A Crypto Future for Good

Crypto-Currency

Recently the BBC featured this article about a new bit-coin derived service that rewards walkers with a virtual currency for each 5 miles they walk. Bit-coins are not new, but this is the first genuine attempt to connect crypto-currency to a genuine real world cause. With obesity on the rise and the follow-on problems with diabetes, this kind of initiative is welcome.

My own personal interest in crypto-currency (CC) goes back a couple of years. I've managed to mine a few bit-coins, have delved into the block-chain to see how they are created, watched the valuation of each coin fluctuate wildly and completely failed to find anything that I really wanted that I could use the bit-coins for. 

I have throughout all this been telling anyone who would listen that CC's as a concept have the potential to change everything. Particularly for people with little or no specific skills base or those people that work in sectors that are historically low paid (healthcare etc.) 

Imagine scenarios where putting rubbish in a bin creates revenue? A Nike Fuelband style device on your wrist communicates with a recycle bin to reward you for depositing rubbish. Now suppose that multiple deposits in a time-frame amplifies the reward. As soon as rubbish has a value you'll never see litter in the street again, or anywhere else for that matter - I've said that for years.

There are a lot of social and societal issues that could be tackled in the same way - with CC's rewarding low/no skilled input into society, providing a revenue opportunity for the person and lessoning the welfare/local authority bill in the process. 

So what's the problem?

There are a few issues with CC's at the moment. 

- Stability
The current CC's suffer from a stabilising influence like the Bank of England does for Sterling. Our money is protected from volatile movements by the Bank of England's moderation of the market. Bit-coins have never had this and therefore are subject to wild swings in value.

- Security
CC's need to be deposited into a virtual wallet system. I've never seen my bit-coins, they don't exist physically, I know they exist because I can see them in my bit-coin wallet. The wallet system is not 100% flawless and its still possible for wallets to be hacked or stolen completely. They also rely on passwords and if you lose or forget your password there is no system to recover it, its lost for good.

- Market
At the moment most of the mainstream business environment doesn't want to deal with CC's, mainly for the two reasons above but also because they don't have the skills and tools internally to deal with CC transactions. Its changing slowly and some of the banks are heavily investing in the people and tech they need to manage CC's. However, its still not possible to pay your phone bill with a CC transaction - which is a major limitation.

- Trust
For anyone wanting to get involved with CC's there are still trust issues for something that you can't hold in your hand. Users need to know that they are going to receive what they have earned, when they earned it and that they can spend it the way they want to. There still needs to be some formality developed for CC users - CC generators need to be regulated and managed (maybe by the FSA?)so there is some faith with the users that they are involved with something that's going to function correctly.

Summary

I'm an advocate for the future of CC's. I don't think that bit-coins are the solution, but something based off the block-chain principle will emerge that starts the revolution. If you're interested in CC's and want to read more, here are a selection of links outlining both the argument against as well as for CC's.

Wall Street Journal
Nature.com
UK FinTech
Investopedia
City AM