Innovation & Blockchain
This word is used a lot when it comes to blockchain, but is it really true? Will blockchain change the world?
The short answer is yes. The long answer gets a bit more convoluted. Innovation is the introduction of a new idea, process or product and Blockchain checks off all of these categories. It is an immutable, distributed ledger system that makes information transparent and incorruptible.
It is like writing a history book based on the facts and being unable to change it to suit a political or national point of view. In the blockchain world, there are no geographical or geopolitical boundaries. It is truly free market and does not bend to the will of governmental intervention.
Used properly, blockchain technologies will change the world and how we do business.
Innovation vs Currency Conversion
Here is where the road splits in two and this is the reason WhoTakesCoin exists. As experts in the blockchain industry, we are here to guide businesses through the labyrinth of possibilities in this new and exciting space.
Businesses in this space can be categorized as innovators or currency converters and there is nothing wrong with either because they are both necessary, but some mistakes have been made along the way. The failure of so many ICO's (Initial Coin Offerings) is a perfect example.
When a company creates a new process that utilizes the true strengths of the blockchain such as cross-border verifications or record validation and storage, then this company has a specific need to own their own blockchain or utilize someone else's blockchain. If a company wants to host a blockchain for others to use, then that company has a need to create a blockchain. With a blockchain comes a potential crypto currency if the blockchain owner wants to create a currency.
This is innovation, or creation of a new process, that utilizes the strengths of the blockchain. If you want to know more about the blockchain, visit Coin 101 - What is a Blockchain. There is a legitimate need for a blockchain.
Currency Conversion
Now let's look at the other side of the coin - Currency Conversion. First, we have to make sure that you understand our position here. There is a definite time, place and purpose for currency conversion, especially at this point in time when fiat is the primary means of exchanging value. We will look at this in just a moment.
Second, where so many went wrong is in trying to pose as innovators to sell coin and gain interest in their proposed ICO, when they were really just currency converters. What do we mean by this?
Blockchain data storage is in the range of 25% less efficient to manage than any transactional, relational or big data store. It does not make economic sense to put data on a blockchain that can be processed and stored normally. Individuals and companies tried to put the square peg in the round hole and it just did not work. This is not counting for the inability of some to execute strategic business plans and the few who were just out for a quick buck.
Of those who were earnestly trying to build an organization around a blockchain, most did not make economic sense, so they failed.
Accepting Crypto as Payment
Back to the first point. There is an unquestionable argument for currency conversion as a business. It is called being a merchant. When you look at the Adoption Curve for bitcoin, you will see that there comes a time when the market will reach a "tipping point" for the adoption of crypto as a mainstream payment system.
Most governments are doing everything they can to stall this adoption so they can figure out how to capture or control this currency, but that is simply an illusion over time. While there are steps that governments can take to become mainstream alongside crypto currencies, they are woefully behind the curve of figuring out how to do it.
By the time they figure it out, it will probably be too late for most and we will see a financial paradigm shift like no other. If you notice, it has already begun with crypto making a lot of new millionaires. And while there is a lot of FOMO in the marketplace, the long-term players understand that crypto is just getting started.
Currency conversion is simply a matter of changing one currency into another and, if you look at it just a little bit differently, you will see that merchants have been converting currency since the dawn of time. You see, currency is simply a liquid store of value. While value can be defined as anything that can be used to trade for another item of value, liquid store of value just means that it can be more easily traded.
Barter was the original process by which people traded one item for another, but this was inconvenient, so currency was invented and has not changed since the advent of merchant sales. Stores of value such as grain or precious metals were difficult to exchange and difficult to determine any type of rate of exchange. Governments created currency with a pre-defined value and viola, here we are at today's method of doing business. Exchange a good or service for a pre-defined amount of fiat currency.
So then what is the problem you ask. The problem is that the government controls the currency. There is a lot of value in national banking systems and the order they maintain in the marketplace. There are also a lot of significant issues as well. The most important of these, beyond currency manipulation, trade restrictions and government waste, is inflation and debt.
Currently, interest rates in the United States are artificially low. The reason for this is lost on many, but the sheer amount of national debt would be unserviceable if the interest rates were to go up. This, in turn, would put extreme pressure on our ability to pay our interest on debt forcing us to either print money or default on the service payments.
The government can contain interest rates for only so long and this scenario is not just in the USA. Many are in the same boat, just on a much smaller scale. Add to this all of the other risk factors in the world such as oil currency baskets, global unrest, Brexit and even political ideology. All it takes is for one card to give way. Introducing cryptocurrency as a deflationary (fixed supply), global and highly liquid store of value.
And here we are back at crypto currency, which is a by-product or subset of blockchain. There is no question that blockchain is an innovative technology that will play a significant role in our future. It is only a matter of the time it takes to incorporate this technology.
There is also no doubt that the currency conversion space is crucial to commerce and that merchant acceptance of crypto will occur naturally. Use of crypto as a form of payment will play a huge part in the adoption of cryptocurrency as a mainstream, liquid store of wealth.
The only question is, "Where do you and your company fit in all of this?" WhoTakesCoin can help you figure it out.