Guest Post from Samson Williams, a Professor of Blockchain at University of New Hampshire’s School of Law
The problem with money, is money. You either have it or you don’t. Cryptocurrencies are just a more elite form of money. Cryptos are like virtual currency gummy bears for nerds, libertarians, and snake oil salesmen/women. While, for more than 3.5B humans, cryptocurrencies are a dream (they don’t even know to dream) with an even higher barrier to access than the American Dream. Why is that? How is that? Simple, internet access.
-3.5B+ humans don’t have access to the internet
-1.7B people do not have any sort of bank account (this includes mobile money, like Mpesa or WeChat)
-3B humans live on less than $2.50 a day
So as I hear the chatter about cryptocurrency democratizing access, I ask,
“Access to what? Your exchange? To the ability to make so called “blockchain company” founders rich in a more advanced simplified form of pyramid schemes?”
Yes, yes I know. Such fear, uncertainty and doubt (FUD).
You’re probably asking yourself, “What’s an ‘advanced simplified form of a pyramid scheme?’” Again, simple. First, realize you’re dealing with humans who nowadays at best, are desperate financial sheep, who can easily be FOMO’ed (fear of missing out) into blindly following the herd. If 2017 and 2018 showed us anything, it is that cryptocurrencies aren’t accessible to most, understood by even less and ultimately employed as a new tool in a very old hustle of freeing the huddled masses from their hard earned money.
Again I say, cryptocurrencies haven’t democritized anything. They’re just a fresh coat on the traditional barriers to trust, safety, wealth and peace of mind. DYK?
- 98% of ICO are destined to fail.
- 80% of ICOs didn’t even bother to go decentralized, rather opting to keep the money raised. For what exactly? We along with EOS, Telegram and Tezos wait with bated breath to find out.
There are many assumptions required to believe that cryptocurrencies (or any form of money) will enable access to people who were previously penniless/satoshiless. Here are four assumptions to start:
- Anyone can mine cryptocurrencies.
This assumption is predicated on you having access to 1) electricity, 2) a computer, and 3) the internet.
2. Anyone can buy cryptocurrencies.
Again, this requires access to the internet.
But even before access to the www, you need something of value to exchange for these valueless cryptos. If you’ve no value to start off with, how do you birth value from inertia? Nothing quite dooms one to poverty, like being born in it. Just ask the billions who are destined to die in it regardless of their level of effort.
This requires an awareness that these things called cryptocurrencies exist.
This also assumes people will understand and/or have faith in these virtual currencies enough to transact in them.
A bank account. Why? See below.
Here is how the process of acquiring cryptocurrencies currently goes:
Bank ? Exchange ? to Crypto ? to CryptoWallet
Find a peer who will accept crypto
Agree on Peer-2-Peer transaction
CryptoWallet ? to Peer, at which time the “peer” converts the crypto back to fiat
CryptoWallet ? to Exchange ? to Bank ? to Debit card (no cash in this seamless world of digital currencies)
This is predicated on having a bank account, which requires both money and an ID.
Two luxuries that again, more than half the world does not have.
3. Cryptocurrencies are in fact currencies.
For the above to even have any semblance of a Peer-2-Peer transaction, you’ve got to use the cryptos as currency or a “mode of exchange.” That’s an adoption, education, awareness, convenience and customer service battle.
Too, in places with the best intermittent at electricity, how are markets ran? On cash, credit or digital/virtual currencies?
How does one easily buy clean water, medicine, food, bus transportation with a cryptocurrency?
4. Faith doesn’t feed the hungry.
Less than 33M people believe in cryptos enough to have a bitcoin wallet. The other 7.7486B humans on the planet have a different faith than you. Their religion is called, “cash” preferably USD, Euro or Kuwaiti Dinar. DYK that the Kuwaiti Dinar is always 3x more valuable than the USD? Meaning 3 USDs = 1 Kuwaiti Dinar. Always.
The point is that the majority of the world doesn’t have the luxury of speculating on the minutiae of cryptocurrency lore. They’re hungry. They have basic needs to be met because it turns out faith doesn’t feed the hungry. Universally accepted money does. What’s your cryptocurrency doing to be universally accepted? Hint: It will need an army.
But Don’t Give Up
As fubar as the cryptocurrency space is, wrought with fraud, scams and egos the size of my own, cryptos will be part of the future of value. Cryptos will be part of the future of value because money as a thing (what you think of as value) or as a concept is, and will, change. How value is stored, conveyed and exchanged is evolving as technology making it easier to capture and share what humans care about. What will be the determining factor in the adoption of cryptocurrencies by humans? Convenience. Humans love easy stuff. So, the next question is, “How easy is your cryptocurrency to use?”
Concluding With A Word On Blockchain
Blockchain is the tech that makes cryptocurrencies possible. Why does that matter? Again, simple. Blockchain > Cryptocurrencies.
Enjoy 2019. It’s going to be a great year for innovation, automation and democracy. Just not how you think.