The Ways Cryptocurrencies Transform the World

My opinion has no big value when it comes to cryptocurrencies. I unwisely invested into some of them, and so far losing my money. But I still have an opinion.
The buzz around all this virtual money makes me check Coinbase and Blockfolio 10 times more often than Instagram. I'd say more. I don't care about my Instagram, and avoid Facebook (for other reasons which we can discuss in a separate post). What if Cryptocurrencies is just a huge bubble (like a stock market bubble in 1929 or real estate bubble with toxic assets in 2008)?.. Who knows. But so far there were many talks on how cryptocurrencies may affect the world. And I would love to have a look at several big trends. Comments and votes are welcome. I need a reimbursementt for the money I lost on cryptocurrencies lol.

"This is the greatest tectonic shift in money and wealth that we will see in our lifetimes."
James Altucher

Throughout History, society has changed currency several times: gold substituted barter; paper money substituted gold; bitcoin and other cryptocurrencies will be the new paper money. Each new currency solves the problems of the previous one. Bitcoin solves the problem of printing the money, forgery, double charges during currency exchange, anonymity, etc..
Recently I saw a fascinating sign in a nightclub. It said ‘we accept bitcoin.’ ‘This is something new,’ I thought. But for some reason, I wasn’t surprised. The air is filled with talks about new virtual currencies. Even those who know nothing about them, are still aware of their existence.
For many, it is way more than something. For the past few years, bitcoin and blockchain technology acquired more and more influence in diverse fields on the global level. I come from a small European country - Belarus. At the end of 2017, the President Alexander Lukashenko has signed a decree which legalizes cryptocurrencies, initial contract offerings, and smart contracts. Belarus is considered to be pretty seclusive, so
this decision was a sign for me that cryptocurrencies are going everywhere, and it is way more than a bubble or an online trend. It is becoming a part of the world, reshaping the financial system, marketing, and other spheres. In this paper, I will look into several significant fields and try to analyze how cryptocurrencies are affecting them.

Bitcoin - Banks - Industries
It is impossible not to perceive the potential impact of the cryptocurrency on central banking. The Bank for International Settlements (BIS), in 2015, noted that bitcoin may interrupt the ability of central banks to exercise control over the economy, as well as to issue money.
As of today, many central banks are closely following bitcoin's development. Some of them even proposed a digital version of their currency. For example, the central banks of Canada and Ecuador are among the first to explore such opportunities. Possibly, in the nearest future banks will start accepting bitcoin.
In recent years, bitcoin's influence has led to changes in various industries. Most companies that operate online started using bitcoin as a method of payment. For example, on Shopify with one click, you can integrate BitPay option, which will allow you to accept bitcoin as a method of payment. Couldn’t be easier. Another example is the company called Cheapname that sells domain names. Wordpress (website creation platform), Steam (video games distributor and gaming platform) are in the vanguard of alternative and progressive payment methods.
Some companies are already paying to its freelance employees with bitcoins. At a certain point, it will be too visible, which will lead to the tax reform.
The success of bitcoin paved its way into the offline world. Richard Branson - the founder of Virgin Galactic - known for his inclination toward bold and innovative projects, accepts Bitcoin as a method of payment. Same applies to the hero of our time founder of Tesla and SpaceX - Elon Musk. Interesting fact, Elon Musk himself owns only 0.25 of bitcoin, which is approximately $2.5k. There were a lot of speculations around his name. Many fake accounts were created to stimulate sales of cryptocurrencies.
Generally, there is a lot of fraudulent information online. I can’t provide the exact number. But I won't exaggerate if I say that 90% of data online related to the cryptocurrencies is fake. It is clear that this new field lacks control, tools for regulation and promotion. For PR specialists it is a terra nova, a beautiful world where new methods can be created or the existing ones extended. ‘PR/marketing - cryptocurrency - blockchain technology’ is a topic for a separate paper, a long and captivating one.
As I mentioned earlier, many altcoins will be gone soon, which will cause the exponential growth in the price of those that will survive. This phenomenon can be compared to dot-com boom which at certain point looked like a complete disaster but at the end of the day lead to a positive gradual transformation of the online world.
One of the latest news online related to bitcoin spiked lot of discussions. During its annual report to the Securities and Exchange Commission (SEC) on February 22, Bank of America publicly admitted that cryptocurrencies would affect its work negatively and the Bank can hardly fight back. Here are two extracts from the report that will prove the statement:
“Our inability to adapt our products and services to evolving industry standards and consumer preferences could harm our business.”
“This can reduce our net interest margin and revenues from our fee-based products and services. In addition, the widespread adoption of new technologies, including internet services, cryptocurrencies and payment systems, could require substantial expenditures to modify or adapt our existing products and services[.]”
Bitcoin moved banks from their comfort zone. Now they have no other choice but to transform and catch up with the changes.

