Cryptocurrency, specifically Bitcoin, has the potential to shift the economic disparity between the west and the developing world. As Mark Zuckerberg attempts to bring connectivity and WiFi to our entire planet via Internet.org, and Google seeks the same lofty goal with Project Loon, the question still remains - is it enough?
We are entering a reality where three billion of the world's poorest people have access to smartphones but not to traditional financial services. That means despite digital connectivity, the world's poorest remain unable to send and receive money via financial institutions, visit their local bank or write a check. The economic and human implications of lack of financial opportunity are huge and virtual currency may just be our great equaliser.
There has been much conjecture and some derision of cryptocurrencies, primarily owing to volatility and the perception that the use case remains limited to speculative trades for investors and early adopters, mostly within the software development community. In short, rich geeks. Up until now this may have been correct as 80 per cent of the Bitcoin use case comprised of investors trading the asset in much the same way as gold, in turn creating volatility and price fluctuations.
But this appears to be changing. Rather than focusing on price, let's look at transactions as a key metric. Over the last year, Bitcoin activity has doubled to 100,000 transactions daily. As the numbers continue to grow, the use case will flip, with an emphasis on the practical applications of users seeking a faster, cheaper decentralized payment system, and true digital currency.
It's already started. In the Philippines and parts of Western Africa, phone minutes serve as virtual currency, used to pay for food, to barter livestock and even land. If you can't access a bank, which after all is the reality for the vast majority of the planet, virtual currency provides solutions.
Bitcoin is becoming increasingly easy to use, no longer requiring a computer science degree to navigate private encryption keys. We are in the early stages of an emerging new currency system, and I see the community at my start-up Ideapod.com, as being some of the most passionate proponents and critics for this decentralized, highly liquid alternative. Check out Ideapod user Jared Janes' video.
To naysayers less enthusiastic about the application and growth of crypto currency beyond hackers, I would argue that an early indicator of mass scale future consumer adoption has traditionally been the technology community. Linux, now the most used software in the world, began in the development community among a small group of dedicated early adopters. Similarly, Android initially was utilized only by tech engineers before becoming the most popular mobile operating system for consumers.
For these reasons, and while listening to the ongoing debate on Ideapod, I am excited for the future of cryptocurrencies. My money's on Bitcoin as a hugely disruptive force for good, with practical applications that could bring finance to the masses, and inclusion to those currently left out of our global banking system. Cryptocurrency may just be the great equaliser that so many have been seeking.