If you’ve spent quite five minutes with one among us crypto believers, it’s likely you’ve been inundated with all the facts about why Bitcoin is that the future. These, sometimes unprompted, explanations usually delve into how innovative and transparent the open source technology is, which is all very true. We are a fanatical bunch, but this sometimes pushes us into quite “tunnel vision”. What if, for a flash , we zoomed out and took a glance at the larger picture, of how Bitcoin, blockchain and associated innovations could potentially fit into the larger scheme of things.
Shifting wealth dynamics:
We’ve often heard people rant on social media about “millennials”, but who are they? Technically, millennials are the generation born between 1981-1996, currently putting them between the ages of twenty-two and 37 years old. But what’s significant about them is that they will inherit some $68 trillion from their “baby boomer” parents, over subsequent decade. A wealth transfer so monumental that it’s been dubbed the “Great Wealth Transfer”. Creative, I know. Looking closer at what this generation tends to try to to with its wealth, will reveal that the typical cryptocurrency user is between 25 – 34 years old, with this group making up roughly 40% of Bitcoin users. This age range completely encapsulates the whole millennial generation, and as they get their hands on $68 trillion of wealth over subsequent 10 years, it seems quite logical that Bitcoin and other crypto assets is where a big portion of this wealth will go.
Smartphone Vs. Financial services penetration:
According to multiple studies administered , emerging markets, like South Africa , have far greater penetration of smartphones than they are doing financial services. this suggests more adults have access to smartphones than formal financial infrastructure like banks, bank accounts and ATMs. This trend has also been on the increase , with smartphone and 4G penetration projected to extend rapidly across the world over subsequent few years. This has seen a rampant increase within the use of “mobile money” solutions across countries in Africa. one among the more successful of those implementations is that the M- Pesa project administered across African countries, with over 40 million current users! The graphic below paints a grim picture of monetary services penetration in Africa. Another hindrance in Sub-Saharan Africa particularly, are remittance costs. These currently top 9% for those eager to send money into Sub-Saharan Africa . during this regard cryptocurrencies offer a much more efficient value proposition, with less expensive and faster transactions. The decentralized implementation of the networks also mean multiple applications are often made for smartphones, allowing anybody with a tool to simply interact with these networks and currencies during a secure, accessible way.
Failure of traditional currencies:
We don’t got to look far into our past to ascertain samples of failed government issued, or fiat, currencies. the foremost recent examples that come to mind are obviously the hyperinflation, and subsequent collapse of the Zimbabwean dollar . In 2018 we saw similar situations play out with the Venezuelan Bolivar and lira losing huge value, leading to hyperinflation, amongst other woes. What this seems like on the bottom is people fighting one another in grocery lines to buy their goods, before the daily occurrence of the worth of products increasing exponentially. These are often the results of the policies of a couple of , where society and future generations are left in touch the results . Our leaders, however, aren’t unique in their failures. The Roman Denarius was the currency of the Roman Empire in 211 BC, it had been a 4.5-gram silver coin. By the time it went out of circulation, the coin contained on the average but 1% pure silver content. This was a results of the constant debasement, by adding cheaper metals, which began with the Roman Empire itself. Even newer and closer to home, the South African Rand has lost over 30% of its value against the US Dollar this year alone. If you had any plans of retiring during a first world country within the next few years, that might now be significantly costlier . Even the proverbial “golden boy” of the fiat currencies isn’t resistant to these effects within the future , with the US Dollar losing over 95% of its purchasing power between 1913 and now.
By all accounts it seems as if the planet is screaming bent us for a far better solution. A transparent, accessible, open-source, jurisdiction agnostic, digital solution that can’t be debased. Whether or not Bitcoin and cryptocurrencies ultimately become that solution or not, i feel we will all agree that the present system doesn’t seem to be working for the bulk folks .
