5 Ways cryptocurrencies are changing online behaviour
One thing is for certain. The world, as we know it, is rapidly changing. The global cryptocurrency market has recently exceeded a record high of $700 billion (equivalent to just over £500 billion), a distinct indicator of the increased interest in digital currencies. Blockchain technology behind cryptocurrencies is being successfully adopted across various market sectors, which is changing online behaviour – from the way we shop and invest, to how we play online lotteries.
Here are five ways in which cryptocurrencies are changing the digital world.
1. More online traffic from developing countries
If you ever needed to send money abroad, either to someone else or to yourself, you probably know that it’s not as simple as it might seem. Factors such as exchange rates, service fees and clearing processes on both ends, make international money transfers not only time consuming, but expensive. It’s no wonder that banking is one of the areas in which cryptocurrencies are changing online behaviour.
With the rise of digital currencies such as Bitcoin, international money transfers can be made instantly, cheaply and safely. Bitcoin allows users to send and receive money across borders without the need for a middleman. With intermediaries such as banks and money transfer operators taking an average cut of 7.45 percent of the transaction, it means that a £500 transfer would have a £37.25 service fee, leaving the recipient with only £462.75.
In poor countries where many people depend on money being sent from family members working abroad, a fee like this can make a big difference. Migrants from developing countries send home more than $500 billion (over £358 billion) in remittances per year, more than the amount of foreign direct investments being made. This is where virtual currencies offer a practical solution to those who depend on international money transfers for survival.
Using virtual currencies, users can send money directly to their families via mobile phone. And the only fees to be paid are those charged by the currency exchanges.
2. More online transactions
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Image Alt Text: Phone doing a bitcoin phone transaction sending bitcoins into red wallet
According to the World Bank’s Global Financial Inclusion database, around two billion people in the world do not have bank accounts. This may be because many people don’t have access to formal banking services in developing countries, or people living under an oppressive regime may feel unsafe to reveal their identity to their government.
With cryptocurrencies all you need to create a e-wallet is an Internet connection and an email address. There are several ways to buy Bitcoin without having a bank account, so people without access to banking services can now transact online. Dealing with privacy concerns, cryptocurrencies allow people to transact using a digital identity without having to reveal their actual legal name.
These factors are not only changing online behaviour in terms of online traffic volumes, but online transactions too.
3. More digital investments
Aside from the very popular Bitcoin, there are actually more than 1,300 cryptocurrencies currently available, and the list is growing. As more and more people are valuing decentralised digital cash above traditional investments, there is a shift in the way people invest money.
A recent survey of more than 2,000 people in the US revealed that 30% of investors aged between 18 and 34 would rather own $1,000 worth of Bitcoin than $1,000 of government bonds or stocks. Although the same survey shows just two percent of Americans own or have owned Bitcoin, the investor base is likely to get larger as millennials become the main investment force.
4. More gaming
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Image Alt Text: Hand Holding phone with bitcoin image and chess pieces on the background
At the moment, each online game has its own virtual currency, whether it’s diamonds, credits, or gems. But imagine a world where all online games support virtual currencies that can be reinvested from one game to the next and cashed out at any time. Tapinator, a mobile game developer, has plans to achieve exactly this by developing apps and games with the blockchain system. Their first project is scheduled for the second quarter of 2018.
Such free flow of currency from one gaming platform to another, and the elimination of micro credit card payments and international fees, would not only get more people to play more online games for longer periods of time, but will make it easier for gamers to build gaming careers through easier and cheaper currency exchanges with their global audience and partners.
5. More choice for online lottery players
When it comes to playing the lottery, it’s different strokes for different folks. Players who find their personal computers a convenient platform, prefer playing the lottery online versus offline; while those looking for better privacy try their luck with Bitcoin lotteries.
Bitcoin lotteries are, as the name suggests, lotteries where you play and withdraw your winnings in Bitcoin using your e-wallet. One of the main benefits of Bitcoin lotteries is the stellar protection they offer users who are worried about providing personal and banking information over the Internet. Where a traditional lottery operator will request a scan of your ID at some point, cryptocurrency lotteries don’t ask for any information at all, only the player’s Bitcoin email.
While Bitcoin lotteries may be appealing to players who are looking for new ways to protect themselves from identity theft, they do present a risk in that the Bitcoin currency is extremely volatile and players can’t be sure if it will go up or down.
While it’s still to be seen whether cryptocurrencies like Bitcoin will stabilise, there is no doubt that they are changing online behaviour in many ways, including how online lotteries are played. This begs the question: What will the Internet be like in just a couple of years?