Though Bitcoin was created eight years ago, the currency is just starting to attract largescale mainstream attention. The digital currency uses Blockchain technology for a safer and more efficient way of transacting online without the use of banks or credit cards.
In an interview by PBS, Don Tapscott discusses potential uses of Blockchain technology. Tapscott is the co-author of the book entitled “Blockchain Revolution: How the Technology Behind Bitcoin Is Changing Money, Business, and the World.” Watch the interview below:
Pundits and investing professionals have called Bitcoin a bubble, since the price has increased an unbelievable 700% over the past year. While many wonder if such growth is is sustainable, Tapscott explains that the technology that powers Bitcoin is so transformative as to render the question moot.
Indeed, with the rapid growth of Bitcoin, the days of bankers may be numbered. Digital currency disintermediates banks, provides services to the unbanked and is more secure.
Traditional banking has seen fees grow steadily over the year, to the point where they make up about 40% of the average bank’s income, according to CNBC. Blockchain technology’s promise is simple: cut out the middleman (along with their exorbitant fees) and help secure financial transactions through a distributed ledger system. This results in fully decentalized transactions with relatively low fees.
Over 2 bln people are currently unbanked, and this number shows no signs of decreasing any time soon. Bitcoin is growing in popularity in developing countries, where it serves as a better, and bankless, way to send remittances. This is especially true in remote areas of the world, where banking centers are rare.
Better security and safe from chargebacks
Over $7 bln worth of chargeback fees are being shouldered by merchants each year. Bitcoin eliminates the ability for consumers to file fraudulent chargebacks, making it an attractive payment option for merchants. In cases where chargebacks might be genuinely warranted, companies such as Bitrated have developed an escrow-based system that gives both buyers and sellers recourse in case the other party doesn’t live up to their side of the transaction.
Blockchain technology is also secure, something many banks (and credit bureaus!) can’t say. Bitcoin’s Blockchain is secured with advanced cryptography that is mathematically unbreakable. While it’s possible that merchants or payment processors could be hacked, the Blockchain itself is secure.
Bitcoin is such a radically different product that it takes time for people to truly understand it. The good news is that as buyers and merchants begin to gradually experiment with digital currency and understand its usefulness and advantages, adoption should grow rapidly.