Category: bitcoin and fiat currency

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Why Bitcoin Matters.

In the US, Bitcoin is a phenomenon that has captured the attention of the population, and raises speculation about the price and “staying power” of the cryptocurrency.  You see, in the US, we have a solid fiat currency – The United States Dollar – and Bitcoin is just an additional asset to acquire.  Especially if it goes up in price.  But US Citizens don’t “NEED” Bitcoin.  it really doesn’t solve a problem for us.  If you have Dollars, that is the coin of the realm, and is graciously accepted throughout America and it’s territories.

Bitcoin is very important in Countries with high inflation
When the fiat currency is devalued or worthless in a given country, Bitcoin provides a solution to move money around without inflation issues and fees.  Venezuela, which is mining it’s own altcoin, the “Petro”,  has a high adoption rate for Bitcoin.  Bitcoin solves a problem, when you want to move money (Bitcoin) in and out of the country without paying taxes or fees.

“Women’s Annex has led to a significant increase in female adoption of bitcoin in Afghanistan, which in turn allowed many women to access unprecedented levels of financial autonomy. During a recent Blockchain Summit event, Roya Mahboob recounted the story of one woman whose “husband always hit her and took all [of her] money from her”. After joining Women’s Annex and being introduced to cryptocurrency, the woman was able to save enough bitcoin to “later [sell] them off and [get] a lawyer to get her divorce”, said Mahboob.” – Bitcoin News

In Africa, only 20% of the population have bank accounts, but 60-70% of the population have cellphones.   It is easier to get a bitcoin wallet for your phone, than to open a bank account. Muslim women, who cannot enter a bank without a man to “conduct” transactions for her, can keep a phone with a bitcoin wallet under their Burka, avoiding public judgement on her behavior, and using bitcoin to conduct business.  This is discussed in detail in a Coinbase article.

Bitcoin is an enabling mechanism in countries where the fiat currency is undesirable, or the banks are difficult to do business with, or the culture prevents people from conducting business.  Bitcoin may not be more than a novelty where the fiat currency is strong (Yen, Euros, pounds), but it is a powerful business tool in the developing world.  That, my friends, is why Bitcoin matters!

Best of Luck, and “To the Moon”
Thanks for Reading my Blog on Bitcoin!
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What are the incentives for modern governments with fiats to adopt Bitcoin, aka cryptocurrency?

It’s all about:

CONTROL.


A government controls its currency and will not be able to control/dominate Bitcoin (unless it mines its own coin, as the currency of the realm).

 

Bitcoin purchases and transfers are “peer to peer” transactions. Using the Blockchain (the Bitcoin ledger system) no central clearinghouse is required to regulate any transaction; it occurs between two parties. The Blockchain is a transparent ledger that just records the transaction (in very simple terms). Individuals keep their Bitcoin in “Wallets” on smartphones or computers, or on specific websites that deal in currency transfers (like BTC to USD).

Governments regulate volume of money, interest rates, fee structures, and monitor it’s value against other fiat currencies. Financial transactions outside of government control (with no fees going to the monetary “gatekeepers”) are a nightmare for financial ministers everywhere.

In my opinion, Bitcoin is one component of the financial mechanism any government needs to work effectively. I am not convinced that cash (or precious metals) are going away anytime soon, but governments fear that losing their money-printing ability will weaken them considerably.

 

Banks and some governmental entities are scrambling to utilize blockchain technology, while publicly denouncing or denying Bitcoin as a monetary vehicle. Most notable among the nay-sayers was Jamie Dimon, of JP Morgan Chase.
Dimon himself has publicly said he sees potential in blockchain tech, and his company just announced this month the launch of a blockchain-based pilot to “significantly reduce” the number of entities needed to verify global payments, which would cut down transaction settlement times.

Countries with High inflation and unstable Fiat currency (Argentina, Venezuela, as examples) have seen Bitcoin transactions flourish as there are low or no fees, and Bitcoin valuation is more stable than the Fiat Currency.
Cryptocurrency Primer: Everything You Need to Know About Cryptocurrencies and How They Are Different from Regular (Fiat) Money (With Mining Guides for Bitcoin, Ethereum, Litecoin and ZCash)
 
Bitcoin and the blockchain are new entrants in the carnival of Financial Instruments, and (despite the nay-sayers) will be around for a while.

Thanks for reading my article! – Feel free to share!

(Disclaimer – I own some fractional Bitcoin).