Show Me The Money
How will the maturity of blockchain and cryptocurrencies impact the way we spend, save and share money?
After years on the fringe, cryptocurrencies and the blockchain network on which they’re developed, seem poised to make their leap into the main stream, with massive implications for traditional banking and financial systems.
Fitting Into Everyday Transactions
Despite their booming popularity as an investment vehicle, the process of transacting with cryptocurrencies in the real world remains clunky to say the least, limiting their potential uptake as a replacement for traditional forms of money.
TenX is one of the many platforms that are working to remove these barriers, and have recently secured a further $80m in funding to continue development and rollout of their system (Interestingly, the money was attained via a cryptocurrency based capital raising mechanism called an ICO, another disruptive implementation of blockchain based tech). The platform combines a secure, mobile wallet to store the digital currency, physical debit cards for use at regular EFTPOS machines, and facilitates the exchange to any local currency at time of payment.
Financing the Internet of Things
As the Internet of Things connects everything from our watch to our car to our washing peg (yes, really), digital wallets and payment systems built on the blockchain will ensure their secure and seamless integration with our finances.
One such example comes from a collaboration between UBS bank and automotive producer ZF to produce the Car eWallet. This technology will create a unique ID and “bank account” for the car, allowing it to automatically pay for fuel, tolls, parking or any other utility – without any need for human input, a necessary trait with the emergence of autonomous cars. The system also allows the car to authorize access to individuals and receive payments, presenting a wide range of opportunities around the sharing economy, as well as the delivery of goods directly to your car boot.
Providing Universal Access to Banking
The decentralized, internet-based nature of currency stored on the blockchain also opens the door to secure, globalized banking for people in remote and unstable economies. By removing the reliance on traditional banks and intermediaries, it reduces the risk of losing money in a localized economic collapse, government intervention or geographic displacement, while also allowing almost instantaneous transfer of funds across the globe at a fraction of the current cost.
African startup Bitpesa is harnessing this opportunity to provide frontier markets such as Nigeria, Kenya and Uganda the opportunity to participate in global commerce. Their exchange platform allows individuals and businesses to send and collect payments from the rest of the world, in a way that is much more accessible and affordable than traditional methods. It also improves the ability of Africans working overseas to send money back to their families living in remote regions. The hope is that by removing these barriers, people previously excluded from the benefits of globalization will have better access to goods, services and markets.
Although it still has many hurdles to overcome, blockchain and the financial systems it enables will undoubtedly cause major disruption to traditional structures of banking and commerce. Lower barriers to entry in global trade will enable greater participation from both buyers and sellers, while fast, secure and intelligent transactional systems will mean that we (or the connected devices acting on our behalf) can confidently interact without risk.