Beyond bitcoin: How cryptocurrency is changing the world
‘We’re in the biggest experiment in human history,’ says blockchain expert
"It's a beautiful, beautiful sunny day here as it typically is," says Ethan Erkiletian from Nassau, Bahamas.
Half a year ago, Erkiletian moved to the Island of New Providence, a move he said his investments allowed him to make, "cryptocurrency being the primary driver."
He first got interested in cryptocurrency in 2012. Today, he works as a consultant for individuals and businesses interested in learning about how the blockchain technology behind cryptocurrencies will impact their industries.
Bitcoin is the most well-known cryptocurrency, with good reason; its price has been hovering around $20,000 per bitcoin lately, increasing more than 1,600 per cent since the start of the year.
It's also an extremely volatile investment. In December alone, its value rose almost 80 per cent, and then dropped by 40 per cent on Dec. 22 before slowly climbing back up. Many experts say the bitcoin craze is a bubble that's sure to burst.
More than just bitcoin
While bitcoin is the most recognizable, there are actually more than 1,300 cryptocurrencies currently available, and the list is growing.
Bitcoin was the first, created to replace cash, but not all cryptocurrencies are designed with that goal in mind.
Ameer Rosic is the CEO of Blockgeeks, a Toronto-based company that trains blockchain developers. He compared the blockchain technology behind cryptocurrencies to peer-to-peer file sharing programs like Napster.
"Now what blockchain is, it's a peer-to-peer network, but imagine having a peer-to-peer network of computers that nobody controls and owns. That if one computer does an update, all of the computers are updated automatically, and that every single computer double checks each other to make sure no one is cheating."
Blockchains are tracking systems that don't rely on a third party. That means any centralized authority that we give our information to is open for disruption, including everything from banks and governments to ride-sharing services.
"Blockchain is about controlling your own data," Rosic said. "Whether that is money as data, whether that is me voting as data, whether that is me communicating with someone as data, or whether that is me controlling my personal information as data."
We're in the biggest experiment in human history when it comes to money, identity, and freedom of expression.- Ameer Rosic, CEO of Blockgeeks
Developers all over the world are working on creating systems that use blockchain technology.
"I think we're in the biggest experiment in human history when it comes to money, identity, and freedom of expression," Rosic said.
Even though he's excited about the technology, he's concerned that in Canada, the focus is in the wrong place. People are jumping into the cryptocurrency market hoping for financial gain, but he said he sees so much more potential than that.
There are about two billion people in the world who do not use banking. In some cases, Rosic said that might be because it's unsafe for them to reveal their identity to their government. A digital identity created with blockchain technology or an online cryptocurrency account could help billions of people worldwide.
"Imagine the opportunity to have online digital identity where you don't have to reveal your actual legal name, where this string of numbers represents who you are legally."
Several countries that have had problems with their own banking and currency systems are already using bitcoin. Greece, Syria, and Venezuela are notable examples.
"Right now all a person really needs is an Internet connection and a cell phone, and we can wire them cryptocurrency, and... literally within five minutes they have 20 bucks on their phone and now they have an underground market there where they can sell food and support their families."
For those living in countries like Canada where our banking system is relatively stable, there are still benefits to tracking information, Rosic said.
"We want our taxes to go to good use; we don't want money to be misappropriated in any way. So imagine if the government had an open ledger where you and I as citizens of Canada could actually see where our federal taxes go and how it's being used."
Your life, distributed
Erkiletian, who is also passionate about the possibilities for struggling countries, works with companies that are preparing for the disruption cryptocurrency and the blockchain might bring.
He sees the technology disrupting Airbnb, Uber, the Swift network for international financial transactions, and more.
"Money is a messaging system; it's how we communicate value to one another and blockchains have introduced a new way of doing that," he said.
Most of the projects cut out the middleman, allowing people to connect directly, and eliminating the fees third parties charge for their services.
Erkiletian said any industry has the potential to be disrupted if it has a centralized system that could be automated or decentralized.
"When we talk about disruption, we have to realize that disruption entails change, and change can be painful in some respects, but overall it's immensely beneficial."