There are a lot of abstract problems related to money for which bitcoin is supposedly the saviour.
It is supposed to free us from central banks, and regular banks, and onerous centralised authority. So far, however, this hasn’t worked out so well as regulators continue to crack down on those trying to use bitcoin to work around the current legal and regulatory frameworks.
But there’s still (at least) one way the bitcoin technology could be revolutionary: transferring money from place to place instantaneously.
Take this passage from Nathaniel Popper’s new book, Digital Gold, which was released Tuesday:
Wences [Casares, an entrepreneur from Argentina] drew the group in with an explanation of the basic notion of a new kind of network that could allow people to move money anywhere in the world, instantaneously — something that these financiers, who were frequently moving millions between banks in different countries, could surely appreciate.
“You can call someone in Jakarta on Skype,” Wences told them. “you can see them and you can hear them and there’s a synchronous connection with a lot of bandwidth. There’s a ton of magic happening, which is incredible. And you hang up and you want to send them one cent and that’s not possible. That’s ridiculous. It should be a lot easier to send a cent than to see video and audio.”
Casares is right: it’s really hard to move money around the world. Even within countries, the US in particular, it takes multiple days for money transmission to clear. Services like Venmo and PayPal make it easier by allowing you to move money from account to account instantly, but it still takes a day or two to get your money from that service into your bank account. Internationally, it’s even harder and much more expensive.
If the current money transfer system is like receiving mail in your mailbox once a day, bitcoin is like instant message. It’s instant and cheap. (In this analogy, Venmo would be like an alert that lets you know you have a new email, but doesn’t let you respond until the end of the day.)
So bitcoin is theoretically an almost perfect solution. Practically, though, the problem still is that nobody uses it.