It is easy for those of us who live in the U.S. to see Bitcoin, and altcoins in general, only through the prism of the U.S. Dollar. The Dollar is, after all, still the world’s reserve currency, and is what most regard as “real” money. It could be, though, that the real value and potential of Bitcoin is to be found elsewhere, in developing countries and among the billions of people who currently don’t have access to banking services that we take for granted.
There have always been people who distrust their own currency and banking system, even in developed countries where the official exchange medium has a history of relative soundness; “gold bugs” are nothing new. That position is understandable following the events of 2007-8, but most observers would probably consider it an extreme one. Those who have not lived with the luxury of a major currency, however, have many more reasons to embrace alternatives.
Taken as a whole, governments in developing counties hardly have a reputation for fiscal and monetary responsibility. Moreover, even when the best efforts are made, the value of currencies in Third World countries is always in the hands of the market. Central banks in such countries are simply not powerful enough to impose their will on a foreign exchange market that has a daily turnover of over $350 billion, and extreme volatility is always too close for comfort. For people who have lived every day in that situation, the volatility of Bitcoin against major currencies is not that worrying. It is certainly not enough to outweigh the many advantages.
Even those who cannot seem to get their heads around the basic concept of a virtual currency can easily understand the point of the blockchain as a payment system. However, the ability to transfer funds instantly at minimal cost may seem like a marginal advantage over existing payment systems to some people who are comfortable with the existing banking and payment infrastructure in the developed world. To somebody who has been denied access to those systems for most of their life, though, it is revolutionary.
For a person in the Third World of an entrepreneurial bent, Bitcoin and the blockchain solve two basic problems. Firstly, compared to their own currency, Bitcoin offers the possibility of building wealth insulated from the corrosive effects of inflation. Right now, given the dramatic popping bubble that we have seen in BTC, that possibility looks remote. It will, however, take only a relatively short period of stability to make the currency more attractive than many local options. Now that we are back to roughly pre-bubble levels, that is a distinct possibility.
What the blockchain offers, on the other hand, is the chance to participate in commerce, either at a national or even international level. In order to do so, it is not necessary to have a bank account, just a phone. As strange as it would have seemed just a few years ago, that is something that the majority of people have, even in the poorest of countries. There are, of course, some mobile micro banking systems available to those people, but when both traditional and alternative systems are considered side by side and without one having the advantage of familiarity, the speed and low cost of transacting in Bitcoin looks like a much bigger advantage. We are creatures of habit, so starting with a new technology often makes more sense than switching to it.
The world of Bitcoin is prone to hyperbole. Supporters have a vision of there someday being only one global currency, resulting in the destruction of the existing order in banking. Opponents apparently see some scam or inherent evil in BTC and anticipate it self-destructing in short order. As is often the case in polarized debates, the truth is probably at neither extreme. There is no reason that Bitcoin cannot exist parallel to the current systems, offering a real alternative. When and if that situation is realized, it is the adoption of Bitcoin, or some future version of it, by entrepreneurs in the Third World that will fundamentally change lives and be truly revolutionary.