The recent slide of Bitcoin value after peaking earlier this year as well as the on-going concerns about lack of regulation plus the obvious problems that come from decentralized system, has given more amour to those hostile to crypto-currencies.
However, the problem with critics of crypto-currencies is that they miss the whole point of Blockchain technology or at least, they don’t appreciate the unintended benefits it has had on long marginalized communities.
This innovation has survived and will survive one way or the other because it serves a need, period! In the developing world, we have lived in societies where we have had these regulators but worse things have happened right under their watch. In fact, there is evidence that those entrusted with the job to protect ordinary people actually initiated the acts that ultimately destroyed livelihoods, savings and pensions for instance.
So when we see the same institutions rushing to condemn an innovative product just because it threatens their power or position, then we can only conclude that crypto-currencies are the only way to go. Naturally, Bitcoin and Blockchain technology are still mystical subjects in many parts of the developing world, we are almost always the last ones to adopt new technologies but when they are eventually widely understood, you can be assured of major disruptions.
To illustrate, a few years ago, a mobile phone company in Zimbabwe, Econet Wireless introduced a money transfer business, Ecocash. When it started, there was obvious skepticism because people did not know or have enough information but after a few years of taking it in, the rate of people registering to this transfer service increased exponentially. It did not take longer before conventional banks began to murmur about the disruption this service was causing to their operations.
Banks had pretty much operated like a cartel, they all charge exorbitant fees and in spite lobbying efforts to have these lowered, nothing much has changed. A significant portion of banks’ incomes still comes from fees and other bank charges, and this has long been a key reason why significant amounts cash remain outside the banking system. Ecoacsh threatened or stopped further growth of this income stream, suddenly the company faced hostility from everywhere.
In addition, the same concerns about regulation were raised because Econet Wireless, had suddenly become one of the biggest players in the financial services industry, yet it was not regulated by the central bank. Hostile banks went to the extent of blocking their clients from linking or transferring money from bank accounts to the mobile service, even as customers demand this.
A few years later, banks have essentially capitulated, the Ecocash service remains strong and one of the reasons is because it has brought financial inclusion to millions who were previously excluded from accessing financial services. More importantly, the fees incurred for using the service are relatively small and are only levied when one initiates a transaction. This is very much unlike local banks that deduct service fees every month irrespective of whether a client performed a transaction or not.
Obviously there are a few problems with the service but the fact that this service remains popular is testament that this innovation has become an integral part of ordinary folks’ lives. The only way to address the problems that may be inherent with Ecocash is a by creating another innovative product, not restraining or banning it.
So when we hear of a new technology that promises even better benefits—including curtailing the out of control central bank system—then we naturally welcome such an innovation.
This is what most global financial elites do not get, these technologies give a voice to those often ignored by the present system. We may not know how the Bitcoin story is going to pan out, but we are certain that if the problems that led to its rise are not addressed, then the central bankers and those attempting to stifle this novel technology can be assured, it will remain in place or better still, a much cooler innovation will emerge.
In fact, the concerted effort by the suddenly now benign billionaires and monetary authorities to discredit crypto-currencies may have the opposite effect, it raises suspicion about their true intentions. Those responsible for the 2008 financial meltdown cannot really claim to know what is best for those in Iceland, Egypt or South Africa who were affected by that recession even though it (recession) happened primarily in the United States.
In 2018, the crypto-currencies had a roller-coaster ride that had early adopters worried but the underlying benefits they bring ensures the technology will stay on, in one form or the other. As more and more people become knowledgeable about crypto-currencies, the price volatility and other niggling problems will dissipate just like what happened with the internet.
The coming year will see more changes to crypto-currencies as the movement attempts to self correct and when this process eventually ends, we will have a much better alternative system.
No comments:
Post a Comment