There are three areas that could become severely disruptive if cryptocurrency technology is widely adopted by the populace:
1. Micropayments
2. Remittances
3. Electronic Processing of Payments
Micropayments — Changetip is one of the first tipping services online where you can tip someone else via micropayments.
Remittances — 5-10 percent to send money through Western Union, 1% or less with cryptocurrencies.
Electronic processing of payments — 2-3% per transaction; 1% or less for cryptocurrency transactions.
There are major companies accepting bitcoin and various other cryptocurrencies — Microsoft, Dell, New Egg, and Overstock .com to name a few. There are a few local businesses in Austin that accept bitcoin — Art of Tacos is one of my favorite eateries along with several other restaurants.
The Bitcoin St. Petersburg Bowl happened over the Christmas holidays of 2014 to increase awareness of the technology. I heard that Bitpay may not be sponsoring the bowl in the future but the exposure was one of the first I had seen directed towards an audience that had little or no knowledge of the cryptocurrency.
That’s pretty sad that Bitpay will not be sponsoring again because I was able to introduce several of my friends to bitcoin by sitting down and watching the game with them and showing them how to use the cryptocurrency. After the game, we actually downloaded wallets and I shared some of my coins. We even went to Youtube where we watched some videos contained bitcoin QR address codes. I was able to show them how easy it was to tip by scanning the QR code from the TV screen and sending a few satoshis to the video creator. Skepticism ruled the conversation but at least they were introduced to an emerging technology that will change the way we transact globally. All of this interaction was created that day because we decided to sit down and watch a football game.
For a lot of people it’s the underlying technology of the blockchain that has a lot of people excited. Having a distributed timestamp server that verifies transactions using cryptography is ground breaking. The blockchain really solved this problem in a way that I find fascinating every time that I look at the code. Having a trustless environment where individuals or organizations can exchange value in a secure way over the internet is truly amazing.
The blockchain can be monitored by everyone but controlled by no one. Cash can can be counterfeited but digital counterfeiting is much easier. The blockchain can help prevent this counterfeiting through a distributed timestamp server and cryptography. Beware middle men — certain functions being performed by third parties could be performed by the blockchain. We will always need lawyers and bankers but their functionality in third party situations such as certain forms of arbitration and custodian of wire transfers are two examples that will be affected when it comes to this disruptive change.
There are approximately $72 billion in transaction fees and debit card fees charged annually. Credit card companies keep us on the hook by charging interest and say they are doing us a favor by giving us frequent flier miles while steadily charging us high interest rates. Remove all of that with bitcoin. I will note that bitcoin in it’s rawest form is not credit so this may be an unfair comparison on that front.