Nowadays, and especially after the pandemic period, it seems that we can do practically anything from our phones or computers. From buying clothes, tennis, paying taxes and viewing all kinds of content, the facilities of technology have put the world almost at our fingertips and a click away.
However, Alejandro Beltrán, country manager in Colombia for Buda.com, a cryptocurrency market, wonders why we can't do the same with money. The executive explained during his conference at the Colombia 4.0 event that although services such as Nequi have become popular, there is still some work to be done, and the key may lie in technologies such as bitcoin.
like instant messaging
Since its inception, one of the banners of the Internet has been to be able to connect people and services. The use of email, for example, changed the way people communicate. Over time, this has also evolved into instant messaging systems, which today are characterized by being highly secure and integrating encryption systems to protect data and user privacy.
According to Beltrán, a reality throughout the history of the Internet is that humans will always seek to connect through the Internet. However, despite this search, a reality that is a bit difficult to swallow is that today there is no safe, fast and convenient way to connect on financial matters.
“We have this whole world that has already evolved into a more modern civilization, but today the system does not allow us to have money from the Internet that can be transmitted more easily, like an email.”
Alejandro Beltrán, country manager in Colombia at Buda.com
Although there are systems such as Nequi and Daviplata, the truth is that these types of applications only work within a single country. The security and sovereignty of each country, says Beltrán, have affected the monetary system and do not allow the creation of a truly global system for the transmission of currencies through the Internet.
In a certain way, the concentration of power in entities such as national banks has meant a significant brake on innovation in which systems such as Swift continue to be the highest authority.
Satoshi's proposal
In 2008, Satoshi Nakamoto – an alias that has not been identified so far – published a document in which he explained a decentralized exchange monetary system powered mainly by the users of the platform themselves. The decentralization of the platform allowed, among many other things, that the transfer of value can be done without depending on external systems or entities.
According to Beltrán, Satoshi imposed 3 pillars that still function as the foundations on which bitcoin is based. In the first place, this technology responds to a pattern of social exchange, that is, it is a system that works as an exchange of values between different elements. This part is not unique to bitcoin, but is present in all currencies in the world.
Second, however, we find that bitcoin must necessarily be divisible and fractionable. This is shared with other currencies, but the advantage of bitcoin is in the ability it has to reduce itself to its minimum expression and reach tiny values. in bitcoin, the smallest unit is 1 satoshi, named precisely in honor of Nakamoto and which at the time of this writing is equivalent to about 1.200 Colombian pesos.
Finally, bitcoin complies with the principle of being a store of value. Beltrán explains that, as in the past, national banks used to have money as a representation of gold and bitcoin also seeks to have this value capacity. However, since bitcoin is simply an expression of bits, it has more flexibility.. "Unlike gold, bitcoin has much easier divisible," Explain.
always the privacy
Although not mentioned by Satoshi, Beltrán points out that one of the biggest problems to solve is that of online privacy and identity. In a digital world, virtually anything can be replicated simply by 'copying and pasting,' he says. This concern, obviously, is even greater when we talk about online transactions, in which there is money involved.
“E-mail is part of our life, it is everything that we build”, comment This privacy problem has several edges, however, it is key to be able to find a balance between security and privacy. In the case of bitcoin, all transactions are public, but important details are hidden that prevent – at least in principle – third-party monitoring of these transactions.
The application of blockchain has undoubtedly been one of the greatest revolutions that was born with bitcoin, since it guarantees not only the decentralization of information, but also the security and privacy of those who participate. Beltrán explains that blockchain security is based to a greater extent on creating a hash cryptographic that protects identity and prevents fraud.
Not everything is rosy
Even with these measures that bitcoin implements, today there is a reality that largely works as an obstacle to mass adoption: speed. In his conference, Beltrán emphasizes that, for example, with a credit card it is a process that takes seconds and that it is accepted internationally.
Bitcoin, however, due to its security, can sometimes take minutes or hours for the system to verify a transaction as valid. On a day-to-day basis, in which every minute counts, it would be very cumbersome to have to wait for this type of validation before being able to receive the products we want to buy.. "In 2018 we had the ability to buy a coffee and maybe a jacket, but we didn't have the ease of trade," Explain.
As a comparison, Visa processes around 24.000 transactions per second, while bitcoin processes only 7. In order to reach a truly massive adoption, it is important to develop systems that allow more processing without sacrificing any of the benefits that blockchain provides.
Systems like Lightning, a new reservation system that allows payments to be made much more quickly, provide the functionality and universality of credit cards but without the need to first go through decentralized financial systems. Beyond being a payment system, Beltrán understands bitcoin as a tool to include more people in the technological financial system so that they can, perhaps for the first time, enjoy digital advantages in their daily lives.
Main Image: aleksi raisa (Unsplash)