Imagine this: you travel back in time twenty years and whip our your fancy smart-phone and show it to the first person you see in the street. It's likely that the other person will start fondling your cellular device as if it were some foreign, military-grade top-secret piece of machinery (well maybe not, but they would be surprised at how fast technology would be evolving).
Now imagine this: you travel back twenty years, and instead of showing off some new-age piece of equipment, you inform that person in the street that one day they'll be able to do their shopping and buy clothes with some obscure online currency. Crazy, isn't it?
Nowadays, computers and electronics adorn nearly every person's study, bedroom, and living room, and the technology we currently have at our disposal will most likely be nothing compared to what we'll have in, say, the next ten years. But as our society moves towards an era of dematerialized goods (like music and film downloads) where things can be uploaded in one place and downloaded from the other side of the planet, people are starting to wake up to the fact that files, online sharing and e-commerce can only mean one thing: the dematerialization of currency.
We are increasingly becoming dependent on our wireless devices, and services across the globe are shifting their outreach to a larger online audience. Everybody is interconnected, and it's only natural that paying online with a cryptocurrency is a logical step in the right direction. Most retailers accept paypal as a valid means of payment, and other firms are setting up their own online payment methods (like Amazon for example).
But what does this all mean for our beloved cryptocurrencies? Take Jackson Palmer's wise words for example. In an interview given on the 26th of April to journalist Karissa Bell, he stated that
“I don't wake up every day and wonder about what my paycheck is. You shouldn't wake up every day and worry about what Bitcoin is in U.S. dollars or what Dogecoin is in U.S. dollars. The key to our success is to build merchant and user redemption. We need to encourage more small businesses and big businesses to start adopting dogecoin as a form of payment. We need to build demand for people that want to pay using dogecoin”.
Of course, such remarks need to be taken lightly seeing as Dogecoin is one of the lesser cryptocurrencies, but the statement remains true in general in regards to the online market. People need to want to pay with their virtual currencies, like Bitcoin for example. As shops open their doors to those who want to spend their precious Bitcoins, lawmakers are waking up to the fact that cryptocurrencies needs to be regulated, and should be limited to a specially adapted legal framework. More people are downloading software allowing them to “mine” Bitcoins, and others are taking their chances and investing in the online currency – who can blame them when the value of Bitcoin, for example, keeps on rising?
Another anecdote that cleverly illustrates the current problems that face authorities is the recent story of a French investor who spent a great deal of time asking the French tax office how he should fiscally declare the profits he made from buying and selling Bitcoins – a question that the tax office seemed eager to avoid. Given the vague answer that was sent to the humble Frenchman (that he should just put the amount of profit on his income revenue tax return), it's only a matter of time before specific laws are put in place that will directly affect cryptocurrencies.
The financial matrix certainly has enough room to welcome cryptocurrencies, and it's obvious that in today's digital era, using virtual currency is the logical step forward. But the true paradox, as noted by Investipedia in an article entitled “The future of cryptocurrency” (September 10, 2013), is that “the more popular [cryptocurrencies] become, the more regulation and government scrutiny they are likely to attract, which erodes the fundamental premise for their existence”. Only one thing is truly certain : the current freedom that cryptocurrencies enjoy won't last for long.