A peculiar feature of Cryptocurrency — and a reason why so many people have a hard time wrapping their brains around it – is that it is both a payment system and an emerging monetary system.
Those two systems are usually separate.
The payment aspects of Cryptocurrency is the financial backbone of the cryptoconomy.
Cryptocurrency is uniquely suited to a digital age. Real property is exchanged, not just a promise to pay, and it is done person to person, without having to go through banks and large institutions. This is crucial for ending the plague of identity theft, forgeries and online fraud.
When you really think about this you'll come to understand what a profound change this really is.
The payment dimension might not seem that important in the United States, but when you broaden the perspective to global commerce, you can easily see it. There are huge swaths of the planet in which you cannot use credit cards at all. Even now, if you try to buy something on Amazon with a home address in one country and a delivery address in another, your transaction is likely to be refused. The anti-fraud measures have been necessary, but they have frustrated the development of the global marketplace. It was at this point that it finally struck me.
This is not a currency only for the rich tech world; it is a currency for the world’s poor, who are desperately trying to become part of the global division of labor. It allows anyone from anywhere to buy or sell anything securely, privately, and reliably.
It suddenly started making sense to me why Cryptocurrency is so wildly popular in Africa, Latin America, and the outer reaches of the Russian empire. But even domestically, it is clear that this market is expanding.
As of only a few weeks ago, you could pay for anything at hundreds of mainstream merchants with Cryptocurrency.
One example is BitPay uses a smartphone application called Gyft. You buy a gift card from Gyft with Cryptocurrency and the merchant scans the card. The operation takes under a minute.
I have been watching this happening, it’s fascinating. It was only a few months ago that people were saying, “Oh, this stuff can’t really be money because I can’t spend it at Target.” Well, now you can. Where are these doubters now? Are they taking back their previous rebuff?
The payment system benefits of Cryptocurrency are clear enough, but there is a much broader vision at work here, one that goes to the heart of the development of money itself. The basic premise is that humankind needs money to facilitate trade, and many goods have served that purpose.
At the dawn of modernity in the late Middle Ages, precious metals were universally seen as the best tools for this. But there was a problem with precious metals. Namely, they are really heavy and not very portable in daily use. Thus did banking institutions come along, and with them paper money.
Paper money dominated the world economy until the end of the gold standard in 1971. Since then money has taken a digital form and is backed solely by debt obligations.
The great innovation of Cryptocurrency was 20 years in coming.
There were many attempts to make a new currency, but they faltered repeatedly because of the problem of double spending. A currency should behave just like the real characteristics that gold and silver once had.
What about the deflationary implications of Cryptocurrency. The usual belief is that a currency rising in value is an incentive to hoarding and that makes business impossible. This not true, experience so far is that people spend Cryptocurrency more when the exchange rate value is rising.
As I build my cryptocommerce WordPress business site, I’ve found something curious about using Cryptocurrency. I'm beginning to think in terms of a new pricing system and sense a real change of entrepreneurial psychology.
The goal is simple: to build a better entrepreneurial process as a means to a better world. There is a beautiful idealism at work here, the kind of thing that people look for from charities and universities. Actually, the world of cryptocommerce on this level represents an embodiment of this idealism.
Bitcoin and cryptocurrencies are succeeding, not by attacking the current financial system, nor by asking permissions from the regulators and gatekeepers. This new economy, the cryptoconomy, is simply the next economy and will not attempt to take over the current financial services system, nor wait for consumers to transfer fiat money into cryptocurrency wallets; rather it will emerge by creating its own wealth, via new types of services and businesses that extend beyond money transactions.
The implementation of Cryptocommerce is a next step in the evolution of global commerce and trade that is in process. History show that about every 40 years the monetary system changes. We are past due and I believe that cryptocurrency and cryptocommerce are next entrepreneurial environment to emerge into business dominance.
Add cryptocurrency to your business today.
David
