Why you should care
Because cryptocurrencies aren’t a foolproof investment, but they’re here to stay.
The price has gone up, way up, then down, then up again. But beyond the Bitcoin investment craze lies a deeper truth about how cryptocurrencies are already changing the game in a variety of fields. This OZY series looks into surprising and overlooked aspects of the global crypto boom, which is changing more than just money.
Payday won’t be the same next year for the soccer players of Gibraltar United, a team in the premier division of the sport’s league in the British overseas territory. Only part of their salary will hit their bank accounts; the rest will come to them in the form of cryptocurrencies. But the soccer team is no outlier, and nor is Gibraltar unique — it’s among a growing set of tiny territories betting on cryptocurrencies as economic weapons of the future.
Larger economies have approached cryptocurrencies with waves of regulation. South Korea, the largest market for cryptocurrency trading, has since last September banned initial coin offerings, the crowdfunding initiatives to raise money for new cryptocurrencies. Japan, home to the most cryptocurrency exchanges, is planning to apply laws for traditional stock exchanges to them. Regulators in the United States and India are discouraging trading in cryptocurrencies while they explore legislative frameworks. This is opening up economic space that smaller nations are looking to fill by welcoming investments in cryptocurrencies, launching their own sovereign ones and steering clear of heavy-handed regulations. Success could transform these nations into cryptocurrency tax havens and safe spaces, as well as models for smaller economies of the future.
“Do you want to buy a condom, ma’am? It’s specially designed for women,” Akshay Aggarwal asked passers-by near Bryant Street in Palo Alto, California, in 2015. Frustrated by their lack of success, Aggarwal and his team, the Angels, took a different tack: Sell the condoms to men by saying they’re good for their partners. The next-level pivot by the fellows at an entrepreneurship program run by venture capitalist Tim Draper, an early investor in Skype, Tesla and Twitch, among others, proved successful: The Angels sold 17 condoms in nearly five hours.
Now, Aggarwal, 28, is attempting to sell something else: cryptocurrency. As the Indian government soured on the idea of a decentralized currency, Aggarwal joined a growing internet movement called India Wants Crypto. He brought with him a 15,000-strong community of blockchain enthusiasts who want to participate in saving blockchain’s most popular application.
Several middle schoolers sit on gray upholstered office chairs around white tables, clacking away on their laptops, but with eyes sharply focused on the woman at the head of the room. The children are fascinated as Tavonia Evans teaches them how to use cryptocurrency — and how it can make them rich.
A two-decade tech entrepreneur and mother of eight, Evans, 44, spotted the potential for cryptocurrency early on. “When I first heard about bitcoin, I realized it meant financial freedom and additional sources of funding,” she says. But her plans were bigger than bitcoin — Evans wanted to launch her own cryptocurrency. And in 2017, she did. Ahead of its formal launch, Atlanta-based $GUAP — its name is drawn from urban slang for having a lot of money — has more than 2,500 wallet holders (users) on the platform and runs on its own blockchain. One $GUAP coin is currently listed at $44 and there are just under 9 million coins in existence, out of a maximum total supply of 90 million. By comparison, there are approximately 17.6 million bitcoins in circulation (now priced around $5,000 each) and only 21 million in total that can be mined.
Walk into a Prague subway station and chances are you’ll see an ATM. But you don’t need a debit card or even a bank account to use the machine. This is a cryptocurrency ATM, the physical manifestation of a set of virtual currencies that have leaped out of the underground into the mainstream of global finance. And it’s over these ATMs that the latest race in the cryptosphere is unfolding.
From Detroit to Delhi, and Santiago to Split, cryptocurrency ATMs are popping up around the world, catering to an interest that has been tempered by a crash in bitcoin valuations this year. The first such ATM opened in 2013 at Waves coffee shop in Vancouver, British Columbia. Now, just five years later, more than 3,000 cryptocurrency ATMs populate train stations, factories, delis, hookah bars, tattoo shops, pubs and even pet clinics. These ATMs allow users to withdraw cash or cryptocurrencies like Bitcoin, Litecoin and Ethereum. And crypto kingpins are duking it out for control of the exploding market.
Steve Hanke has spent much of his career passing through the executive palaces of fledgling countries, helping people in power lift their nations from economic collapse. Yugoslavian state media smeared Hanke as a French spy. Indonesia’s military strongman executive assigned him a 24-hour security detail. In Kazakhstan, he zipped down city streets in a limo of the presidential motorcade.
Now, as a collapse unfolds in Venezuela, Hanke, 76, says he’s seen it all before. Just like the 15 other countries he’s consulted in, and six more whose fate he says he predicted from afar, Venezuela suffers from hyperinflation, the ever-tumbling devaluation of its currency.
In a conference room overlooking a busy Atlanta street, Marie-Antoinette Tichler appears regal in a ruffled white shirt, particularly next to her interview subjects — two startup founders clad in the classic tech-apparel combo: a T-shirt and jeans. The self-described “CryptOprah” gets animated when speaking about her favorite subject: the blockchain. And the host of “CryptO Vlog: Behind the Blockchain” on Amazon and Roku’s Cryptocoin Channel has substance along with style. Her straightforward insight makes digital currency seem as unintimidating as online banking.
Just two years ago, Tichler, 47, had never heard of cryptocurrency. But when her 25-year-old son told her about Bitcoin in 2016, “I was hooked!” Tichler exclaims. “I thought, ‘This has a huge ability to change our lives.’” But after some research, she had a striking thought: If cryptocurrency is so protected, what happens to it after you die? And the idea for Tichler’s digital assets management startup, C2Legacy, was born.
In December 2017, an unusual traffic jam brought the Ethereum network that powers ether — one of the largest cryptocurrencies after bitcoin — to a standstill. Daylong delays hit requests that would normally take minutes. But it wasn’t the work of a devious hacker. The network’s pipeline was clogged by digital pets, blockchain-powered cartoon cats called CryptoKitties — and meows like theirs are increasingly echoing across the cryptocurrency world.
Blockchain technology, which is already disrupting technology, transactions and economies, is now throwing up a wave of gamified applications focused on virtual pets that are finding owners and breeders across geographies.