Originally published in The Huffington Post
Economies have controlled almost all aspects of human life ever since money was introduced to society. Money makes the world go around and money is power, and power is money. Any escaping of this principle is nearly an impossible effort, unless of course, you have chosen to live in the wild. The backbone of history’s most powerful nations and countries has been none other than economies based on civil societies. No complex markets to breed innovation would ever exist without a mutual agreement amongst all mankind-although deceptive-to believe money has actual value as physically touchable products or tangible services do.
As a result, money can be considered and described as a needed and imposed agreement between members of society to regulate and define monetary value for anything and everything. This is made possible and realised by free markets that have come to regulate automatically the undeniable law of supply and demand. Fiat currencies are currently supported by implied mutual agreements amongst today’s mankind. However, this very concept is transitioning with headlines of corrupt scandals of monstrous dimensions, one after another.
The Banking Industry
More than any other tool prior to it, bitcoin will eventually alter the very nature of banking services from the ground the up. With a variety of online wallet providers lending their support, any individual on the planet connected to the ever-growing and accelerating internet can enjoy the very equivalent of what is known as a bitcoin bank account. This enables billions of people the chance to save their money without any concerns. There will no longer be any need for big banks. Bitcoin wallet providers will be the only “banks” existing in the future. They insure deposits and banks of resource will be home to precious metals, such as the firm named Bitreserve. In the long run every one of us, except bankers of course, will be saving money as the $19 trillion banking industry becomes automated. Imagine that.
The interest gained through money in bank accounts will never be missed by banking customers after they come to realise the benefits received from owning bitcoins. This result is due to the preset limited supply of bitcoins, fundamentally making this new initiative a deflationary currency, naturally. With more people joining the network as we speak, the value of each bitcoin is and will be rising. Consider the bitcoin industry being able to take over one tenth of today’s global financial system of banking, each bitcoin would then be valued at around $1 million. Endless security possibilities are also offered by bitcoins, a dire necessity to safeguard itself in the face of theft. Such options include cold storage, multi-signature technology, offline storage, paper wallets, vault storage and many more security options not yet considered. Even imposing a number of these options will protect an individual from identity thieves and hackers. 15 million identities are stolen each year, so protecting such a population would be equal to saving somewhere around $50 billion in possible losses.
A market of payment
Unfortunately, it seem this will remain a permanent fact of life that only a number of countries will be able to provide more chances for growth at a personal level. This is mainly the result of that country’s economic aptitudes. Other can cases of war, history has shown economies develop much easier and more powerfully in a free and democratic environment. A new trending norm in our society has been the concept of immigrating for work, as volatility and war is increasing in specific parts of our world, even in the 21st century. As a result the market of remittance, in sending money across the seas, has expanded significantly. A new record was in this regard in 2014 as $436 billion was sent to developing countries across the planet. Moneygram and Western Union are the main competitors for this huge money transfer market industry, demanding up to 15 percent of the transmitted money as fee for making the transfer possible. $9 billion dollars is the total market outcome of Western Union alone. If bitcoin technology is used and adopted all of the revenue made by companies such as Western Union would be returned back to the people without any added effort. Bitcoin technology enables people to spend only a fraction of a dollar to transmit huge and literally unlimited amounts of money far across the oceans. This has also made travelling with money much easier than ever before, as bitcoin only relies on electronic communication to be at your disposal. If the remittance market were to be taken over by bitcoin, we would reach a point where on single bitcoin would be estimated at about $45,000.
Exchanges of decentralised nature
Providing funds for businesses has always been an important role played by the stock market. However, burdensome regulations have always come with stock market service and this has continuously decreased the speed of business growth. The very importance of speed in today’s world is a serious subject to be respected and reckoned with. The stock markets of the future will be armed with blockchain technology, transforming the entire industry from exchanges of company nature to online exchanges on a completely decentralised basis. Two such companies, Symbiont and T0, are already getting into competition to bring about what can be described as a revolution in the U.S. stock market. This shift will allow Wall Street to carry out decentralised exchanges made possible through blockchains of bitcoins.
There is a long slate of altcoin companies, including Bitshares, CounterParty, Horizon Coin, Mastercoin and NXT that are known to power their own line of exchanges on a decentralised basis. They have engaged these activities by employing blockchain networks of their own. In such blockchain networks of digital assets, literally all parties are able to establish their own tokens, place stock into their company, or receive electronic receipts that are redeemable for various services and physical products. Separating, in a natural way, trusted electronic assets from those new to the market is done by reputation, and not regulations imposed by various parties. Through such a method of operation, there is no longer any need for trading brokers as tomorrow’s stock markets are able to run automatically using blockchains that are actually publicly powered. Coinfeine and Coinfy are available for those peer-to-peer trading companies that lack any decentralised exchanges. A platform of Torrent-type is provided by these firms for users to trade bitcoin, altcoins, or various types of electronic assets, with people exchanging thoughts in direct P2P environments.
And this was just a glimpse at the potential viewed today in bitcoin. Who knows what tomorrow will have in store for us. In my next piece we will discuss how business registries can be decentralised, look into crowdfunding, the all-too sensitive insurance industry, how bitcoins provide more transparency and the options available before us.