Jay Singh is Founder of ClearCoin, a technology company that powers the real-time buying and selling of advertising on decentralized applications and the broader digital environment.
A number of events in 2017 have caused a spate of news about cryptocurrency and blockchain. Bitcoin’s bull rush to $10,000 per coin and over $3.5 billion of Initial Coin Offering (ICO) fundraising are two things that are likely to change the business landscape permanently.
Blockchain has come with many promises to reform the business and financial landscape. The most notable is solving the double spending problem for digital currency. The reason digital currency did not work prior to Bitcoin was the double spending problem. How does one know if the digital currency was only sent to one person and not two people? The blockchain solves this by keeping a distributed ledger of transactions that can be reviewed by different sources.
Cryptocurrency helps people transact around the world at a much lower cost than what banks and financial services companies offer. A person can send money around the world much cheaper than before. A number of blockchain and cryptocurrency solutions are intending to solve the problem of the 2.5 billion unbanked people in the world (such as lalaworld.io). Some people around the world don’t have access to banking and now they will. A mobile phone and a cryptocurrency wallet can help them access capital in ways that were previously inaccessible.
In addition to helping people in underserved nations, cryptocurrency helps close the gender gap. Paul Vigna and Michael Casey’s landmark book The Age of Cryptocurrency starts with a story about a young woman in Afghanistan who buys her own laptop with Bitcoin. As a woman in her part of the world, she is unlikely to have a bank account. With cryptocurrency, her opportunity for independence has increased.
One reason for ICO popularity is good companies all over the world can now raise money without having to go to the same small group of gatekeepers. The small number of venture capitalists (VCs) in Silicon Valley control much of the early stage capital. With the explosion of popularity of ICOs, some of those VCs may feel they are being pushed out of the equation. The rise of ICOs as funding method means that end users, not the VCs, get to decide. People around the world are voting with their dollars on what gets funded – and it doesn’t have to be in Silicon Valley.
Between helping unbanked people, closing the gender gap, and disintermediating the fundraising process, the powerful impacts of blockchain and cryptocurrency are only beginning.