Digital currencies such as Bitcoin or Litecoin have had a mixed reputation in recent months. Initially considered a nerdy fad that would never catch on, currencies like Bitcoin went from having a relatively steady and modest value of around £500 per Bitcoin in early 2017 to soaring to its highest value of £14,748.90 at the end of the year.
Then, in the early part of 2018, we saw the cryptocurrency crash, making a Bitcoin today worth around £2,719. Such a volatile currency might put off future investors, but there are some interesting elements to consider about cryptocurrency behind the big boom and bust headlines.
As many will know, a principal of cryptocurrency is that it is deregulated, which means it is managed by consensus, rather than by a central authority. As a result, an unexpected side effect of the development of different sorts of cryptocurrencies is that they have become helpful for people living in authoritarian regimes, enabling them to make a protected living.
At an individual level, people living without bank accounts can gain some financial autonomy by being paid in cryptocurrencies, as they are not vulnerable to the whims of a dictatorial regime or the sorts of national financial crises we have seen in places like Venezuela over the past year. People who reply on support from family members who work abroad and send money home can use cryptocurrencies as a way of making sure that the value of such support is not reduced by international banking fees.
Alongside this, non-governmental organisations and charities can receive quick and free payments from benefactors thanks to cryptocurrencies without needing to rely on the often complex and sluggish mechanisms of international banking.
Digital technologies, and cryptocurrencies in particular, have been recognized as the tools of the future when it comes to subverting authoritarian regimes and sharing wealth in a more socially just way. If you want to learn more about the different sides to Bitcoin and other digital currencies, why not download our forthcoming Bitcoin Investment Course Diploma?