The Biggest Challenge for Cryptocurrency
The biggest challenge for cryptocurrency is convincing people in developed regions like North America and Europe to use it.
To explain, cryptocurrency is an easy sale in emerging nations with lousy currencies. To demonstrate, altcoin promoters have an easy time getting Colombians and Venezuelans to use their products.
For instance, several hundred Venezuelan merchants eagerly signed up for Dash’s (DASH) payment platform. Moreover, Manticora Capital and Pundi X are trying to install 1,000 Pundi XPOS POS (Point of Sale) payment terminals across Colombia.
Why Cryptocurrency will Take Latin America by Storm
To clarify those terminals accept direct payment in several cryptocurrencies. Pundi hopes to make money and drive customers to its blockchain platform by taking payments in its Pundi X (NPXS) ERC20 Token.
Dash (DASH) is easy to market in Venezuela because that nation is suffering from the greatest hyperinflation in recent history. Incredibly, Venezuela inflation was approaching one million percent in July 2018, The Guardian reports.
Notably, even the nation’s socialist President Nicholas Maduro is now a cryptocurrency geek. Maduro is promoting several resource-backed cryptocurrencies as alternatives to his country’s fiat currency the Bolivar.
Furthermore, the Colombian Peso is a very weak currency worth a fraction of the US dollar. For example, a Colombian Peso was trading at $0.00032 USD on 22 October 2018.
History teaches that people with no access to a stable or effective fiat currency will quickly embrace alternatives. For instance, they make transactions in the street on Venezuela in gold and US dollars. The problem with gold and US dollars is that they are hard for average Venezuelans to get.
The Greatest Challenge for Cryptocurrency is not Gold or Paper Money
The main source of US dollars in Venezuela is corrupt officials or politicians who trade Bolivars for them at artificial official rates.
Moreover, both gold and dollars can be confiscated by any thug with a gun. Even if an average Venezuelan had dollars he or she would probably quickly lose them to the local gangster or a crooked cop.
A greater dilemma is that the Venezuelan’s cousin in Miami has limited means of sending her dollars. The cousin could wire them, provided the government allows wire services to operate. To explain, many governments implement currency controls to keep average people from sending funds outside the country.
Additionally, a wire transfer costs $45 to $50 at a bank, or less at a service like Western Union or MoneyGram. To make matters worse, those services pay out in cash.
Notably, the cash will probably be Bolivars which quickly lose value. A greater dilemma is that thugs know people leaving the wire transfer office have cash. Therefore, they will wait outside with their guns.
The Greatest Challenge for Cryptocurrency in North America
The greatest challenge for cryptocurrency in the United States and Canada is that money in those countries is historically very sound.
For example, the United States dollar or greenback kept its value even through the Civil War, the Great Depression, and the Great Market Meltdown of 2008. Canadians’ greatest complaint about their dollar is low buying power when they go on shopping trips in Michigan.
Notably, the last hyperinflation in the United States was over 150 years ago during the Civil War. The Confederacy suffered terrible hyperinflation because it tried finance the war with the printing press.
Hyperinflation was a major cause of Confederate defeat. To explain, Confederate soldiers; sick and tired of being paid in worthless paper, simply quit and went home. By 1865 even the South’s top generals; Robert E. Lee and Joseph E. Johnston, surrendered without permission from Confederate President Jefferson Davis.
The challenge for cryptocurrency promoters in United States is that the country’s last hyperinflation occurred before the great-great grandparents of the average American were born. For instance, there is not even a strong folk memory of the Confederate hyperinflation in modern America.
The Greatest Challenge to Cryptocurrency in America
Americans and Canadians trust their paper money because they never had a reason not to. That will be a challenge to anybody promoting an alternative.
Lack of fear of hyperinflation also explains why the Federal Reserve System; America’s central bank, has displayed little interest in cryptocurrency. The Fed does not view cryptocurrency as a threat and ignores the technology.
On the hand, cryptocurrency scares the People’s Bank of China (PBOC) and the Reserve Bank of India to death. The PBOC is researching cryptocurrency extensively and banning most altcoin transactions, for example. In addition, the Reserve Bank has blocked bank account access to cryptocurrency exchanges.
The Greatest Cryptocurrency Opportunities in North America
Therefore, the greatest opportunities for cryptocurrency in North America are central bank issued crypto coins, and altcoins linked directly to fiat currencies.
Not surprisingly, American companies are behind stablecoins (fiat-backed altcoins) like Tether (USDT) and the Dai (DAI). Individuals could use stablecoins as a savings or as a hedge against inflation. An obvious use for stablecoins is transmitting money to and from other countries.
Other opportunities include protocols that quickly convert cryptocurrency into fiat currency. Notably, the most promising of these is Uphold.
To explain, Uphold is an application programming interface (API) that enables fast conversion of currencies. Uphold currently converts major cryptocurrencies like the Swiss Franc and the US Dollar.
The Greatest Challenge for Cryptocurrency in Europe
Europe could be an even harder market for cryptocurrencies to crack because of the Euro.
To explain the Euro is a successful multinational currency that has wiped out most of the weaker currencies in Europe. Therefore, the opportunities for cryptocurrencies in Europe will come in countries like Denmark and Poland that are resisting the Euro.
Interestingly, the Euro shows how cryptocurrency will change economic crises. During the 2008, meltdown economies in countries like Greece and Italy kept functioning despite government crises. The economies functioned because good money was still readily available in the form of the Euro.
There was still a great deal of economic pain because the government in Greece ran out of money. Portions of the Greek economy like the tourism industry and exporters still functioned because they could use Euros. Many businesses still functioned as the banking system froze.
Therefore, financial crises in nations with cryptocurrency access will be like Greece. Those businesses and individuals that can access cryptocurrency will function. Everything else will shut down.
Obviously, the greatest cryptocurrency opportunity in Europe will be Euro-linked stablecoins. Notably, such coins hold the potential to wipe out lesser European currencies like the Danish Krone and Polish Zlotny.
How Euro Stablecoins will Destroy European Currencies
To demonstrate, all it will take is a little inflation to drive most Poles or Danes to use the Euro-stablecoin. Meanwhile, the national currency collapses and most people refuse to accept it. Eventually, the government will force citizens to adopt the Euro.
An obvious consequence of that situation will be riots or mass demonstrations; if average people receive welfare, basic income, or pensions in worthless fiat currency. Violence will result if merchants refuse to accept poor people’s welfare payments.
A likely outcome of that scenario will be the government switching over to the Euro to defuse the crisis. Under those circumstances, no government will justify the expense of maintaining a fiat currency.
Therefore, the nationalists who expect the Euro to die will be sadly mistaken. The Euro is likely to emerge from the next round of financial crises stronger and more widely used than ever. Therefore, a Euro stablecoin could be a great investment.
How Cryptocurrency and Stablecoins will Wreak Havoc and create vast fortunes
Speculators need to pay close attention to the greatest challenge for cryptocurrency and the opportunities presented by stablecoins. Cryptocurrency will wreak havoc despite challenges.
That havoc will create vast opportunities for shrewd investors to profit. Hence, vast fortunes will result from the coming currency chaos cryptocurrency will create.
Even with that havoc, cryptocurrency will be a tough sell to North Americans and Europeans. I predict that it will take decades to get Americans, Canadians, and most Europeans to accept nongovernment cryptocurrencies.
