Someone told me the other day that the promise of Bitcoin in 2014 was remittance. I think that they were right. A lot of people, last year, were convinced of Bitcoin’s merit as an instrument of remittance, including me. The problem is that remittance usually requires a third party in order to support and high liquidity in the currencies being transacted among.

But as this train gets a-chuggin’ I’m realizing more and more that the future of remittance is no remittance companies. Counterparty or some type of persistent, trusted asset issuance can exist on the blockchain. Let’s call it COINBASEUSD. Coinbase might back this Counterparty asset with real, auditable money. Then someday, some trusted Brazilian exchange will make XREAL. Both of these would be on the open market, and could be swapped in and out. In a world where a decentralized markets or layers on top of them like Medici exists, this swapout would be nearly free - no person (save for the miners confirming the transaction) would get a vig. Now imagine a world where a government or 10 governments realized that they could issue at $0 cost (which means no revenues from seignorage which they will lament I’m sure - though I’m not sure why they wouldn’t simply issue cryptographically verifiable, collectible coinage). If that were issued on the blockchain, one could simply jump online, and transact in any issued money they want. Simply put, remittance with 0 friction and no middlemen.

The implications are kind of enormous. For those that want to hold their money in something stable like USD, they could do that without ever having to ask anyone’s permission. They could swap in and out of USD without paying anything substantial, which would mean they could subject themselves to the whims of any central bank they wanted to. So here’s the thing, while the blockchain is powered by Bitcoin, and while Bitcoin is the money of the blockchain, if you aren’t paying attention, what you’ll miss is the fact that the blockchain does not require you to transact in Bitcoin. And once you get that… you might see why this Rube Goldberg contraption we’ve built is so important.