Is virtual currency unstoppable?
Is a cashless society really going to happen? After all, we were promised a paperless society long ago but, let’s be honest, we’re not there yet.
Do we even want a cashless society? To answer that question properly, let’s start by looking at how digital currency works.
Digital currencies such as Bitcoin, the most famous example so far, and ether, one of the rising stars in the field, are built on ‘blockchain’ technology. In short, a blockchain is a distributed database of computers that together maintain records and manage transactions. This network approves ‘blocks’, or transactions, which are then added to the ‘chain’ of computer code.
Describing blockchains so quickly makes everything sound wonderfully simple but, of course, the underlying technology can be very complicated. All we need to know right now, though, is that blockchains effectively create a digital data ledger in the cloud, recording debits and credits.
OK, so we understand how digital money works but why should we care? What makes virtual currency so great?
Firstly, physical currency transactions are increasingly out of place in modern life. By 2020, many people will be leaving traditional wallets and purses at home and using mobile payment systems for almost everything they buy. Teenagers find the idea of making payments by paper cheque unbelievably slow and difficult. Why continue struggling to integrate traditional currency into the digital financial world? Why not just start a faster and more efficient system using digital money?
Virtual currencies remove so much of the bureaucracy people hate in traditional financial services. Blockchain technology is not managed by a central authority such as a bank. People effectively pay each other directly. Records are unchangeable, helping to minimise disputes between parties. Cryptography keeps transactions secure.
With no need to wait for the processes of banks and clearing and settlement systems, speed is one of the great benefits of blockchain transactions. And at PayNode we know how much speed matters. Brokers and operators love how quickly PayNode works. Unlike traditional payment processes in business aviation, when you use PayNode, the funds can be disbursed to your bank account the day after the flight, not days or weeks later.
There may be lots of benefits but surely virtual currencies aren’t perfect? It’s true Bitcoin has received negative media coverage, often because some high-profile early adopters were using the currency for disreputable purposes. And many people report the ‘quick’ transactions can actually take hours to be confirmed. If you’re trying to buy a coffee, you’ll get a very cold drink by the time you’ve paid. If you had paid with a credit card, you would have left the shop with a hot drink long before.
There’s clearly a lot of work to be done before virtual currencies enter mainstream business life. Nonetheless, enthusiasts believe blockchain technology could be as revolutionary as e-mail. The impact of blockchain technology could extend beyond fintech into industries including entertainment, changing how music is held and transferred.
Ultimately, a cashless society seems inevitable…but not for a long time yet. Public demand for digital currency may one day become too powerful for the business world – and business aviation – to resist. Fighting the rise of virtual currency may eventually be as pointless as fighting the rise of the internet in the 1990s.
Just as retail banks were forced to embrace the digital fintech revolution or risk losing customers, so business aviation may ultimately need to embrace digital currency to keep growing. For now, though, the best way to manage your payment processes is clear – use PayNode.
By Magnus Henriksson, Global Business Director, PayNode.