2008 was a year forever etched into the minds of the global economy as the beginning of the financial crisis. It all began on September 15, 2008, with the Lehman Brothers (a global financial services firm and the fourth largest investment bank in the U.S.) filing for bankruptcy. One month prior to this, a patent application was submitted that would revolutionise the banking world; Bitcoin was born. On Jan 1st, 2009, the first version of Bitcoin went live. In 2010, one Bitcoin was worth $0.39. Just eight years after its birth, a single Bitcoin has a value of $4,595.
With over a quarter of a million Bitcoin transactions every day, and 5.6 million people around the world with ‘digital wallets’ used to host cryptocurrencies, how exactly are cryptocurrencies shaping the future of banking for young people today?
THE MATH ERA
The rise of software-based cryptocurrencies shows us how malleable definitions of ‘worth’ and ‘value’ can be. Money is essentially based on a collective agreement. Three distinct divisions of currency are:commodity based (eg. Gold), politically based (eg. Dollar) and math based (eg. Bitcoin). For math-based cryptocurrencies to work, encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
This means that their value is backed by faith that the math works, rather than trusting in a metal’s or government’s value. It is entirely controlled by other users on the Blockchain (an incorruptible digital leger of transactions). No banks, no governments. A currency for the people, by the people, that instantly facilitates transparent transactions. This idea, following the banking crisis, is hugely appealing to young audiences who place value on operating digitally without reliance on an external value:
“For me, the possibility of using something like Bitcoin means that I’m eliminating the need for third parties - it gets rid of fees and random surplus charges.” Dave (24), the Love Network.
Math based digital algorithms mean that effortlessly, more effective and secure payments can be made faster. And as we know, having security and privacy when it comes to transactions and activity on the web is hugely important to young people who want to remain anonymous.
A BITCOIN FOR YOUR THOUGHTS
With the split in Bitcoin this year, now known as the ‘hard fork’, many predicted a fall from favour, but the currency continued to soar - you can even buy citizenship with Bitcoin. With Russia saying they will now ban sites that sell Bitcoin, the demand for Bitcoin has never been so high.
Accessibility and intrigue for cryptocurrencies is growing for the mass youth audience (and getting your hands on them is an adventure in itself!). Forward thinking college kids are experimenting in investing their allowance in cryptocurrencies and BitKidz got in the cryptocurrency game with a Bitcoin for Kids books series; when purchased on Amazon, BitKidz buyers using the cryptocurrency get reductions in price.
How do you get some? With Bitcoin, you can either go online to a Bitcoin retailer and buy their Bitcoins, which are usually sold at above cost price. Or you can mine for Bitcoins (if you have an extremely powerful computer). Mining for Bitcoin is a process that involves compiling recent bitcoin transactions into a block and trying to solve a computationally difficult puzzle / equation. The first person to solve this gets to place the next block on the chain and claim the reward (Bitcoin!).