An economic driver for life fueled by blockchain: Bitcoin changes lives

When you make business technology investments, pay attention to the dreamer. They are the ones making history. It may not just transform your business but your life.

Blockchains create business networks. Sharing information seamlessly we can share assets when connected to our suppliers and clients – new opportunities open touching families not just businesses. Blockchain holds the promise of hope grounded by a strong technology fabric, connecting life. Hyperinflation and remittance disrupt life: Bitcoin provides an alternative.

Hyperinflation ripping the fabric of life

Economic necessity is driving Bitcoin exchanges globally. It’s changing the lives of families from Argentina to Africa; Bitcoin offers a less volatile alternative to hyperinflation that is rampant in many economically depressed countries.

Dilip Ratha, the co-author of the Migration and Remittances Factbook 2016, was quoted stating, “At more than three times the size of development aid, international migrants’ remittances provide a lifeline for millions of households in developing countries. Also, migrants hold more than $500 billion in annual savings. Together, remittances and migrant savings offer a substantial source of financing for development projects that can improve lives and livelihoods in developing countries.”

Bitcoin will not solve global warming. It will, however, change lives across the world by giving families options to side-step hyperinflation.

Bitcoin is a good way to hedge against climbing inflation rates. Inflation rates in 2016 were extreme for many countries such as Venezuela (180.90 percent), Nor Korea (55 percent), Syria (43.02 percent), Argentina (32.90 percent), Central African Republic (25.58 percent), Haiti (14.80 percent), and Egypt (9 percent). For perspective imagine if you walked into a grocery store in Venezuela and bought a loaf of fresh white bread (1lb) for $0.56 USD, then in the same year the price was $1.01 USD – you received no raise. The situation begins to get life-threateningly real when the average monthly salary is equivalent to only $20.00 USD, according to Bloomberg in 2015. Unbelievably Venezuelan salaries, paid in bolivars, declined 97 percent over the last three years. Please reference Chart 1.1 for a visual depiction of the Venezuela inflation rate over the last 1-year.

Historically, there has been a lot of volatility in Bitcoin; it’s getting under control. Volatility measures how much the price of a financial asset varies over time. Assets that are more volatile carry greater hold risk as the price may go up or down substantially. A less volatile Bitcoin, benefits citizens, as the cost converting into and out of Bitcoin, will decrease. The limited alternatives in many economically starved countries, makes Bitcoin a real viable current substitution, with tolerable volatility.

Comparing the price of Bitcoin over the last 1-year, June 2015 through May 2016, it’s appealing that Bitcoin displays a positive trend increasing in value. Please reference Chart 1.2 below that illustrates the Bitcoin marketplace over the last 1-year.

The Bitcoin Volatility Index (as of May 2016), reported the latest 30-day estimate at 1.39 percent volatility and the latest 60-day estimate at 1.22 percent. For reference the average volatility of gold averages around 1.2 percent.

When comparing the 60-day volatility estimate against the Venezuela inflation rate for December 2015, it’s favorable to 179.68 percent. The decision of 1.2 percent volatility over 180 percent inflation would be a straight forward decision for most.

Offering an alternative to hyperinflation with a less volatile currency is how Bitcoin will improve the financial stability affecting families and changing lives.

Remittance, eliminating the middleman

The World Bank reported that international migrants sent $601 billion to their families in their home countries in 2015, according to the Migration and Remittances Factbook 2016, generated by the World Bank Group’s Global Knowledge Partnership on Migration and Development (KNOMAD) initiative. By 2016, foreign workers will transfer an estimated $610 billion. Unfortunately, all that money won’t reach home. Transfer fees, exchange rate margins, banks, and post offices for money transfers will remove between 54.9 billion and 46.97 billion, from reaching the final destination country.

The average cost to send $200.00 USD back home was 9.0 percent in 2010 and slightly declined to 7.7 percent in 2015. Sending $10,000.00 USD would incur remittance fee of about $770.00 USD.

The World Bank published the International Migration at All-Time High article in Q4 2015; that reported, “The top 10 migrant destination countries were the United States, Saudi Arabia, Germany, Russia, United Arab Emirates (UAE), United Kingdom, France, Canada, Spain, and Australia. The top 10 migrant source countries were India, Mexico, Russia, China, Bangladesh, Pakistan, the Philippines, Afghanistan, Ukraine, and the United Kingdom.”

