GLOBALIZATION TECHNOLOGY & SOCIAL CHANGE
Source: https://img.wonderhowto.com/img/37/83/63583840306353/0/cryptocurrency-for-hackers-part-1-introduction.1280x600.jpg (Accessed 20171010)
By Rafael Collado
The invention of currency is one of the most fundamental inventions in our history. The ability to market goods and services to be purchased with commodities played an important role in developing society, as we know it today. However, disappropriate wealth distributions in America and around the world leave the middle class and poor yearning for a way for to catch up. As an example the median income of the upper income families in America has gone up from 40 to 75 percent that of their low income counter parts (from 2007 to 2016) [1]. Volatile currencies make it impossible for people around the world to get life necessities. With the creation of cryptocurrency we now have the ability to distribute money faster and cheaper than ever. As well as the ability to distance us from the banks that charge excessive fees just to hold our money. Coins like Bitcoin provide an avenue for investment opportunities as its growth in value has been like nothing we’ve never seen before. Bitcoins and the like can possibly become international currencies given their popularity and real world applications.
What are Cryptocurrencies?
http://numismax.com/wp-content/uploads/2014/05/coin-collection.jpg (Accessed 20171217)
Cryptocurrencies are a virtual form of coins in which all transactions are secured using cryptography. The establishment of coins such as Bitcoin helps destroy the hegemonic hold the government and banks have on our money. Just like money we can store Bitcoins in our wallets. Rather a virtual wallet, which we can access from our phones or computers. Just as money has real world application we can use Bitcoins to buy and sell items in the real world. Examples of the things you can buy include but not limited to a car [2], a house [3], food and art [4]. With the popularity of Bitcoin there was a wave of companies and individuals who rushed to create their own coins. These coins are called Altcoins and there are over 1300 coins with a total market cap of $599,493,317,628[5].
Cryptocurrency the new money
What makes Cryptocurrencies money [6]? Considering the fact that Cryptocurrencies can be easily described as money due them meeting the four “qualities of a useful commodity for indirect exchange [as follows:][6]”.
- Portability. Cryptocurrencies …[easily exhibit this attribute as it is kept in the cloud or on your virtual wallet, which can be accessed through an application on your phone. In addition to being accessed by a web browser]…. It is no more difficult to send…[any] amount across the world [as well as to your neighbor]...across the street.
- Durability. Though coins can be “lost,” they will not get worn out or depreciate.
- Divisibility. Bitcoins are divisible to eight decimal places. In principle, there is no technical limit to divisibility a protocol might allow.
- Security. As noted earlier, protocol-level theft and counterfeiting are extremely difficult, [thus making it pretty secure], although…[these established protocols cannot prevent other common]…types of theft and fraud…[due to]…social engineering [6].
Applications in real life
https://static1.squarespace.com/static/53debd6de4b0428806563646/t/53f7e15be4b05c22548e2ded/1408754012336/Real+World+Applications.png (Accessed 20171215)
Have you ever had to transfer money through Western Union or MoneyGram? Fees for using these services can be extremely costly. For example the average cost for sending $200 money to Africa will be about 12% [7]. The Overseas Development institute estimates that theses fees cost Africa $1.8 billon a year [7]. Its no wonder that Bitcoins use is booming in Africa. In comparison when using a service called Beam in Ghana it cost just 3% instead of 12%. Not only is there a difference in cost, it takes 7 days for the transaction to complete using traditional services. Where as with Beam and similar services it take up to 20 minutes [7]. Due to the availability of services like Beam an influx of Africans have transitioned to using Bitcoin. Shorty after an ATM was made available in Johannesburg, which charges a commission of 5% but allows them to change their local currency to Bitcoin [7]. This further expands the possibly for wealth accumulation as the value of Bitcoin has only been increasing.
Investing in cryptocurrencies
Screen shot of https://coinmarketcap.com/ (Accessed 20171019)
Screen shot of https://coinmarketcap.com/ (Accessed 20171217)
Bitcoin and Altcoins have created an opportunity for people around the world to accumulate wealth. The price of Bitcoin has quadrupled over the last 2 months to its current price of over $19,000. Anyone who purchased some Bitcoin have realized gains never before seen in any markets. You may be thinking who has $19,000 to invest on Bitcoin. The fact is that you can purchase a really small faction of a whole bit coin. For example look at the purchases of Bitcoin and Litecoin that i placed below.
