Cryptocurrencies are being applied in social and public areas. Proof of this are the examples of the appearance of Bitcoin and the processes of its mining in the everyday lives of some people. With the help of mining and mining companies, it is possible to revive the industrial life of "dead" cities, and thanks to the technology of blockchain, it is possible to make transactions from places that do not allow conventional means of fund withdrawal.
Bitcoin for Ghost Towns
On September 4, Bloomberg published an article about the Canadian city of Ocean Falls, in British Columbia, in which Ocean Falls Blockchain, a mining company, intends to open up a farm for Bitcoin and other cryptocurrencies.
The settlement belonged to the monotown because back in the 50s, the residents (about 5,000 people) worked in one enterprise, a pulp, and paper mill. This kind of production requires a lot of energy, so a dam was built to generate electricity. It still functions and produces about 13 megawatts of electricity, 75 percent of which remains unused. The dam is not connected by a transmission line to the North American network, therefore it is possible to sell the excess electricity only to local communities.
Now the city is inhabited by less than a hundred people who are isolated from the civilized world, and the nearest center of Vancouver can be reached only by water or by airplane. Cold winters and frequent rains in the offseason do not let entrepreneurs migrate to Ocean Falls and open a business there.
But the miners, who can be called the nomads of the 21st century due to their constant movement and changes of geolocation, found advantage in the organization of mining farms in the severe weather, as the facilities require low air temperature, large spaces and a huge amount of electricity for successful operation.
Six megawatts, or more than half of the capacity of the functioning dam is to be purchased by Ocean Falls Blockchain, thereby reviving the economy of a ghost town. The representatives of the company have already started signing contracts for the purchase of electricity with local authorities.
In general, the population and the governing authorities are satisfied with the deal, because it will bring "significant benefits and revenues for citizens." The only thing the parties of the contract need to pay attention to is the constantly changing rate of Bitcoin and other cryptocurrencies, because initially, when the firm entered into negotiations with the Canadian authorities, the price of the first digital asset was more than $11,000.
Bitcoin for Remote Areas
The use of unused resources in Canada is not the first example of the exploitation of natural energy sources and adaptation to climatic conditions. At the end of 2017, the State Duma proposed to build a city for the production of cryptocurrency in cities and towns of Siberia, where it is possible to build large facilities and where the weather conditions are suitable for the cooling of a mining system.
Boris Chernyshov, the deputy of the lower house of parliament, proposed this initiative back then. According to him, a mining city would help people make money. In addition, mining activities, with their regulation at the legislative level, would supplement the state budget at the expense of taxes. Chernyshov is sure that if Russia builds such a settlement near the border, for example, with China, it will immediately arouse great interest, and there will be flows of business tourists.
The deputy spoke at CryptoBBQ in August of this year, and said that the position regarding the development of mining cities has not changed. The extraction of cryptocurrencies, as Chernyshev believes, should take place next to largest hydroelectric power stations. To do this, minimal support from the state is needed, as in this case, the population will enter the market itself.
It is possible to create a leading technological cluster on the basis of Russian facilities that will surpass the Silicon Valley in the future. But, as the parliamentarian added, mining activities have not yet been fixed in the legislation and have no legal status.
Bitcoin for Unrecognized States
In the two examples above, the first digital currency was used to a greater extent as an investment in promising activity. The contracts were concluded through fiat and represented work that could be realized (or not) only in the future. In the case of territories that consider themselves independent but are not recognized by the United Nations, such as Palestine, Bitcoin becomes one of the few means of financial communication with the entire economic world.
Unrecognized states, or partially recognized ones, such as Palestine, do not have de facto sovereignty, do not have clearly defined borders, do not fully belong to any territory, which means that they do not have their own currency. Palestine and the Gaza Strip, the most significant and largest territory with Gaza City, use the Israeli shekel, the official currency of Israel, as payment, or the U.S. dollar.
The fiat money of one country with regular use in another, even an unrecognized state, creates dependence on the economic system. Therefore, the Gaza Strip now uses Bitcoin and other cryptocurrencies to make transactions with the rest of the world, as the currencies do not have a centralized authority and do not obey anyone.
Financial Palestinian analysts estimated that the partially recognized state has at least about 20 informal companies that deal with cryptocurrencies and provide services to local users. Clients of crypto firms use Bitcoin to purchase investments abroad. The shares are purchased for digital assets and in some cases are converted into dollars or other currencies, while being on accounts outside of Palestine. In addition, Bitcoin is used to make Internet purchases and payments are transferred. After all, the local PalPay system is similar to PayPal in many aspects and mainly serves the clients of the Bank of Palestine and does not offer a gateway to global trade.
Digital assets, according to the Palestinians, are cheaper, safer, and faster than fiat money. Classical banks, because of risks and uncertain status, often refuse to work with people from unrecognized states, so crypto wallets have become an alternative to the usual financial storage of money.
Palestine is not the only country that is in an indefinite political and economic status. But, according to local residents, the number of which is steadily growing every year, they are most open to cryptocurrencies. Palestinians do not face hyperinflation on the scale of their territory, unlike Venezuelans and Iranians who do not have a basic national currency (the residents of these countries use foreign stable dollars, while the local bolivar and rial are secondary monetary units). Because of extremely fast and uncontrolled inflation for political reasons, the crypto enthusiasts of Venezuela and Iran are forced to keep funds in limited quantities, and users from Palestine may not think about the amount of digital assets.
One more basic property of blockchains is especially important in the Palestinian territories, and that is resistance to censorship, or when any person without restrictions can conduct a transaction. The state, which, in fact, does not exist, cannot issue a law to prohibit or resolve cryptocurrency activities. Therefore, when making a transaction, a veto cannot be imposed on the intermediary (it is necessary in this case as a provider overcoming all problems related to political issues).
This solves the real problem for the population with limited access to the global economy in the face of the ongoing conflict with Israel. Even supporters in the West have closed their bank accounts to send money to the Palestinians.
The main problem for digital coins in such unstable areas is the constant availability of uninterrupted electricity. After all, cryptocurrencies are directly dependent on energy and cannot work outside the network.
In general, the introduction of blockchain and the use of cryptocurrency allows local entrepreneurs to enter a new level of development, gain more confidence, and realize themselves. Digital activity implies indifference to the social characteristics of the population, the state, and other groups that play an important role in the classical financial system.