The world believes that Bitcoin will one day replace fiat money and become the digital currency of the future. However, only .2% of the world’s population own Bitcoin. To most people it is a popular mystery; it is confusing and above all misunderstood. Thanks to its explosion in price people are aware of its existence, and some may partially understand it, but most don’t really get it. The banks, businesses, governments, and the public at large seem to be unable to fully explain what it truly is.
A survey done by The Harris Insights firm revealed that 50% of American adults “had little to no understanding of Cryptocurrencies.” And the little insight they have is in regards to price. For example, 25% of them expect the price to go up, while 30% that it will go down. And about 41% say they have no motivation to invest in them. Gem CEO Mich Winkelspecht faulted the uncertainty and confusion in public perception to the lack of information. In this the media plays a huge role as news impact public perception and the direction of the market on a daily basis. Bad press is always more profitable and impress highly on people’s minds. Therefore, a lot of times, the information the public receives regarding Bitcoin is not positive.
Companies are equally clueless to the concept and only focus in the marketing and profit potential. The best example occurred in December 2017 when the Long Island Ice Tea Corp changed its name to Long Blockchain Corp, in what was quoted “the most bizarre reason”. In a statement, the company explained that they are “shifting towards the exploration and investment of blockchain technology.” Since then, the understanding of crypto has extended from a new marketing trend to an added cost-cutting efficiency.
Amazon and Starbucks rumored to adopt crytocurrency into their payment processes in 2018. And top of their list was Litepay; the reason being that Litepay offers instant crypto to fiat conversion and it’s free. But this is just one of the many choices Starbucks has named through its selection process; the others being Nano, Ripple, and Bitcoin. Now the company is joining Microsoft in backing the Intercontinental Exchange (ICE) in the creation of a new Bitcoin ETF marketplace. This is just a few sample of a myriad of positions companies are taking in a search to understand crypto and how it can help improve their businesses.
The banks are the primary entities affected by the change from fiat to cryptocurrency. Cryptocurrencies threaten their pocket (fees and interests); these will be obliterated in a trustless, fee-less transaction system. However, unlike others, banks can see through the noise and see crypto as an opportunity for immense profits. Therefore, they keep a stern face to the public to assure the public that their money is safer with banks than crypto currencies. But at the same time they invest in new crypto start-ups, buy exchanges, and join to create a crypto ecosystem of their own.
The Bank for International Settlements (BIS) composed of 60 international banksis among the large critics to cryptocurrency. But, at the same time, they are partners in consortiums like the R3 to develop a custom blockchain’s distributed ledger technology (DLT). So far, they have failed to copy Bitcoin’s design, probably showcasing their lack of understanding of Bitcoin. Case in point, IBM’s Hyperledger is proving to be a more successful model and ironically, it may be due to the inclusion of the “Stellar” cryptocurrency to their model.
The world’s governments are equally confused as everyone else about Bitcoin; some love it, some hate it. Japan is the largest trader of cryptocurrencies, however, China banned trading, mining, and ICOs. India, South Korea, Australia, and European countries also struggle with the question to whether accept, forbid, or control crytpo. In the U.S. the Commodity Futures Trading Commission (CFTC) considers Bitcoin a commodity, the SEC believed it was a security, and the IRS calls it a property. While California is a haven for companies developing the market, in New York, recent regulation requires companies to obtain a “bit license” in order to do business.
Bitcoin brought about a whole new micro-universe that is too extensive for most people to comprehend. The technology alone can be overwhelming, not to mention the rest of the potential applications. But Bitcoin is not as unrelatable as most people believe it to be. Bitcoin is simply a computer program that contains an encrypted ledger to record transactions. This program can have multiple applications, from financial, to manufacturing, record keeping, etc.
Known as a currency, it can be much more; limited only by the imagination of the user. As for businesses, the biggest misunderstanding is that Bitcoin is needed for everything. But it’s not. A lot of businesses DO NOT need a blockchain. The Western world has a fully developed monetary infrastructure that can do without Bitcoin. Therefore, Bitcoin doesn’t have to apply to everything and it doesn’t have to change everything. And yes, it has value; it offers new ways to do things differently and it has monetary value so long as people are willing to believe so.