You’ve probably been to enough family gatherings where at least one relative is raving about how their about to take a trip to Europe off all their Bitcoin money coming to them in a few months. But once you start asking if they even know what a blockchain is they start to sweat and change the conversation topic towards asking if you’ve applied for your major yet. Well this article is for all you imbecile uncles and aunts who think payday is right around the corner with Bitcoin still.
- Since I brought it up, what is a Blockchain?
Well a blockchain is simply an online open/linked database that allows one to make transactions as well as recounts and verifies them to a ledger in that blockchain. It’s important to bitcoin because the initial reaction to the obscurity of the godly bitcoin is that it’s from the depths of the deepweb and therefor is scary and not safe to transact, the use of a blockchain makes it less scary because everything is accounted for in transactional use of bitcoin. It’s a safety net for users to trust each other when transacting their virtual money.
2. Now it’s grandpa’s turn to burst in during the anual family gathering bitcoin talk and start raving that bitcoin could never replace cash and tells the story about how he bought a coke, a house, and a college degree with a dime and a 2$ bill when he was 15. Well his absurdity isn’t totally wrong, in fact bitcoin CANT actually totally replace cash. But why?
Well, while cash usage doesn’t grow nearly as non-cash payments (bitcoin, cards, Apple Pay) cash still grows at a substantial amount in global circulation as transactions as a whole continue to grow. Countries like the UK have tried their hand at narrowing down the channels of payment by reducing note variety and have found major backlash. The simple point is, no one wants to rely on bitcoin or Apple Pay to make a transaction, they want the luxury of it. Everyone needs a fallback plan and cash tends to be that soft tender fallback plan.
On top of this removing cash is a very political undertaking as well as bringing the entire economy under restructure. That’s a time consuming task for any government and even one with more control on civil freedoms such as India starting to do so, even they are a long ways off. Imagine the heated and split in two political climate of the US trying to do all that. It just isn’t politcally feasible to take cash out of people’s hands and give them a blockchain receipt promising their money is all still there.
Basically multichannel options for payment are the future and in the end when your phone is out of battery and your card wont register on the machine, cash is still king.
3. Okay so now grandma is back in the room and the debate is heating up, her being the sweet old woman she is, decided to try to find the middle ground so everyone will shut up and enjoy the family time. She asks “well how does cash and non-cash forms of payment coexist together?”
That’s a great question grandma, essentially this quote from an article on bitcoin says it perfectly; “Once perceived as a threat to the traditional
banking industry, incumbents are increasingly grasping
opportunities to partner or forge alliances with newer
FinTech entrants”(The Future of Money). Using incumbents (non-cash options) is going to grow the amount of money being circulated virtually and the article states that this also grows cash usage; “Once perceived as a threat to the traditional banking industry, incumbents are increasingly grasping
opportunities to partner or forge alliances with newer FinTech entrants”(The Future of Money). Essentially the more we get people around the globe greater access to money the more spending will occur and spending growth means growth for cash and non-cash. It isn’t so much a rivalry as it is a partnership for coexistence. They both build and rely on each other for people to use them.
4. Now what do I the student nephew, son, and grandchild in the midst of all this think during the family gathering?
I simply think that money is a powerful tool, no, I actually know that it is. And I think powerful tools have powerful pros and powerful cons. On the pro side I see people gaining greater access across the globe to their money and improving their own economies. I actually do see random neighbors making money off coin hoarding. But I also see unknowledgeable users run in with thousands of dollars ready to spend it all hoping they can buy a new Tesla next week on their bitcoin cash out. Even more-so I’m aware of the transactions on the dark net and how unregulated transactions can tend to go hidden an un-policed.
I recently just listened to Joe Rogan’s most recent podcast and he had Ed Calderon on. Ed talked about the innovations of the cartel and what their doing in Mexico to make sure those hard drugs make it up to the US. Drones, submarines, etc. all the new tech is being used. If you think the cartel isn’t going to take advantage of decentralized transactions to their benefit you’re wrong and we have to think about where that money ends up. While I like the idea of my own selfish personal use of money outside US government range due to deregulation, I’m not eager to the idea of how bad people in this greedy world turn to use it.