What Is the Real Value of Using Cryptocurrencies?
Cryptocurrencies like bitcoin have a lot more innovative use cases than you may think — from funding the Mars colony to protecting patient privacy.
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Like a lot of people in tech, I spent a lot more time getting my head around the blockchain and the plethora of innovative use cases than thinking that much about bitcoin or other cryptocurrencies. Yet over the last year, I find more and more noise about crypto coins including news about record highs and an abundance of ICOs and changing regulations internationally, such as China recently making ICOs illegal.
So beyond looking at cryptocurrencies as something analogous of shares on the stock market, I wanted to get a feel for the use cases of bitcoin, especially at a time when countries like Sweden use cash in less than 20% of retail transactions.
Access to Digital Payments for the Unbanked
Did you know that over 53% of the world and 50m people in the US do not have a bank account? In parts of Africa, Asia, and Latin America, residents are more likely to use mobile phones to pay for services and digital or physical goods rather than cash, checks, or credit cards, especially with mobile money services such as Kenya's M-Pesa. There has historically been tension between such providers and cryptocurrency campaigners, while bitcoin and its ilk have struggled to gain traction in places when it could have the most impact. Yet it stands in my opinion as a viable use case, assuming regulations and red tape are no longer a barrier in the future.
Fund the Mars Colony
I have to confess — my interest was piqued when I heard about Marscoin. Its creators believe that a scarce cryptocurrency would allow "the developing Martian economy to operate freely yet prioritize allocating resources towards real needs while ensuring that the early stake-holders, risk-takers and most experienced colonists benefit the most."
They further note that, "Due to the nature of interplanetary communication, Mars is too far from Earth to allow it to participate in the bitcoin network on Earth. The time it would take for a payment on Mars to be confirmed by the blockchain on Earth would be too impractical. Therefore the Mars colony would start their own cryptocurrency."
So as well as potentially making yourself some money through Marscoin, you could be also funding the first colony on Mars.
Protect Patient Privacy
San Francisco's My Doctor Medical Group offers the increasingly more prevalent, concierge-style health service. As part of their commitment to the complex needs of their typically wealthy clientele, they've started accepting payment in bitcoin. For those who may want to keep their medical costs separate from a shared bank account, I can imagine this being an increasingly popular option. And let's face it, at a time when medical fraud and patient privacy is under attack, anything that ups the anti should be seen as a good thing.
Advertising Platform for Cryptocurrencies
Today, most publishers do not accept cryptocurrencies, primarily because the general demand from traditional companies is not significant enough to justify the adoption of a new type of payment
However, by 2018, the advertising market will be facing an influx of companies raising through ICO, and therefore most of them will have their budgets in cryptocurrencies. These funds will need to be used and will create a few issues for companies who decide to convert it to fiat — for example, low liquidity in the crypto market, causing the value to fall when converted. They also face tax charges from the conversion of cryptocurrencies to fiat. In response, Hong Kong company AB-CHAIN is a new generation advertising network that allows advertisers to buy ad space from publishers using cryptocurrencies including their ABC token, designed as a decentralized ERC20 token on the Ethereum blockchain.
With the sheer volume of cryptocurrency startups and businesses showing little sign of slowing its growth, it's likely that we'll be seeing more B2B businesses catering for their contemporaries.
Purse.io is a startup that enables online shoppers to save money shopping at retailers such as Amazon, Starbucks, and Target. The user deposits bitcoins into their Purse.io and imports, for example, their Amazon "wish list" to the platform and indicates what level of discount they would like per item. This is posted in the Purse.io online marketplace.
The items on the wish list are purchased by someone who is seeking to obtain bitcoin for the same amount using his/her credit card. Purse, therefore, allows users to receive discounts on Amazon purchases and allows their counterparts to receive bitcoins in the amounts they desire.
Darknet Marketplaces and Ransomware
It's fair to say that there are more than a smattering of dark and criminal activities on the internet. Bitcoin can be used to purchase ransomware, which we've seen grow increasingly common. It can also be used to trade child pornography. In the past, there was, of course, SilkRoad, ostensibly a marketplace to buy drugs. Although the original Silk Road was taken down back in late 2013, there are still plenty of uncensored marketplaces accessible via the Tor Browser.
However, it's also worth not forgetting Wikileaks, whose operating costs can still be funded anonymously via cryptocurrencies. Like most Australians, I am fairly conflicted about Wikileaks and Julian Assange. But in very simple terms, having a currency that can help fund a platform where whistleblowers can speak out against their governments and workplaces has its place in a democracy.
Opinions expressed by DZone contributors are their own.