The Unfortunate Reason Blockchain Technology Will Disrupt Cash
It all started with Bitcoin. A few have made many millions of dollars. In my own small Canadian city where our head office is located there is a 22 year old guy who bought a BMW from Bitcoin mining. But it’s not Bitcoin that’s important, it’s the underlying technology that makes it work. It’s called Blockchain. It may very well be the biggest digital disruption tool of the financial sector and will replace cash in the next 5–15 years. The reason it will replace cash? Crime and anonymity.
Why Cash Really Persists Today
The reason cash is still very much around is because payments can be made anonymously and it can be laundered. The downside is that it takes up space and weight. Yet it is the fluid of organised crime, intelligence agencies and the underground economy. Digital payments can be tracked and traced. Cash can become untraceable.
Blockchain Changes the Game
A key element to Blockchain technology is that it can be anonymous. Payments and settlements can be made fast, wherever there is Internet access, which with wireless data available almost anywhere on the planet, means it can happen anywhere. No more suitcases filled with cash to haul around. No hidden stockpiles of cash to guard (kind of a bummer for Hollywood action movies.) It is this anonymous capability that makes Blockchain the entirely feasible technology to replace cash.
The Necessary Evil of Anonymous Payments
Yes, organized crime already has seen the value of digital currencies like Bitcoin and others. So have intelligence agencies around the world and now police are starting to see the value. Sometimes informants need to be paid or moles in rival intelligence agencies. Using digital currencies means these payments can be even less traceable than cash, providing a great opportunity. For the underground economy where citizens and odd jobs folks who do painting or small home repairs, this anonymity ensures avoidance of high taxes.
As with any new technology, there is always a good use and a bad one. Cash has played a key role for this very reason. Now there is an alternative to cash that can viably replace it. Expect to see more digital currencies…but that’s another article.