Why does the world need cryptocurrencies? A comprehensive analysis
There are several reasons why people don't like cryptocurrencies; some people think it wastes a lot of energy, and some people think it is used for a lot of illegal activities. Of course, you can also think of many cryptocurrencies as a huge Ponzi scheme. .
So what's the point of "Cryptocurrency" when we already have credit / debit cards and Paypal ...
Technology is useful. Most people don't care how their smartphone or the Internet works, as long as they can benefit from what it does for them. So I will skip the "What is a blockchain" part and simply say:
Cryptocurrency aims to make people own banks
Basically, it allows people to stop relying on any institution to store value and send it from one place to another on the planet. This may seem simple, but its meaning is incredible.
Currently, more than 2 billion people still do not have bank accounts. Inclusive finance is the key to reducing poverty. If a bank is reluctant to give someone an account because it is considered a "cost" or "liability," that person will have a hard time participating in economic activity. Not to mention participating in the global economy.
Cryptocurrencies make people part of the global economy. No one, no borders, no banking or political power can deprive them of the right to store money, send money and receive money anywhere in the world.
Fast and free (international) national payments
I don't think I need to explain the huge benefits of not having to wait three days or even a week to complete international payments. Not to mention the high fees that some banks charge for this, which is quite groundbreaking.
Also, when you land abroad, don't think about getting terrible deals on those shady exchanges. If people around the world accept cryptocurrencies, you no longer have to worry about the wrong money you carry.
Please bear with me now and try to imagine that you only make a few dollars a day. You live in a developing country. Without a bank, you fight for survival. Your eldest daughter feels obliged to leave everything to work abroad to earn extra income, which is common in the Philippines and many African countries ...
Today is payday and your daughter abroad wants to send you her hard-earned money. She can save 60 euros, and you need at least 7 euros to send you by MoneyGram or Western Union:
At the time of writing, the official exchange rate is 1 Euro to 64.4 PHP. Western Union claims to have only 62.3 PHP on their website and they charge transaction fees of up to 4.9 Euros. In the end, the poorest people have been exploited twice. 7 euros is equivalent to 2 days of work for your father, which is simply intolerable.
But even worse:
Most people working abroad send large sums of money at one time to avoid transaction costs of 4.9 euros from small transactions and expensive or difficult transportation costs to cash deposit and withdrawal locations.
Beneficiaries in their hometown may live in banks far away and they need to receive the cash they send. Travel is difficult and expensive. In addition, workers abroad may have to pay expensive bus or train tickets to return to MoneyGram or the Post Office. Remember, if you don't have a bank account or credit card, you can't make online transactions unless a friend helps you.
So your daughter saved 1,000 euros in a few months and sent it all at once. She thought she got a better deal, but ended up paying 38 euros for the dishonest exchange rate!
This happens every day, and thousands of people need every euro or dollar to live. This hinders the development of the most vulnerable groups in the world. Worst of all: they have no choice!
Remember Edward Snowden revealing to the world that we are all being monitored by the National Security Agency's Prism Program (PRISM)?
Without cryptocurrencies, WikiLeaks may not even exist because they are denied having a bank account. Fortunately, as early as 2010, they accepted cryptocurrencies for this.
Whether you like WikiLeaks or not, they can continue to do what they are doing. No one can stop them, which is amazing. Most of us live in a relatively free country, but those less fortunate finally have a way to bypass their dictatorship or family.
In March 2013, the people of Cyprus no longer withdrew more than 100 euros per day. This is your own money, right? A few people or institutions should not be able to withdraw or stop millions of dollars of money.
We all know the phrase "follow the money". It's important to track large transactions, don't be fooled by the media; Bitcoin is actually 100% traceable. If you want to do something that doesn't look good, using Bitcoin is the worst idea. Every transaction has to be registered and verified by thousands of people. It is publicly visible and can never be changed or hidden.
However, there are some privacy-conscious currencies. They let you-just like cash-leave no trace. So, if you don't like anonymous coins, you should not "hate all cryptocurrencies." The user can choose, which is fine. Privacy is invaluable, even if you have nothing to hide.
In fact, I encourage public institutions such as government agencies, political parties, non-profit organizations, non-governmental organizations ... to use cross-border cryptocurrencies to increase their credibility. No one wants to see taxes being wasted, and no one wants to donate $ 100 to a disaster fund, but finds that less than $ 3 is really used to help people in need.
A new movement that will affect everyone
Cryptocurrency is decentralized, and no organization, no military force, can destroy it. To destroy Bitcoin, you need to destroy +150,000 Bitcoin nodes around the world. Most importantly, everything is open source, which means that hacking is almost impossible without a backdoor or malware.
Other than that, no one decides what the price will be. This is a global agreement between ordinary people. No war, political conflict or large-scale corruption can implode prices, and no one can manipulate it.
However, today we are still in a speculative stage, and fear or optimism can spread like wildfire, which has led to market volatility. But in the long run, I expect the situation to ease when cryptocurrencies reach a critical adoption with extremely high market caps. Also keep in mind that the price of Bitcoin relative to traditional currencies is very volatile today.
The truth is that today, a few rich or influential people can still manipulate the price of cryptocurrencies. Believe me: Many financial institutions and governments around the world are doing their best to destroy cryptocurrencies and prevent them from achieving their goals.
Maybe you don't know that the core of Bitcoin is a new "Occupy Wall Street" campaign, the purpose of which is to give financial power back and return it to the people.
In fact, Bitcoin was born in response to the global financial crisis of 2008.
The Internet brings freedom of information to the world, and Bitcoin and blockchain will bring financial freedom to the world.
A safer and cheaper world for merchants
We are about to enter a more honest world. Scammers have no chance to take advantage of cryptocurrencies and you can receive, prove and track any payment immediately.
Also, the cost of selling goods or services today is much higher than you think, do you know:
Every online transaction using Visa or PayPal will cost you (or a merchant) a lot of money. Spending 2.5% on a pair of shoes may not be much, but on a new $ 1,300 laptop, that number adds up. With cryptocurrency, we have the opportunity to 1) cut off the middleman and save every transaction, 2) service unavailable people (no bank, no valid credit card, people from "shady areas", etc.)
The cost of most PoS (point of sale) terminals is also quite high. If I remember correctly, the cost of accepting your card at terminal 1 is around 80 Euros per month. Imagine a large franchise store with 10 large stores, each with 5 cash registers; 4,000 eurotill carry additional fees.
If there is a small problem with "their" services, your business will lose revenue, and you will fall into a very difficult and expensive situation. It doesn't happen very often, but it does happen. Atos Worldline in Belgium had such a big blackout two days before Christmas, you can imagine the kind of chaos.
Another benefit is that as a consumer, you can always avoid the embarrassment of "Sorry, sir / madam, your credit card has been declined."
Accept payments in a simple way
Have you ever tried to set up a payment system in your online store? Taking a step back, this is a rather (expensive) hassle.
With solution like "Bitcoin Lightning", accepting cryptocurrencies in a website or store becomes very easy.
This will bring opportunities. Especially entrepreneurs who are still hesitant to start a business, because they can now open a store without any bank account or registration. They can accept payments immediately and serve audiences worldwide for free. When their business ideas seem to hit their targets, they can take the next step and embrace traditional payment methods.
With less hassle, less investment, less risk, entrepreneurship may bring more business, especially in developing countries.