Everyone is getting super excited about micropayments, but cryptocurrency unlocks something that is a little under-discussed, the advent of single party macro payments.
While brainstorming 'cool things' the creation of cryptocurrency unlocked with a friend today, one thought I had was how macropayments could drastically change how the world functions.
Let me explain...
If you were fortunate enough to be a billionaire, you normally wouldn't keep all of your money in cash in a bank account somewhere (which following this reasoning, expecting anyone to keep a billion dollars stored in just plain old non-appreciating bitcoin may not make sense, even with its disflationary stature). Your funds would normally be tied up in investments or other financial instruments, but on the rare occasion that you needed to make a billion dollar payment (to purchase a company or a second private island) you would sell those investments, get enough money into a bank account, and send a wire or bank note.
Behind the scenes, you have probably dozens if not hundreds of people working at the sending bank, receiving bank, and numerous federal institutions that would be involved in facilitating that transaction, all being done underneath the jurisdiction of the governments the banks are in as well. While it is unlikely freedom loving countries like the US would block the payment... they could. Less freedom loving countries are likely to see their populace's capital stored elsewhere than in local banking.
With cryptocurrency, you can now send that billion dollar equivalent with the extremely anxiety-raising push of a button. With zero bank involvement, and more curiously, zero government involvement.
Billionaires are a bit of a rare animal, but they can make or break a jurisdiction's budget. While this often only affects state politics, we might be entering a brave new world where this begins affecting entire countries. And where instead of a move across state lines, we see a move... away from any jurisdiction at all.
As the infrastructure built up around Bitcoin grows, the desirability of transferring one's holding not necessarily into cryptocurrency, but cryptocurrency-backed assets, becomes much more alluring. While you could make a billion dollar payment in crypto today, liquidating that amount would take time (which costs money).
The one thing that not even money can purchase for these billionaires is real freedom, freedom from a government's influence on their assets, wealth, and financial future. Crypto could unlock that, and with that, a government would lose its influence on an extremely important and rare breed of citizen.
What this means is that companies, banks, and investment funds focused on services large clients should start considering offering crypto-backed assets that not only generate future returns, but also future freedom for billionaires.
And countries, and political leaders, probably will need to think about new ways to tax individuals with capital as the world changes.