Unless you’ve been living in a pineapple under the sea for the past 6 months, I’m sure you’ve heard at least one of the following terms; Bitcoin, Blockchain or Cryptocurrencies. These are the new buzzwords in the tech industry and the main topics around watercoolers in accounting offices.
But what exactly is Bitcoin? And why should travellers concern themselves with the watercooler talk of accountants?
What is Bitcoin?
Well, to put it simply: Bitcoin is the next big step in the evolution of how we pay for goods and services. I know that sounds a little vague, so here are a few simple definitions.
- Bitcoin: Bitcoin is a digital currency, plain and simple. What makes it unique, is the fact that it isn’t controlled by anyone in particular. There is no government or any single entity that determines the value, the amount or the availability of Bitcoins. The currency is controlled by open source cryptographic code. The code determines how transactions are processed and the nature of Bitcoin itself.
- Blockchain: A blockchain is basically an open ledger that records every transaction done in Bitcoin or any other cryptocurrency for that matter. Once a transaction has been recorded to the blockchain it is nigh impossible to remove or amend it. The blockchain is what enables cryptocurrencies, like Bitcoin, to be decentralised and secure.
- Cryptocurrencies: Any digital currency that uses a decentralised blockchain to record transactions. Also referred to as cryptos.
The above definitions are elementary at best and there is a lot more to these technologies. If you want to know more, go check out this video from SciShow. The video provides an in-depth look at cryptocurrencies in terms that are both easily comprehensible and relatable.
Why Should Travellers Care About Cryptocurrencies?
That, my fellow traveller, is the right question!
Cryptocurrencies aren’t subject to any government authorities, which means that they are essentially international. A Bitcoin in Australia is the same as a Bitcoin in South Africa and you can exchange them freely without having to convert between currencies. This ability opens up a whole new era of trade and allows people to trade internationally without the assistance of governments or banks.
Without banks? Yes, without banks! With cryptocurrencies, you have the ability to be in absolute control of your money. There is no entity that can prohibit you from sending or receiving funds.
You’ll also find that there aren’t any bank fees, although, you still have to pay a small fee for sending money. This fee is known as a mining fee. These fees can change depending on the number of transactions per second. As some of you may know there was some controversy surrounding Bitcoin’s extraordinary high fees a while back. Fortunately, it has come back down since and I’m proud to say that the fee on my last Bitcoin transaction was a staggering 0.021%.
All of the above boils down to you having money that is just as free as you are. Without banks or government restricting your flow of currency or forcing you to pay laughable fees, you can spend your hard earned money the way you want to.
How Can travellers and Expats Use Cryptos to Their Advantage?
There are hundreds of possible applications for cryptocurrencies, but here are a few that I’ve found to be useful for travellers and expats.
- Sending money from one country to another. This is especially useful if you’re taking a gap year abroad or if you’re a full-time expat wanting to send money home.
- Cryptocurrency debit cards, like the Monaco Card. These are ideal for travellers, allowing them to spend crypto instead of fiat currency. These cards enable users to avoid the outlandish fees incurred when converting currencies.
- Trading and investing. Very risky, but if you know what you’re doing the rewards can be enormous. If you want to learn more about trading cryptocurrencies, go subscribe to Real-Crypto’s YouTube channel. He does a great job at explaining technical analysis and is one of the more moderate voices in crypto-trading.
So, cryptocurrencies enable you to sidestep the red tape and fees imposed by both governments and banks and puts you in charge of your money. Sounds great, doesn’t it? Well, cryptocurrencies are still in infancy and there exists a multitude of issues that still need to be resolved before cryptocurrencies can take over the world. In the meantime, using them to our advantage is a risky but worthwhile lifehack.