Early adopters of blockchain tech have been discovering a new age of personal finance and financial security. As cryptocurrencies become more common, we’ll see even more people moving over to blockchain-based financial applications. Some of these apps have the potential to completely revolutionize how we even think about money. From savings and investments accounts to loans and day to day currencies, personal finance will never be the same.
Legacy financial companies like JP Morgan and tech giants are now entrenched in blockchain tech, as we’ve seen with the development of the JPM Coin and the IBM blockchain system for enterprises. But that’s not what we’re talking about today. Instead, we want to look at the other end of banking and personal finance. What it’s like to be on the consumer side of crypto. This article is about how people in general are affected by the crypto way of money, and how it relates to their day-to-day finances and investment outlook.
The benefits of blockchain tech in relation to personal finance are becoming clearer every day. At the same time, some of these benefits completely upend our basic understandings of money. Let’s take a look at some of these benefits before delving into several up and coming personal finance projects emerging throughout the crypto world.
You can have your own currency
Thanks to blockchain tech, people can fairly easily create their own currency. While it may not be the next bitcoin and it may not ever have much value, it’s still doable by most people, and from any location in the world. There are multiple platforms, such as like Ethereum and WAVES, where you can build your own token on top of their blockchain.
Obviously, there’s a lot to making sure your cryptocurrency has liquidity, security, a good use case, and dedicated developers supporting your project. But the mere availability of currency creation platforms is a broad step in disrupting how we view personal finance.
Anyone can trade cryptocurrencies
This might seem obvious. Maybe you’ve been knee deep into crypto for years. But think about it. If someone told you a decade ago that you’d be trading cryptocurrencies on exchanges today, would you believe them? Many cryptocurrency enthusiasts have never traded a stock in their life. Yet, we now have multitudes of eager new traders trying their hand at trading crypto. The leap we’ve made as a society because of blockchain tech is monumental. We’ve gone from a select few being able to trade stocks, to this cryptographic system that is open to all.
Anyone can trade cryptocurrencies, all night long
All day long, 24/7. Blockchains run on their automatically according to complex algorithms. They are not dependent on legacy finance platforms, 3rd party payment providers, or centralized servers. They don’t care about timezones or holidays. Crypto markets are open all the time on a global basis, thus adding to their accessibility.
Cryptocurrencies are a new asset class
So you have a completely new and different investment vehicle. One like never before. With this new asset, comes creative new ways to invest, such as with crypto dividends, masternode staking, smart contract-powered crypto lending, and a host of other technological breakthroughs.
Financial privacy is actually a thing
Many of us working with traditional financial services have all but given up on financial privacy. The data that banks and financial institutions have on us is not ours. It’s legally theirs. And they use it regularly in the name of providing us better services. This can mean allowing their partners to contact us to offer life insurance, or having a Facebook ad about a home equity loan pop up after applying for a mortgage in a bank, and so on. With blockchain tech, and most notably privacy coins, we’re able to take back control over our private financial data.
Blockchains like bitcoin enable you to transact with someone across the globe, device to device, with no 3rd party intervention. Without 3rd parties storing (and using/selling) your financial data, it is instead publicly located on the blockchain – but with no personally identifying information, only transaction amounts and dates. Some privacy protocols like Monero allow for all data to be shielded for complete privacy.
What are the choices of currency we have for everyday life today?
Let’s say you’re in the grocery store. You’ve reached the checkout line and you have the following payment options:
- Your country’s currency (cash)
- A debit or credit card representing your country’s currency
That’s really one choice. What we’re seeing with advancements in blockchain tech is a multi currency culture. While more and more merchants are accepting bitcoin as payment, they’re also allowing for payments in other cryptocurrencies, such as LTC, ETH and others. CoinMarketCap lists nearly 10,000 cryptocurrencies at the moment (updated April 2020).
We are moving towards a system of choices in currencies, which is the complete opposite of the central bank-regulated currency system we’re all used to. Additionally, atomic swap technologies are developing ways to send crypto payments between coins and between blockchains, further opening us up to currency choices.
Finally, we can choose between inflationary currencies, like the USD, and cryptocurrencies that are inherently deflationary, such as bitcoin. With blockchain technology, it appears we are moving into a system of money in which markets will decide what currency is valuable, or not.
