COVID-19 – DAY 74 – What Effects May Linger?

Today is April 3, 2020, and it has been 74 days since the first U.S. COVID-19 patient was diagnosed. I wish I could say that overall things are getting better but that would be a lie, as the data still seems to be getting worse. Having said that however there are a few positive signs. The last week or so has been extremely tough for Italy, but it now appears that the daily new case totals could be leveling off. That does not mean that Italy is out of the woods though, the Italians will have to remain vigilant over the next few weeks to prevent a second wave of infections. As for the U.S., things continue to get worse, the daily new case totals keep climbing and so does the daily death toll. As of this morning, the total number of confirmed cases in the U.S. is over 257,000, the daily new case total is already over 12,000 and the daily death total is over 450. To illustrate the increase in the rate of infection in the U.S., it took 67 days to reach 100,000 confirmed cases compared to the next 100,000 cases which only took 5 days. As bad as things seem today the medical experts are now saying that the next two weeks might prove to be the toughest.

Because I am confident that this is not the last pandemic this world will see, I am pretty sure that this experience is going to stick in many people’s minds. Going through this experience will most likely change the way people interact with each other and make them much more aware of their surroundings and the possibility of infection, not just person to person but also off surfaces. In my opinion, having gone through a large-scale pandemic like this will open people’s eyes to just how vulnerable we are to something we cannot even see. I believe that for some people, especially older people, it is going to take them a while to feel comfortable again around large groups of people. Many will be hesitant to go into a crowded movie theater, restaurant or sporting event for quite some time. In my opinion, this hesitation will have an impact on how quickly our economy recovers from this crisis. I have heard politicians and even some experts say recently that they believe our economy will bounce right back in a very short amount of time once this crisis ends. Although I do understand that politicians want to remain positive and paint a bright future, I cannot say that I agree with their forecasts. This crisis would have to end very soon for me to change my view and the longer this goes on the more convinced I get that recovery is going to take a long time. 

Another side effect of this crisis I can envision is it causing governments around the world to speed up the move to digital currencies. We have been moving in that direction for a while now, but I believe this will accelerate that pace. Why? Because Paper and coin fiat currencies are extremely dirty and a possible transmission source for diseases. A 2002 report in the Southern Medical Journal showed found pathogens — including staphylococcus — on 94% of dollar bills tested. Paper money can reportedly carry more germs than a household toilet. And bills are a hospitable environment for gross microbes: viruses and bacteria can live on most surfaces for about 48 hours, but paper money can reportedly transport a live flu virus for up to 17 days. 

Central banks around the world have been discussing digital currencies for a while now. In my opinion, following this crisis, there will be an effort by governments around the world to identify and remove possible disease transmission sources. At least I would hope that would happen to try and mitigate the spread of any future pandemic. As I said we have already been moving in that direction anyway with debit cards, credit cards, mobile payment apps, and online bill payments to name a few. In fact, economists estimate that only 8 percent of the world's currency exists as physical cash. The rest exists only on a computer hard drive, in electronic bank accounts around the world. Also, if you look at the amount of cash that banks physically hold it is a very small amount when compared to their deposits on hand. This is called fractional reserve banking; the banks are only required to hold around 3% of their total deposits as physical cash the rest exists on the bank’s computer hard drive in digital form. Okay, so if the world central banks do decide to phase out physical cash and move to all digital currencies does that mean that cryptocurrencies could see mass adoption soon? In my opinion no, not any time soon at least. Over time it may change the perception of cryptocurrencies in the minds of the general public. Once people grasp the thought of currencies just being digital, they may decide to also investigate cryptocurrencies. In my opinion, digital fiat currency will still have some of the same problems as a physical fiat currency. Sure, you will have eliminated the hazard of disease transmission from dirty money, but they will still be controlled by governments and central banks. Therefore, they will be subject to the unlimited creation of new coins as governments see fit, increasing the money supply and diluting the value. You will also still be under the control of a bank or another central authority, and when making transfers you will still have to go through an intermediary whom many times charges a fee to complete payment or transfers.

This is where cryptocurrencies have a distinct advantage because cryptocurrencies use a peer to peer network there is no intermediary needed. When you make a transfer, it is directly from one person to another. You also have total control over your money (crypto), it can never be seized, you can also make transfers to anywhere in the world without needing authorization from any third party. Along with this control comes the responsibility of keeping your crypto safe but because it is digital there are many safeguards you can take to accomplish this. I’m not saying that the phase-out of physical currency is going to happen this year or next and who knows it may never totally disappear. I do believe, however, that it is only a matter of time until it will be very rare to see someone use it for everyday transactions. I also believe that this crisis we are currently going through will only speed that process up. I hope you all stay healthy and safe. Donald Hancock


Big-sky-Crypto  Montana, USA    

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