Bitcoin - Politics
Bitcoins cause a lot of political controversies because no government can fully control them. They are an explicit form of wealth for individuals, and no state can expropriate them because of the cryptography that underlies this cryptocurrency.
As I mentioned earlier, some governments already started legalizing cryptocurrencies joining the future at its naissance. Gradually the society on every level begins understanding that cryptocurrencies are a perfected form of money that guarantees the growth. I may suspect, that governments will need a specific institution that will deal with new kind of money. Maybe it will be the Ministry of Cryptocurrency. While the name of the institution remains unclear, it is certain that every government will step a foot in the game and will try to acquire as much control as possible.
Rumor says that the currency of one of the countries may collapse soon (Argentina, Venezuela are prominent candidates). It may lead to accepting a bitcoin as a national currency or to at least its extensive usage. Under this circumstance, the bitcoin will skyrocket to over $50k per coin.
It is hard to adequately estimate the full impact cryptocurrencies will have on the world since the phenomena is still burgeoning. But what is evident that many companies from small to large use bitcoin, governments (Russia, China, Japan, Estonia, etc.) invest into mining. This field requires immense amounts of energetic and research power and thus will not become a priority for the governments. The fact is that the cryptocurrencies have become a part of the financial landscape and are not going anywhere. The wild youth of bitcoin should not divert attention from what it will become.
The government’s monopoly on money is already ruined. And it is a massive change to the perception of the world. There is a lot to take in, governments will either fight cryptocurrencies or will invest into particular one that may potentially substitute its existing currency (as I mentioned earlier, some countries are already doing it). One thing is sure, monetary system will never be centralized again.

Blockchain - Solar Energy
Here is an interesting example of how blockchain technology can be implemented. Cases like this prove that this change is for the best.
PowerLedger is a fascinating company that existed before blockchain technology became the buzzword it is today. Because many homes in Australia are equipped with solar panels, they figured out a way to allow neighbors to sell their excess energy to one another, without having to send it to a centralized power grid, but it was hard to keep track of.
When blockchain technology became popular,​ they realized they could utilize the ledger system to further decentralize and democratize the sale of solar power. Their goal as a company is to give people who produce energy a more realistic price for their solar power, and people who consume energy get a much better deal on the cost, if they wish to purchase cleaner, greener, solar energy. They have a very enthusiastic fan base both online and in Australian communities. They are currently in the process of scaling worldwide.

Bitcoin in the Future
James Altucher in his interview to CNBC said that nearly 98% of existing cryptocurrencies is a scam. And eventually, they will burst. But bitcoin, litecoin, and few other cryptocurrencies are moving into the financial system for good.

In my opinion, one of the spheres that desperately needs bitcoin is international transactions. As an expat, sometimes I need to send money back home. For a while, I’ve thought that there has to be a better solution to the problem since it is ridiculous to pay so much for each transaction. A recent study conducted by Businessweek showed that the average commission paid for money transfer services is 9% of the transfer amount, while the conversion into local currency is additional 5%. The profit margin of Western Union in this mediation is enormous - almost 16%, and most of its costs are related to technologies involved in moving money from one place to another, guaranteeing the legitimacy of the transaction. Western Union spends billions of dollars on what bitcoin can do almost for free.
With the increase in bitcoin adoption in various industries, its influence will only go higher. On the surface, it seems like cryptocurrencies and a blockchain technology are equivalent to the Internet on the scale of importance and have a mostly positive impact on the world. But as in every creation, there is a dark side. Let’s have a look.
The energetic consequences of cryptocurrency creation and its impact on the climate start causing concern. Despite the differences in estimates, everyone agrees that bitcoin's energy consumption is very high and will only continue to grow. Today, a large part of mining computers is in China. At the same time, two-thirds of electricity produced in the country comes from coal-fired power plants, which produce a large volume of carbon dioxide. According to the website www.digiconomist.net, "mining" takes about 30.14 billion KW/h per year, which equals four nuclear power plants. It is more than energetic consumption of 19 European countries, and in particular 25 times more than Maltese and roughly equals to Hungarian (a country with a population of 10 million people!) consumption.

Bitcoin has a connection with the criminal world - money laundering and drugs - through its usage on notorious black markets such as Silk Road and Alphabay. Spank coin is a new cryptocurrency that allows avoiding taxes in the porn industry.
In addition to it, volatile and unpredictable nature of cryptocurrencies, lack of research, serious hacks lead to being cautious and worried about the future of the cryptocurrency. Still, despite all the 'side effects,' it is already clear that bitcoin blends into all the spheres of society and has mostly a positive impact. Bitcoin will not change the world. It will not be a substitute for existing currencies, but it can form the basis for the appearance of an updated currency system, which has not existed before. Thanks to blockchain technology this fantasy may become a reality.

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