How Crypto Will Change the World

Peoples’ thoughts and opinions regarding cryptocurrency vary wildly. Depending on who you ask, Bitcoin and the altcoins that came after it can be described as anything from worthless and speculative to truly paradigm-shifting. Generally, we can group people and their beliefs about cryptocurrencies into one of three levels of confidence:

1. Complete lack of confidence in cryptocurrency. These people believe that the technology is either useless or that it will never stand a chance at real adoption because things like regulations and government intervention will prove to be insurmountable.
2. Cautious confidence in cryptocurrency to earn a place in the world. This second group sees cryptocurrency at face value. Yes, it can be used as a storage of value, a method of exchange, and for some other utility – but its ability to create real change is minimal or moderate, at best.
3. Complete confidence in cryptocurrency to change the world. True crypto believers see blockchain technology and the cryptocurrencies built on it as revolutionary; these diehard supporters believe the world is destined to be changed by cryptocurrency.

Individuals in Group 1 and Group 2, beware:  this article is written from the optimistic perspective of Group 3.

It might seem unlikely at the moment, but people that have a real understanding of blockchain technology (and the cryptocurrencies built using it) know that cryptocurrency isn’t going anywhere anytime soon. It’s not going to fade away and it can’t be stopped. Sooner or later, cryptocurrency will change the world.

Understanding the Difference Between “Blockchain” and “Cryptocurrency”

The terms “blockchain” and “cryptocurrency” are used almost interchangeably, but it’s important to know the difference between the two. For example – we could say “Blockchains will change the world,” or “Cryptocurrency will change the world.” Most people who agree with one statement would agree with both, but blockchains and cryptocurrencies are two separate entities.

Blockchains are ledgers, or lists of transactions, that are stored digitally and distributed amongst a network of computers. When we say that blockchains are “decentralized,” we’re explaining that these distributed ledgers are not stored in any one place or controlled by any single authority; instead, they are available to anyone that wishes to view them.

Cryptocurrencies are digital currencies. The reason that “blockchain” and “cryptocurrency” often get confused is that almost all cryptocurrencies use blockchains. To date, there are thousands of different cryptocurrencies that offer different features and operate for different purposes. At their core, though, most cryptocurrencies share two main characteristics:

1. Blockchain technology. Almost all cryptocurrencies use blockchains.
2. Decentralization. Cryptocurrencies are usually considered decentralized; they are not controlled by singular authorities.

Now that we’ve taken a step back and separated blockchains from cryptocurrencies, we can go deeper and talk about how each entity can be truly revolutionary.

There are important reasons why nearly all cryptocurrencies use blockchain technology. But what makes the blockchain so essential? Let’s address some huge benefits of blockchain technology, one by one:

• Security. By using advanced cryptography (code making and breaking) and decentralization, blockchains make it extremely difficult for hackers to tamper, steal, and gain control of cryptocurrencies.
• Speed. Usually when people talk about blockchains, they’re talking about their usage for storing and transferring value. There are countless other possible uses, but storing and transferring value is arguably the most important cryptocurrency use case right now. For these purposes, blockchains are faster than any other option.
• Efficiency. Efficiency equals cost and effort, especially when it comes to storing and transferring value. Blockchains make it quick and cheap for users to accomplish their goals when compared with other options.
• Decentralization. This word comes up a lot because it is extremely important. One of the biggest reasons, if not THE biggest reason, people are so excited about blockchains is that they give us a way to take power away from the oppressive, unpredictable, and untrustworthy authorities and give it back to the people – in banking and other realms.

We can think of blockchain as a very powerful technology. As an analogy, we could compare the way atomic bombs rely on nuclear fission reactions to the way cryptocurrencies rely on blockchains. Blockchains change the world by making cryptocurrencies possible.

Now that we understand that cryptocurrencies are built on blockchain technology, we can begin to see their properties. Security, speed, efficiency, decentralization – they all sound great. But how does it all come together? How can cryptocurrency actually change the world?

The list goes on and on: vacation rentals, gambling, cloud storage, content distribution, etc. Almost anything that’s being accomplished today will be improved with blockchain technology – and that means it’s only a matter of time before a cryptocurrency is developed to topple the major institutions that control today’s markets.

With their power to connect individuals without middle-men, cryptocurrencies allow people to do business and collaborate in ways never previously thought possible. For instance, smart contracts are one of the most promising innovations introduced by cryptocurrency.

Smart contracts are digital agreements that self-execute when their terms are met by all parties or automatically cancel when one or more parties fails to meet their terms. Smart contracts give people a fast, automatic way to do business with each other and may go a long way to alleviating the legal mess and nonsense that’s so prevalent in our modern society.

In his landmark 2005 book The World is Flat, Thomas Friedman explained the way technology (especially the Internet) was facilitating interaction between countries that was impossible in the past. Indeed, the Internet removed obstacles between countries and cultures in a huge way. However, cryptocurrency – when fully adopted – will strike the finishing blow to cultural separation.

Due to their decentralization, it’s impossible to say where most cryptocurrencies are “based out of” or “located.” We can say where the companies that develop them exist, but once they are launched, cryptocurrencies are their own entities, distributed amongst their users.

It doesn’t matter if their users are American or Korean or Russian; any person who deems a cryptocurrency useful can use it. This allows the seamless transfer of value (and countless other things) between individuals that live anywhere. Accomplishing the same things without cryptocurrency would either be impossible or require both parties to deal with numerous obstacles.

As we’ve seen many times in the past several decades, the individuals that adopt, understand, and utilize new technologies first are the ones that stand to gain the most from it. When email first arrived, some people took advantage of it immediately. Others resisted it for years, but still ended up using it, anyway. This same pattern is followed with every new technology, and cryptocurrency will not be an exception. You will end up using it, whether it’s today or in ten years.