As you can see I purchased .0005284 of a Bitcoin when it was valued at just about $17,000 for $10. As well as 1 Litecoin in July for $46.05 and selling it for double the price after I bought it about 5 months later. Which I wish I still had as the current price of a Litecoin is just over $300. As Bitcoin continues to grow it will provide a source of income for the people in Africa who are exchanging their local currencies to it. As well as to many others around the world.
Conclusion
Bitcoin and other Altcoins are in a position to change the world, as we know it. Just as all those years ago the establishment of commodities did. From its use to helping us distance ourselves from the expensive fees of banking and transferring money around the world. As well as its potential of continued realized profits, Bitcoin is paving the way for us to break the hegemonic hold on our future wealth.
Areas for future research include:
1. Should cryptocurrencies be realized as the global currency, in what ways may the international governments unite to regulate them.
2. Given that Bitcoin was successful in its implementation of blockchains, should we petition for our current banking and wire transfer services to implement blockchain as a means for cost and time savings.
Areas for future research include:
1. Should cryptocurrencies be realized as the global currency, in what ways may the international governments unite to regulate them.
2. Given that Bitcoin was successful in its implementation of blockchains, should we petition for our current banking and wire transfer services to implement blockchain as a means for cost and time savings.
Research Methods
http://3.bp.blogspot.com/-Yy39sWNdzpM/VPEM1t-I8NI/AAAAAAAABiM/HMfX4AdbET4/s1600/2A%2B-%2BResearch%2BMethod.jpg (Accessed 20171217)
Research Methods included utilizing Academic Search Complete for primary and secondary sources. I was able to find more secondary sources as the primary ones focused more on other topics regarding cryptocurrencies. After which I analyzed the material and cited accordingly. Additionally I relied on my own experience and knowledge with cryptocurrencies.
Sources
[1] DePillis, L. (2017, November 3). In America's wealth gap is bigger than ever . Retrieved from money.cnn.com/2017/11/03/news/economy/wealth-gap-america/index.html
[2]Hicken, M. (2013, December 12). In Someone bought a $100,000 Tesla with Bitcoins. Retrieved from http://money.cnn.com/2013/12/06/autos/tesla-bitcoin/index.html
[3] Oberholtz, C. (2014, May 20). In Bitcoin used to buy $500,000 Kansas home. Retrieved from http://www.kctv5.com/story/25568078/bitcoin-used-to-buy-500000-olathe-home
[4]Pagliery, J. (2013, November 6). In 8 things you can buy with bitcoins right now. Retrieved from http://money.cnn.com/gallery/technology/2013/11/25/buy-with-bitcoin/7.html
[5] (n.d.). In Cryptocurrency Market Capitalizations. Retrieved from https://coinmarketcap.com/all/views/all/
[6]HARWICK, C. (2016). Cryptocurrency and the Problem of Intermediation. Independent Review, 20(4), 569-588.
[7]Breaking the bank: Bitcoins hit Africa's money transfer traditions. (2015, February 17). CNN Wire. Retrieved from http://link.galegroup.com.central.ezproxy.cuny.edu/apps/doc/A401931521/AONE?u=cuny_centraloff&sid=AONE&xid=63ac75a5
[1] DePillis, L. (2017, November 3). In America's wealth gap is bigger than ever . Retrieved from money.cnn.com/2017/11/03/news/economy/wealth-gap-america/index.html
[2]Hicken, M. (2013, December 12). In Someone bought a $100,000 Tesla with Bitcoins. Retrieved from http://money.cnn.com/2013/12/06/autos/tesla-bitcoin/index.html
[3] Oberholtz, C. (2014, May 20). In Bitcoin used to buy $500,000 Kansas home. Retrieved from http://www.kctv5.com/story/25568078/bitcoin-used-to-buy-500000-olathe-home
[4]Pagliery, J. (2013, November 6). In 8 things you can buy with bitcoins right now. Retrieved from http://money.cnn.com/gallery/technology/2013/11/25/buy-with-bitcoin/7.html
[5] (n.d.). In Cryptocurrency Market Capitalizations. Retrieved from https://coinmarketcap.com/all/views/all/
[6]HARWICK, C. (2016). Cryptocurrency and the Problem of Intermediation. Independent Review, 20(4), 569-588.
[7]Breaking the bank: Bitcoins hit Africa's money transfer traditions. (2015, February 17). CNN Wire. Retrieved from http://link.galegroup.com.central.ezproxy.cuny.edu/apps/doc/A401931521/AONE?u=cuny_centraloff&sid=AONE&xid=63ac75a5