Digital currencies are the “next natural step” for the global economy, academics from Imperial College London have claimed in a new report that suggests people could be paying for their weekly shop in Bitcoin within a decade.
The study, commissioned by cryptocurrency exchange eToro, presents research from Professor William Knottenbelt and Dr Zeynup Gurguc, who claims that digital coins like Bitcoin or Ethereum have already passed one (1) of the three fundamental tests to become a bona fide currency: acting as a store of value.They suggest it is possible that digital coins like Bitcoin could soon fulfil the two remaining roles necessary to become a legitimate currency: (2) becoming a medium of exchange by making it easy for people to exchange goods and services and (3) proving it can be used as a unit of account, acting as a measure of value in the economic system.
The trajectory towards widespread adoption of digital currency is becoming undeniable with countries like Malta and Switzerland introducing digital-currency-friendly laws. Here in Canada, companies like Mogo Financial are integrating Bitcoin into their digital wallets alongside traditional chequing and savings accounts.
Another sign of mass adoption? The Bitcoin ATMs popping up everywhere. Interestingly, they are appearing in inner city neighbourhoods in the US – places that are typically underserved by banks and overserved by payday loan companies. For residents of these areas, the low fee structure is a welcome reprieve from predatory lenders.
As with all new technologies, the demands of consumers will soon force more and more merchants to accept digital currencies as a form of payment. Of course, governments and the big banks don’t want this. Afterall, Bitcoin was invented after the market crash of 2008 when trust in banks was at an all time low. The purpose was to create a currency that existed out of the hands of a central authority.
Bitcoin has come a long way over the past ten years in terms of awareness. Most people know what Bitcoin is even if they don’t know how or why it works. But adoption takes time. The first transaction (that we know of) where a coin was exchanged for goods occurred China in 1100 BC. That system didn’t change for the most part until the first charge card was invented in 1946, 3000 years later.
That said, the pace of technology is moving faster than ever and with mainstream companies like Coinbase in the game (the company has filed for SEC licenses to be the custodian for major Wall Street investment firm’s digital currencies), it is only a matter of time before the obscure becomes the norm.