This is an illustration of what it’s going to be like when Bitcoin or something like it becomes more dominant than any fiat currency.
At the end of every month, from work you get paid in Bitcoins, say 100 miniBits. (A miniBit is one-thousandth of a Bitcoin, a microBit is one-milionth.) That money doesn’t get “directly deposited” in a bank. The Bitcoin infrastructure does not need banks. Instead, that money gets “deposited” by your company directly to your Bitcoin account. So on the first day of the following month, you check your account by opening a simple app on your smartphone, and verify that indeed, 100 miniBits have been deposited. (To simplify the illustration, let’s omit taxes and other possible monthly deductions.)
You work mostly from home, driving to the company office only when there is a meeting. Just before leaving for a meeting, your wife asks whether you can drop by the grocery store. Sure, you say, and asks her to send you the grocery list in a text message later, preferably after the meeting so you are also reminded by her message. The text message has the following list, together with maximum prices beyond which she instructs you not to pay, but instead to drive to another store for those.
One ten-kilo bag of rice – 25 microBits
Two kilos of Tilapia fish – 135 microBits
One small bag of ground coffee – 5 microBits
One dozen eggs – 12 microBits
One liter of milk – 23 microBits
The total being 200 microBits. As you enter the grocery store, the Bitcoin program in your smartphone detects that you are in a business establishment, and automatically gets ready for any payment you may make to the Bitcoin receivable account number of that establishment. It does that whenever you are in the vicinity of any store registered with the Bitcoin network, just in case you decide to buy anything.
You pick up the items one by one, and as you pick up each one, an RFID detector on your smartphone identifies what you pick up, prompting the Bitcoin paying program to ask you for permission to pay. The Tilapia item costs 140 microBits, but you tell your smartphone to pay it anyway. As soon as you say “Yes, pay”, the Bitcoin program credits the grocery account 140 microBits. One liter of milk costs 18 microBits today, so the total comes out to the same, 200 microBits.
No check-out counters! As you head out of the store, your smartphone flashes an image of your receipt. You take a glance, thinking how wonderful it is that by now your wife has received an email with a copy of the same receipt.
All those credit cards in your wallet are gone. In fact, you don’t need a physical wallet anymore. Your smartphone serves both purposes now, including a hundred others.
All of the above will be visible to users of the Bitcoin infrastructure. What is not visible is the tremendous benefit we will all gain from a system that is NOT under any centralized control. No central banks to decide how much Bitcoins should be worth! We all decide ourselves how much each item we buy is worth, in terms of Bitcoins. All these billions of decisions every second, in turn, determine also the value of every Bitcoin.
A startup from Makati actually just released its own cryptocurrency. Check out the details here: http://tagbond.com/blog/tagcoin-philippine-startup-launches-the-worlds-first-universal-rewards-coin/