The most exciting innovations in digital currencies will come from developing countries, where financial infrastructure is not as strong, says MIT Media Lab director of digital currency, Brian Forde.
Speaking at WIRED Money 2015, Forde explained that the mainstream British and American public cannot quite grasp the gravity of the economic revolution we have at our fingertips, because in these countries an ATM is always a few hundred metres away and everyone accepts credit cards. In many places across the globe, though, the status quo is not quite so straightforward. "Today, in 2015, I still can't use Paypal to send money to friends in Nicaragua," says Forde, former senior adviser for mobile and data innovation at the White House. "But I can send them Bitcoin instantly."
In Ukraine, during the three-month protest in Kiev's Independence Square in 2013-2014, activists managed to fund their activities by plastering QR codes on their signs, which led supporters of the cause to a Bitcoin address. 'They instantly had Bitcoin in their wallet they could use," says Forde. He tells the story of a recent interlude with someone who works in social welfare for government, where he discovered the convoluted process of how they distribute physical cash. "25 percent of the population that receives this cash doesn't live near an ATM. Sometimes they have to put it in a canoe, and the insurance company that delivers the money will only allow a certain amount in each canoe. They spend more money on the delivery of cash than the cash that's delivered."
AT MIT, Forde and his colleagues work to support the cryptocurrency community and bring it to the mainstream through research into the platform's "security stability and scalability", and the incubation of emerging technology applications. It's by looking at those gaps in the market where Bitcoin and alike can make a real social impact, that he hopes to make a difference.
He gives the example of an age-old economic standard: authentication. "For more than 5,000 years civilisations around the world have been using stamps -- some made of wood, stone, rubber -- to authenticate that something is approved by government, or signed by a company. In Mexico they have to sign their name and have their company stamp a form to authorise it before they can open a bank account."
Now, we can use the blockchain to digitally authenticate things, and move away from the arbitrary practice of stamping and similar tools. Enter the "rubber stamp authentication protocol". Like the stmp protocol for email, which allows all kinds of email to be sent, digital currencies will allow anything to be authenticated, anywhere in the world.
One of the use cases the MIT team gets excited about, says Forde, is how cryptocurrencies can disrupt ownership. "Capitalism took off in countries like the US where most small business owners borrowed against the equity of their home. Where people don't have a formal property title, like in Egypt, all this capital is tied up. If you have a property title go on the blockchain, even if there is a change of government that no longer respects the title, it's on the blockchain: the government can't just go and say you never owned the property."
It's thanks the blockchain, a kind of public ledger of bitcoin debits and credits, that anything and any transaction can be authenticated and prove ownership has transferred. "And you can scale that from a penny, to your house." "It will be interesting in the future, if this open protocol disrupts the disrupters." Marketplaces can be everywhere, for instance -- we won't have to rely on the incumbents like Amazon. And even identity theft could become a thing of the past.
Forde is working on exploring all these potential avenues with some of the top professors in the world, including the former chief economist of the International Monetary Fund -- "not just people excited about Bitcoin". "We need more people, we need more diversity, if this is truly going to have the impact we want."
But it is the unexpected places, where Forde believes the greatest ideas set to impact the proliferation of digital currencies around the globe will come from. "A few months ago I was in Iraq and carried out a quick, impromptu workshop on Bitcoin. 30 people showed up to learn about it, not with strong technical backgrounds. They instantly downloaded wallets, and started sending money back and forth. They instantly came up with ideas I couldn't have imagined. "It is not from the US or UK where the greatest innovations will come from. But developing countries."
This article was originally published by WIRED UK
