For the cryptocurrency industry, gaining the trust of the wider populous to grow the user base has always been a critical challenge to overcome. Progress has been steady, but it has, ironically, taken a series of incidents of turmoil within the fiat monetary systems of various countries that has helped the industry grow in that aspect. Now, with the prolonged restrictions placed on the movement of both fiat currency and assets into and out of Venezuela, we are seeing a further shift to Bitcoin. Peer to peer Bitcoin payments are on the increase and web based freelancers are now moving towards payment via Bitcoin, bypassing the fiat system entirely.
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We have seen in various countries, notably Greece during its financial crisis, that when the fiat currency systems show signs of uncertainty, people look for alternatives. Increasingly that alternative has been digital currencies, with spikes in Bitcoin transactions coinciding with restrictions on fiat currency movements in Greece, and as Venezuela hit hyperinflation, a similar upturn in Bitcoin use was seen there, as we reported in June.
The situation in Venezuela has not improved, it is if anything deteriorating, with restrictions on the movement of fiat currency as well as assets including gold both into and out of the country now in place. This has seen another increase in Bitcoin use, however what is interesting is the way Venezuelans are acquiring their digital currencies. Although bitcoin exchange SurBitcoin remains the main point of access to the cryptocurrency, many who work for themselves online, such as freelance writers, designers and web developers, are turning to Bitcoin for payments from outside of the country for their work.
Sites like XBTFreelancer are making this possible by providing a complete working environment for freelancers to bid for, obtain and deliver work across the world and receive payment for the work in Bitcoin. While freelancing websites are nothing new, in general they require a bank account or payment solution account such as PayPal to both send and receive payments for work. The move to Bitcoin represents a real change, as it empowers the unbanked and removes restrictions on who can operate as a freelancer.
Additionally, there has been a significant increase in peer-to-peer bitcoin payments, with Bitcoin funds sent by friends and relatives in America and other countries also rising significantly. This shift towards digital currencies for earnings and aid in times when the fiat system delivers uncertainty and restrictions suggests an underlying trust in the digital currency industry that did not exist even five years ago.
The challenge faced by the cryptocurrency industry is to build on that trust and grow usage beyond emergency situations by leveraging these occurrences to position any digital currency as a viable fiat alternative.