regulation

One way only from fiat to crypto

| roger nunn

When you want to buy crypto (probably bitcoin) you can create an account on any of a number of exchanges and simply transfer fiat currency straight into the crypto of your choice.

This might be more difficult in a jurisdiction with monetary controls but it works easily for me, being based in the European Union.

Once you have the crypto on your exchange account you can trade it for other cryptos or transfer it easily either to another exchange or to a wallet.

It’s seamless, easy, usually cheap and very fast and of course it operates 24/7.

Returning the crypto to fiat feels slow and heavy by comparison, with banks taking some time to make the money available. It really feels like a step backwards in time, like returning to writing cheques for bills and then waiting 3 days for the funds to clear.

I can wait for universal adoption of crypto, easy transfers without the cost and time lost using fiat

The internet begat Bitcoin

| roger nunn

The power of Bitcoin comes from belief in its value which stems from its immunity from inflation, its immunity from government interference, its inherent rarity and its ease of transfer around the world.

When I say Bitcoin I include some other parts of the Blockchain that share its inherent stability whose parts are listed above.

Bitcoin’s transactions are registered and verified by computer calculations, thousands and thousands of them all across the world. There are groups of computers that work together, called mining pools, that have a lot of the required computing power (hash rate) to complete verification. As these mining pools are located in different countries, they are not easily susceptible to being corrupted or controlled.

In recent years some countries have banned Bitcoin and there have been many attempts to regulate its activities. Attempts to monitor the use of Bitcoin are ongoing and are usually accompanied by comments that Bitcoin is used for crime or tax evasion. These can only be excuses, as a lot of crime relies on cash, something that is far less traceable than Bitcoin.

The real power of Bitcoin relies on the internet and the ability to transfer data around the world constantly. There are many cases where access to the internet from within a country is controlled by government. Control of this kind unfortunately stifles trade and certainly has not had a negative effect on Bitcoin.

The internet is constantly evolving with a steadily increasing proportion of the population having access to it. As the development of commerce, international trade and development relies on the internet it is unlikely to disappear soon.

I am especially interested in the effect of Bitcoin on countries with high inflation and the unabnked population, something I will talk about another time.