While watching the coverage of the recent Bitcoin rise and fall one thing kept striking me as somewhat lacking in the coverage. Most journalists have been constantly speculating about what Bitcoin can do for them in their cush safe federally insured economies, but what they seem to be missing is what Bitcoin cam do for countries with less than stable currencies.
To be fair, I have seen a couple of reports about what Bitcoin means to the rest of the world recently, but I think they are missing a couple of points. Firstly the media is obsessed with Bitcoin’s worth relative to the Dollar, the Euro, etc…. this is completely irrelevant. Bitcoin as a storehouse of value is great and all, but to frame it as that limits its potential and belies a lack of imagination.
Right now, if we look at Bitcoin, only those in wealthy nations can mine Bitcoin. Either you have to have the means to built a quite expensive GPU based miner, you build an FPGA based miner, or you can purchase an ASIC based miner. All of these things are out of the reach of most in developing nations. What isn’t out of their reach, however is to make a product or service that would have value on the world market. Today, for someone in a developing nation to move a product or service, they have to deal with corrupt exporters, or even if they have honest exporters, their goods can not really find their true value on the world market since they are sold to exporters in their probably over-inflated fiat based currencies.
The better way that Bitcoin makes possible is that these entrepreneurs can stake their price in Bitcoin and deal with distributors, shippers, and marketers with currency that has real value, without respect to what their local economy is doing. This is a more efficient method of rewarding work without the political stigma of a devalued currency attached to it.
In the case that the good is a digital good, such as a book, or music, the musician entrepreneur for example can now produce music, distribute it via bittorrent, and take payment in Bitcoin. They can do this all without any middlemen. This is a beautifully efficient system of value exchange that the world has long needed.