Wale Arewa: A new world without physical notes and coins is fast approaching. The technology already exists for a cashless society where one is able to transact instantly in millions or millionths of a cryptocurrency from any mobile device anywhere.
This cashless society is made possible by pocket computers connected to the internet and the Blockchain to deliver ‘Trustless Transacting’. This IT revolution has already created a US $500-billion industry spearheaded by Bitcoin in less than 10 years.
Crypto Valley, a 30 000 employee village in Switzerland, is billed as the next Silicon Valley and is a hub of the ‘decentralised computing’ industry. For good reason, electronic voting, supply chain management and tax administration are a few use cases that are changing the world around ‘Trustless Transacting’.
Cryptocurrencies are ominous, largely due to that fact that very little is known about them. Governments are afraid to ban them for fear of stifling innovation but there are genuine concerns about the lack of regulation and anonymity that lend themselves to crimes such as tax evasion, terrorist financing and money-laundering.
Remove anonymity and one has a mighty Big Brother system where all transactions are verified and recorded. These blockchains are already transforming traditional systems. For example, Bitland is transforming land title registration in Ghana and Blockchain has the potential to deliver a death blow in the fight against fraud and corruption.
The cashless society, powered by the Blockchain, will transform rural communities by providing inward investment. Currently, the African remittance market is worth around US $40billion and is expected to double in the next 5 years.
This cash remittance market will consolidate from the current 210 plus FinTech companies that provide a slow, cumbersome and expensive service. It will transform to a cashless society where cryptocurrencies can be sent to your granny without having to pay anyone or any bank any of your hard earned money.
The speed of transformation is frightening communities, entrepreneurs and even corporate companies such as Pick ‘n Pay that have already trialled cryptocurrencies and rumours are abound that Amazon will soon accept bitcoin.
The down side is that the technology can be hard to grasp and the risk of losing your money is very real. Losing or exposing your private key can be detrimental, it is reputed that a third of all Bitcoin is frozen due to lost keys and that easily adds up to US $20billion of lost money in wallets on the Blockchain that cannot be spent or recovered.
Here’s the catch, the success of cryptocurrencies lies in the challenge of mass adoption and this is hampered by the new technophobes and Fear, Uncertainty and Doubt (FUD). On the other extreme, we have the technical savvy that have overcome FUD barrier and are leading the way to become early investors.
These people are likely to be under the age of 35 but also run the risk of being sucked into the Fear Of Missing Out. This is a phenomenon that saw Bitcoin take off like a rocket in 2017, creating a new asset class with many self-proclaimed crypto millionaires.
The cashless society has always been the ideal for authorities as it will give them more control of one’s income. No government has banned the use of cryptographic currencies, but they secretly foster the desire for mass adoption. They can’t wait for the day when babies will be issued with their cryptographic address that will represent a citizen’s ID number, tax number, passport number and of course, your cashless society number.
Wale Arewa is the chief executive of Xperien.