Will Blockchain Become Mainstream?
I am not an economist and these opinions are just that, my opinions. Like anything, supply and demand caused a massive rise and fall in the value of Bitcoin. At the time of writing this article there are over 45 million blockchain wallet users.
So, let us explain Blockchain and Wallets in the simplest way possible:
Imagine you’re at a festival and due to liquor laws, you are not allowed to buy any alcohol as the sale of alcohol is governed by laws and licences. These laws were written a long time ago to curb public intoxication and general bad behaviour of impaired drunks. Now, while the law also refers to “selling”, as the using of local currency, however I may visit a friend who can legally offer me as many drinks as he deems fit, assuming I leave a gift at the door as I enter the house.
This loophole is used by festival operators who setup on private land and provide drinks for the duration of their events. They circumvent the use of local currency by selling tickets or tokens at the entrance - So according to the letter of the law, I am arriving at the beer tent and getting a beer BUT I am not paying for it directly with the local federally controlled currency.
Now imagine the token sales booth is Blockchain and the tokens are Bitcoin to put in my wallet. The Blockchain regulates the price of the coin and the Wallet is the means for you to store the coin. The beer distributor is not breaking the law and the government has no oversite on the spending within the grounds of the festival.
Governments do however want oversite as this allows for control through regulation. Because these enforced laws are old “in digital terms”, they cannot change them fast enough to curb the operation of unregulated financial activities. As a result, black markets are being funded across borders with digital currency, and as soon as you move this out of federal oversite you cannot get the support of the government if things go wrong.
So for any of these digital currencies to become mainstream, oversite needs to be given to the governments. And with this comes new laws which inevitably brings restrictions on individual financial freedom. But what do we gain from these restrictions? Federal support to stop the funding of black-market trade, such as slavery… Yes, #SlaveryIsStillHappening. But the entire point of the unregulated digital currency was to save time and make money by not having to stumble though expensive Forex and Tax hoops.
Personally, I do not see these digital currencies being fully adopted, but there is hope. Some countries are considering making their currency digital. Africa as a union of countries would be prime to adopt such a system as mobile penetration is high and a digital mint federally controlled by an African union would compete well in global markets.
Africa would need to unite as a continent with unbiased oversite… and that is another story for another time…