Its a new year, and I’ve definitely been remiss in updating my blog. That wasn’t one of my New Year’s resolutions but perhaps it should have been. 2015 is shaping up to be an excellent year for Bitcoin, with major funding flowing into the space and advancements being made on most fronts.
Major banks, trading firms, and other money institutions are finally taking notice. Bitcoin might be the first widely available currency of financial inclusion. The web was an on-ramp to the greater Internet and global connectivity, maybe Bitcoin is going to serve a similar purpose with respect to banking over the next ten years. Suddenly we have a mechanism to deliver value to consumers directly, regardless of locale. That means traditional banking services, such as storage, interest, loans and payments can be accomplished without the geographic, economic, and political boundaries that the banking industry has grown up around. These artificial constraints are breaking down as the friction for these services rapidly approaches zero.
We are already seeing remittances companies starting in almost every major market. From Mexico to the Philippines, the UK, Australia, Southeast Asia, Europe and Africa. Diverse companies are integrating with existing financial networks and cash delivery options, MPesa phone networks, general SMS, Email, Twitter, you name it. Bitcoin is the fastest, cheapest and most secure way to transfer money, and in the not too distant future will be the cheapest, fastest and most secure way to transfer anything of value. A click away from cash delivery directly to your mobile device or a custodial service, at prices that are simply unbeatable.
Western Union isn’t going down without a fight, and have managed to hold on to their share of the remittance market despite the fact that they aren’t terribly competitive. Unfortunately for them I don’t see a future where they are destroyed by a single definable competitor, rather its death by a million cuts as disconnected businesses all over the world eat away at their core business proposition. Consumers no longer have to be satisfied with local money options when a world of possibilities is available at the click of a button.
To some this might seem far fetched, it seems like a distant possibility that money and money services will be so fluid and so accessible that people in the farthest corners of the world will have access to the sophisticated infrastructure we enjoy in the west. If you are in the camp, think back to the distant past of 1993. In that good year there were approximately 130 websites. Just seven years later there were 17,087,182 websites. Now in 2015 there are over 968,882,453 websites. By 2016 we are projected to have over 2 billion smart phone users. That is 2 billion people walking around with devices in their pockets capable of transferring money directly to any of the other 2 billion smart phone users on the planet. Do you still think Western Union has a business model?
The Internet has uprooted industry after industry, largely through connectivity. Businesses that rely on these artificial boundaries are destined to be destroyed or radically changed. Banking is fortified at the heart of our society, it is responsible for money creation, and fuels the engines of capitalism, yet up until now has been sheltered from those same forces. Protected by geography, cemented by regulation. It’s time to adapt or die. Bitcoin is coming, and digital currency is here to stay. Interesting times ahead.