How cryptocurrency will change our everyday lives

in cryptocurrency •  8 months ago

When people think about cryptocurrency, they think mainly about money. But cryptocurrency is much more than only digital money.
But cryptocurrency can mean so much more to us in our future everyday life.

A new internet evolution.

The first computers were able to do some mathematical calculations and that was about all they could do. Still, it was a great help for scientists to be able to do complex computations in much less time.
Another great feature was to store data in a digital format.

The next big step in computer history were networked computers. Once computers were able to exchange data, the power of computers grew exponentially. Now, many computers could work in parallel trying to solve even more complex problems.

Linking computer networks with each other on a global scale formed the Internet. While previously, computers were mostly used by scientists, accountants, banks (and gamers), the Internet brought a whole new range of possibilities. This was the start of e-commerce, social networks, online video, …

Today computers are everywhere, your phone is a computer, your watch could be one, your thermostat, your car, …
Everything can contain a computer chip and can be connected to the Internet nowadays.
Sometimes these devices are much smarter than us, but they still rely on humans to make financial decisions.

Everyday problems in a modern world

If I want to sell an expensive item on Ebay, I don’t want to ship it until I receive my money. And the other party doesn’t want to pay until he received the item. So we end up working with an escrow service (for an extra fee).

Let’s say the buyer lives on the other side of the world. How does he pay? He could make an international wire transfer, paying a lot of fees to the bank, and it would take days for the money to reach the escrow service. Or he could use a credit card. But there could be a limit on his card if the item is too expensive. And if the amount is below the limit, he will pay credit card fees to make the payment and also suffer an unfavourable currency exchange fee.

So we end up paying escrow fees, bank or credit card fees, currency exchange loss and probably also a fee for eBay.

What if the seller is a company? Now he has to do his accounting or pay an accountant to do so. This means keeping track of all incoming and outgoing invoices and send them to the accountant together with bank statements. It takes a lot of work to do all this and he has to pay his accountant on top of that.

Now the company probably has a warehouse to store his goods. The warehouse needs heating/cooling and electricity, water, … This will be a significant cost in his operation. Maybe the owner will do a yearly evaluation of the cheapest supplier. Again, this will take up valuable time and prices change on a daily basis, so he won’t always have the cheapest rates.

How cryptocurrency can solve a lot of problems

Cryptocurrency can solve a lot of these problems.
First of all, using smart contracts, there is no need for an escrow service. A smart contract will have checks built in to release the funds only when goods are delivered.
Using cryptocurrencies, international payments can be made in a matter of minutes, with a very low transaction fee.
In our example, the total amount of fees could drop from around 10% to 0.01%.

When a company uses cryptocurrency for all his transactions, he can just enter his wallet addresses into an accounting software and let the software load every transaction from the blockchain. It’s a one time setup, no more work needs to be done afterwards. So no more work and no accountant to pay.

His warehouses will be equipped with smart meters for all utilities. They will be able to buy electricity, gas, water, … from the market at the best rate available. Because each meter is linked to a cryptocurrency wallet, there is no need for humans to be in the loop.

An overview of features and benefits

First of all, there will not be just one cryptocurrency that will replace the current fiat currency (like Euro or Dollar). There will be several cryptocurrencies for different purposes.

One reason is that you don’t want to give your devices direct access to your main wallet (your equivalent of a bank account). Having dedicated wallets with limited funds will limit the risk of losing a lot of money in case something bad happens. Today, bank accounts can be hacked and credit cards can be stolen, there will always be some risk when money is involved, although cryptocurrency will be much safer than today’s technology.

There will also be different types of cryptocurrencies. There will be public and private blockchains and some mixed solutions. If you run a business, there has to be some transparency. You need to report income and expenses to the government and your yearly report is published so other people can trust you as a business.
A public Blockchain will make it much easier to achieve this transparancy for a much lower cost than today.

But a private individual doesn’t always want to share all his details to the world. That’s why he may use a more public cryptocurrency to pay for expenses that he can deduct from his taxes (rent, utilities, …) but a more private cryptocurrency to pay for other expenses that he doesn’t want to share with the world.

All this may seem complex, but it will be very easy to work with multiple cryptocurrencies. Probably much easier than the way you have to set up a recurring payment in your banking app today.

Much more opportunities to come

This is only a very simple example of what is possible and what is to come. And it will happen in the next 5 to 10 years.

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