Transfer Fees

Transfer are not only charged by the transfer operator, where migrants collect their money in the destination country. There are SDSSD types of transfer related fees: 1. Transaction cost typically charged by the sending agent, 2. Current conversion fee, 3. Operator fee, common for smaller operators, 4. Banks (remittance agents) may earn indirect fees in the form of float (interest) by investing funds before delivery to the beneficiary.

In theory, Bitcoin has no middleman fees. However, in practicality to disseminate currency there can be fees associated with Bitcoin. Let’s walk through an example of $10,000.00 USD.

Transfer Fee Example, sending $10,000.00 USD

  • Deposit Fee: Transfer international funds into Bitstamp, at a 0.05% fee, minimum fee $7.50 USD = $7.50 USD, leaving $9,995.00 USD.
  • Transaction Fee: Transfer international funds into Bitstamp, at a 0.25% fee, under $18,000.00 USD= ~$25, leaving $9,970.00 USD.
  • Wire Transfer Fee: Local Bank fee for transfer of funds e.g. Bank of America = $45.00 USD, leaving $9,925.00 USD.

Total transfer fees = $75.00 USD or 0.75 percent

The difference between transferring conventionally versus through Bitcoin could reach $695.00 USD in savings per $10,000.00 USD spent.

Bitcoin doesn’t solve all problems. Bitcoin won’t be getting a government bailout, technology investments of at least a device with internet access are required, and merchants need infrastructure to support payments. Despite challenges Bitcoin has promise.

BitPagos (Argentina), BitPay (Brazil), CoinPip (Singapore), and (Philippines) introduce Bitcoins as a reasonable method to hedge against rocketing inflation rates. Bitcoin does provide a viable alternative to absorbing excessive overseas fund transfer fees.

Bitcoin offers more than hope, giving families back their lifelines.


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Peter is a technology executive with over 20 years of experience, dedicated to driving innovation, digital transformation, leadership, and data in business. He helps organizations connect strategy to execution to maximize company performance. He has been recognized for Digital Innovation by CIO 100, MIT Sloan, Computerworld, and the Project Management Institute. As Managing Director at OROCA Innovations, Peter leads the CXO advisory services practice, driving digital strategies. Peter was honored as an MIT Sloan CIO Leadership Award Finalist in 2015 and is a regular contributor to on innovation. Peter has led businesses through complex changes, including the adoption of data-first approaches for portfolio management, lean six sigma for operational excellence, departmental transformations, process improvements, maximizing team performance, designing new IT operating models, digitizing platforms, leading large-scale mission-critical technology deployments, product management, agile methodologies, and building high-performance teams. As Chief Information Officer, Peter was responsible for Connecticut’s Health Insurance Exchange’s (HIX) industry-leading digital platform transforming consumerism and retail-oriented services for the health insurance industry. Peter championed the Connecticut marketplace digital implementation with a transformational cloud-based SaaS platform and mobile application recognized as a 2014 PMI Project of the Year Award finalist, CIO 100, and awards for best digital services, API, and platform. He also received a lifetime achievement award for leadership and digital transformation, honored as a 2016 Computerworld Premier 100 IT Leader. Peter is the author of Learning Intelligence: Expand Thinking. Absorb Alternative. Unlock Possibilities (2017), which Marshall Goldsmith, author of the New York Times No. 1 bestseller Triggers, calls "a must-read for any leader wanting to compete in the innovation-powered landscape of today." Peter also authored The Power of Blockchain for Healthcare: How Blockchain Will Ignite The Future of Healthcare (2017), the first book to explore the vast opportunities for blockchain to transform the patient experience. Peter has a B.S. in C.I.S from Bentley University and an MBA from Quinnipiac University, where he graduated Summa Cum Laude. He earned his PMP® in 2001 and is a certified Six Sigma Master Black Belt, Masters in Business Relationship Management (MBRM) and Certified Scrum Master. As a Commercial Rated Aviation Pilot and Master Scuba Diver, Peter understands first hand, how to anticipate change and lead boldly.