Bitcoin proves its success for emerging markets’ unstable economy
Especially on such bloody days, despite the fact that Bitcoin lost 70% of its value since the beginning of 2018 – let’s discuss the first and main reason why Bitcoin is here to stay for the longer term.
In recent months, Bitcoin seems to have found its true calling amongst the citizens of struggling emerging markets. Countries like Venezuela, Zimbabwe, Turkey, Puerto Rico and Iran have all fallen victim to poorly managed centralized governments. Their leaders have kept a tight hold over their countries economic and financial systems, leading to highly inflated currencies and an inability to get access to other alternative forms of fiat money.
While many people in developed western nations see Bitcoin as nothing more than a ‘potentially’ convenient way to send and store money, for those living through the failed economic systems of certain emerging markets, Bitcoin is literally a lifesaver. It’s the only technology that they can utilize to keep their money safe and provide for family members in desperate situations.
It’s about safety and security rather than block size
Towards the end of 2017 and most of 2018, there has been a lot of commotion over the ‘protocol wars’, and which blockchain will win by scaling to achieve thousands of transactions per second. Although this area of the blockchain industry is crucial to mainstream adoption, I actually believe peer-to-peer currencies like Bitcoin as well as Dash, Monero and Zcash, will outshine the protocol coins in the long term.
When you’re a student living in Venezuela, and each day your savings are being drained to zero due to hyperinflation, the last thing on your mind is how many transactions per second a blockchain can achieve. All you really want is an asset class that is safe and secure for you to store what little money you have left. Despite the 70% decline in Bitcoin this past year, many in countries like Venezuela and Zimbabwe would still consider Bitcoin a much more stable currency that their own national currencies.
Underdeveloped nations have a very different perspective on how a functional banking system operates. For most citizens in these countries, it’s a miracle if money can be sent to friend or family member within 2 weeks, without losing as much as a third of its value. Meanwhile, in developed nations, we see Bitcoin as the technology that’s going to reduce our money transfer wait times from 3-5 days to a couple of minutes, and our fees from decent percentages to a tiny fraction of percent. With this comparison, it’s easy to see how BTC can easily be viewed as a ‘want’ in places like the US, Europe, Japan, and South Korea.
Conclusion
Ultimately, I believe that what will fuel the next major bull run won’t be ETFs or new milestones in protocol transactions per second, it will be a sudden surge of millions of citizens from emerging markets buying Bitcoin as their governments inflate their currencies, enforce censorship, oppress their freedom to spend and control their access to international goods. For these reasons, peer-to-peer crypto currencies may far surpass the rest of the crypto space when it comes to mainstream adoption in the long term.
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