace all criminal activity through it (except for its own, of course).
With cryptocurrencies, though, this level of control is impossible.
“If bitcoin or another cryptocurrency become widely adopted,” says Investopedia, “the entire banking system could become irrelevant.”
And why wouldn’t we want that? After all, as Investopedia points out, “central bank tinkering with the money supply has induced recessions, exacerbated unemployment, and given rise to a global banking system based on profiteering and corruption.”
But where our government-sanctioned currencies have failed, cryptocurrencies are slowly stepping in to fill in the gap.
As one example…
“In Ukraine,” Liat Clark writes in the web pages of Wired, “during the three-month protest in Kiev’s Independence Square in 2013-2014, activists managed to fund their activities by plastering QR codes on their signs, which led supporters of the cause to a Bitcoin address.”
And Ukraine isn’t the only country finding ways to use the cryptocurrency.
Let’s take a look around the world at cryptocurrencies in general, and then circle back to the Western world and look at Bitcoin.
First stop, the Motherland… Africa.
Picture source: Bitcoin Magazine
“The continent of Africa, in particular Ghana,” Bitcoin Magazine reads, “is set to open doors of opportunity to a land perceived as hopeless in the eyes of many.
“The Internet has provided decentralized information that allows some of these marginalized populations to educate themselves, and the development of the blockchain represents decentralized wealth controllable by the people.”
Africa is an entire continent prime for the use of cryptocurrencies. One crypto to watch, for example, is Dreamcoin.
Dreamcoin, according to its creator, Phillip Agyei Asare, is “a community cryptocurrency being designed for merchants and consumers in sub-Saharan Africa.”
Phillip is also founder of The Dream-Bitcoin Foundation which, he says, “will help empower and unite the youth in Ghana, and Africa in general, to successfully enter entrepreneurship through acquiring an education in Bitcoin and Blockchain and cryptocurrencies and creating their adoption throughout the country.
“Together with partners from other African nations, the adoption of Bitcoin will be made easier via SMS.”
“Africa,” Phillip says, “will become a pioneer in the adoption of cryptocurrencies, and benefit accordingly in this new, emerging economy.”
Now let’s pan east and zoom into Indonesia…
“…in a country where many people don’t have bank accounts or credit cards,” Resty Woro Yunar writes in the Wall Street Journal blogs, “and money transfers often involve high transactions fees, more individuals are overlooking the criticisms and focusing on how to use the technology to their benefit.
“Most Indonesians currently use bitcoin to pay for services online, such as web hosting. They can also use the digital currency to book hotel rooms through travel websites hosted overseas rather than use credit cards, which only a small percentage of the population currently own.”
“Indonesia’s central bank doesn’t recognize bitcoin as a legal form of currency and has warned people to use it at their own risk, but a number of startups have formed or are offering bitcoin services to Southeast Asia’s largest economy to take advantage of its growing popularity.”
OK. Now, let’s look at the Middle East… to Afghanistan…
“The social and economic barriers that women in developing countries face everyday are disheartening,” Coindesk writes. “Even though women’s rights in Afghanistan have taken many positive steps forward since the end of Taliban rule in 2001, they remain at astounding odds with the standard found elsewhere in the world.
“Afghanistan’s patriarchal society deplores the autonomy of women. Families commonly object to their girls’ employment, education or any pursuit that could make their control over themselves and their interests louder.
“Although the statistics for female education have improved greatly over the last decade, families often make their girls leave school in their early or pre-teen years. And while it’s considered unacceptable for girls to be taught by men without the presence of women, there’s a lack of female teachers.”
Enter Women’s Annex Foundation (WAF).
WAF, Macheel writes, “encourages girls to think independently and discerningly through blog writing, software development, video production and social media. It gives them a platform to send their ideas into the world that both pays for them in bitcoin and provides free Web access in a safe place.”
Co-founder Fereshteh Forough says: “We want to teach the girls how they can use education combining the tools that they have — social media and technology — and create their own sustainable economy.”
WAF also operates in Pakistan, Egypt, and Mexico and has 60,000 users worldwide — 6,000 of which are Afghan.
[Learn more about how they — with the help of Bitcoin — are changing the game for Afghan women here.]
Aside from the game-changing implications of Bitcoin for the rest of the world, there are reasons to be bullish about it as an American…
Here are five, according to Visual Capitalist…
And, of course, there’s the blockchain…
But that’s worthy of another episode in and of itself. So we’ll save that one for later.
In the meantime, consider this…
Just because bitcoin doesn’t seem to be making waves here in our home country, doesn’t mean it’s not taking many parts of the world by storm.
The world is changing. And the U.S. is, by and large, no longer the major trendsetter. If you want to seek out major trends, look at what many developing countries are doing.
Because, whether they know it or not, they’re building the future from scratch.