How we store our money
Up until crypto, we mostly have been storing our money on digital ledgers that rested on bank servers. So when spending or earning money, we’ve engaged with the banking system, and all of its accompanying 3rd parties (i.e. Visa, Swift, etc.). If the bank’s server is down at anytime, we cannot access our money. Now, thanks to blockchain tech, we can store our own cryptocurrency safely offline in cold storage.
We’ve covered some of the many ways blockchain tech is transforming personal finance. This section could literally go on endlessly in the face of rapid innovations in the crypto space. But now, it’s time to check out some of crypto’s hottest projects in personal finance. We’ll see how their creations are improving and changing how we look at and engage with money today.
Blockchain Tech Projects Changing Personal Finance
Nexo.io is a blockchain tech project that allows participants to lend their idle crypto and earn daily interest. Additionally, users can borrow instantly in over 45 currencies, without submitting to a credit score. You can even have a line of credit backed by the crypto held in an insured Nexo account.
Bloom offers a way for people to create their own secure, reusable and verifiable digital identity. Users have choices over what data is exposed and when, and all of it is cryptographically secured. Bloom allows both traditional and digital currency lenders to serve billions of people who currently cannot obtain a bank account or credit score.
With ways to transparently build up a credit reputation, Bloom gives people a whole new way of credit scoring. Up until blockchain tech projects like this one, the credit scoring process has been notoriously shrouded in uncertainty on the user end.
New ways to earn money
HedgeTrade is a tokenized application for making trade predictions. By tokenized we mean the HEDG token is the application’s form of money, used to earn from expert trading advice, or buy it. This social trading platform enables top traders to share their insights with newer traders. They can earn tokens by selling smart contract powered prediction “Blueprints” and staking varying amounts of crypto on their predictions.
For newcomers wanting to learn trading, this social trading-inspired platform allows them to trade like the pros. If a prediction is wrong, they get their money back from the Blueprint purchase. This accountability-based system rewards truthfulness and skill while helping all traders become better at what they do. All of the data on trades and predictions is secured on a blockchain and then used to build reputation scores for the traders publishing Blueprints.
OpenBazaar is a decentralized version of Amazon. Essentially, it’s a free, online marketplace, so no platform fees or restrictions. Amazon currently takes a percentage from all its sellers and self publishers for each transaction. Platform economies, such as Uber and Amazon, do allow people to create businesses, but often at a steep cost. Moreover, the platform has the right to delete your account for breaking rules that can change.
Now, online entrepreneurs who are part of our modern gig economy can open a shop and enjoy a peer to peer platform with no 3rd parties getting a cut, and no censorship. Anyone can open up a store and sell pretty much anything, all while earning in crypto.
StakeNet provides a platform for those wanting to earn some passive crypto income. People can do so by staking a predetermined amount of crypto in order to run a masternode. This is tech-intensive, but it also gives users a way to help with the success of the blockchain network. Stakenet is also creating an easier way for users to run a masternode without having to maintain a dedicated server on their own.
Savings and Investments
Brickblock increases opportunities for real estate investing in several ways. First, they do so by using blockchain tech and smart contracts to make transactions faster and cheaper. Secondly, they enable real estate assets to be tokenized, thus widening the scope of real estate opportunities on a global scale and introducing enhanced liquidity for real estate assets.
BlockFi now offers its “Blockfi Interest Account” or BIA. In this account, participants can earn interest payments on the crypto held in the wallet. Additionally, they offer a crypto-backed loan, which enables users to access liquidity without selling their crypto. Instead, the coin acts as collateral so users have access to up to 50% of the held assets in USD.
Wills and Estate Planning
Heir.io has a full suite of crypto-geared estate planning services. Unlike legacy systems, Heir’s services are widely available worldwide, regardless of your income or region. By using smart contracts and blockchain tech, they offer a new way to preserve assets, while ensuring that wishes are automatically fulfilled.
Is Blockchain a Revolution?
The standard revolution definition is as follows: “A forcible overthrow of a government or social order in favor of a new system.”
Blockchain tech cannot really be considered forcible – it’s more a benevolent catalyst for change, as well as a physical solution. People will still be required to use the technology for it to be ‘revolutionary’. But the tech also provides the impetus for a new system of money – something that will alter every aspect of society.
Hopefully, you’ve found this discussion to be a breath of fresh air. Blockchain tech has certainly opened us up to creative new projects that are compelling us to reconsider how we view money.