May 22nd was the annual celebration of Bitcoin Pizza Day. As funny as the name may sound, it marks a milestone in the story of cryptocurrency. May 22nd, 2010 was the day where Laszlo Hanyecz was the first person in the world to purchase a real item for the cryptocurrency. He ordered two large pizzas and paid 10,000 BTC for them. Back then, of course, 10,000 BTC was the equivalent to $80. Today, the same amount of Bitcoins would be worth around $70 million, and they would’ve been the world’s most expensive pizzas. Today, the world of cryptocurrency also looks very different from 2010. There are over 1,500 different kinds of tokens in circulation, and you can buy a whole lot more than pizza with them. So what can cryptocurrency actually do for our society, and for the world as a whole? Let’s have a look at some of the issues cryptocurrency could help us address.
A new economic system for the developing world
The R&B music superstar Akon recently announced his plans to launch his own cryptocurrency, AKoin, and the building of the Akon Crypto City in Senegal, where AKoin will be used. The reason for this project, as explained by Akon, is that the citizens of many African nations suffer under the hands of a corrupt and unstable government. This means that their economy is very difficult to maneuver, and a cryptocurrency system would benefit many Africans. In a country rife with fraud and uncertainty, the blockchain ledger technology underpinning cryptocurrencies could be a massive improvement. Africa is not alone in being able to benefit from this system. It is estimated that over 2 billion people worldwide have access to the Internet, but not financial services.
No bank, no problem
Not only will the citizens of developing nations be able to purchase and sell goods and services using cryptocurrency, they will also be able to send more money abroad. Traditional banking services will gladly charge an arm and a leg to facilitate international money transfer. In stark contrast, it costs a few pennies to send money using cryptocurrency platforms. In countries were a few pennies can stretch a lot further than they can in the West, this is a big deal.
It is already happening
Although it is not a reality in the majority of Africa, some countries have already jumped at the opportunities offered by cryptocurrency. Kenya is a great example of this, where a third of the population have a digital wallet. Last year, in 2017, cryptocurrency accounted for 2% of Kenya’s GDP. This alone is impressive, yet they are still behind Nigeria, in which 3.5% of the country’s GDP is accounted for by cryptocurrency. Russia is even further ahead, with 5% of their GDP stemming from the use of cryptocurrency. Compared to these countries, the United States is lagging far behind. In the US, only 0.17% of the GDP is due to the use of cryptocurrency.
Do you think there is a future for cryptocurrency in developing nations? And how will they make the transition from fiat money to cryptocurrency? Leave your comments in the section below!