I first heard about cryptocurrencies a few months ago. Since then my life has changed so much. I seriously thought about the economic system in which I live. And I'm very grateful to all the enthusiasts who spend their time teaching others about the aspects of financial literacy and the topic of cryptocurrencies.
So let's see, how currently the economy functions.
I'll try to use the most simple images and wording to make everything very clear and simple. To begin with, that one person cannot be at the same time a farmer, a doctor, a cook, a musician and a shoemaker.
We all are different. Everyone has his own talents and abilities. So for one person is almost impossible to create all the necessary goods and services. Therefore, it is necessary the division of labor and exchange of goods and services. It is a natural necessity. And that's exactly why any civilized human society needs to have a system that is appropriate for the convenient exchange of goods and services.
And that's why the money appeared.
Money is a special good, intended to be exchanged for other goods. Money represent value of goods and services. And every community of people needs someone who will create money. In our days usually the country's Central Bank prints money. The Central Bank ("The Federal Reserve" in the US) creates banknotes (painted paper), which we use as money. But the Central Bank is not just handing out printed money. It credits the society at interest. This is called refinancing rate or key rate. In Russia, where I live now, this rate is approximately 10%.
Thus the government creates for the people a system of exchange of goods and services.
And people are paying to the Central Bank of their country for the maintenance of this monetary system. The 10% (now in Russia) is the primary fee for the use of the monetary system. In fact, if the Central Bank could directly lend to people and corporations, they would pay only 10% of their products and services to the Central Bank (and thus to the government). And it would be a good deal, I think. Provided that the Central Bank (along with the entire state apparatus, including law enforcement agencies) would keep this monetary system free from parasites.
And who are these "parasites"?
Those who do not produce any valuable goods and services, but some cunning way receive money. What are they doing in essence? In essence, they rob the population of the country. It's all the same what to draw a counterfeit money and exchange it, for example, on food. By itself, the banknote carries no real value - you cannot eat it, cannot use it as clothing, and so on. It turns out that the person who drew this banknote, did not give society anything really valuable, but have received real value - food.
The more of these parasites, which live at the expense of other people's work, so much the worse for society as a whole. It's a simple and obvious idea. It is like parasites in the human body.
So the idea is that government officials receive the goods and services produced by society, because they support the country's financial system in a healthy condition, not allowing the parasite to multiply and to oppress people. After all, how can the economy grow, if the number of parasites increases? How can a people prosper if they are constantly robbed?
And this is an ongoing issue which is now in virtually every country. In other words, you have created something valuable, or gave someone some valuable service, and you've got the money for it. But with inflation, you lose part of your energy that you put into this.
When the scale of the theft be very large, society is immersed in economic crisis.
And people face in horrific problems. They can't buy food, can't buy clothes, can not buy the necessary survival stuff. Again, this is a complete analogy with the human body, which is filled up with parasites.
So, it seems the problem is that the government of many countries do not perform their duties properly. They are not struggling with parasites. Causing the world is shaken by economic crises. I would say even more. Unfortunately, they don't just allow these parasites to rob the society, they're constantly printing the money and thus are robbing people themselves. In other words, when the money supply is expanded, but the number of valuable goods and services remains the same, prices rise, and people get poorer.
Although the state government is struggling with counterfeiters, but they are essentially doing the same thing when printing fiat money. So the true reason for local and global crises - parasites who steal. When somebody is telling ordinary people in difficult economic terms about all kinds of "objective" causes of the crisis, it is just a hoax, designed for the ignorant. The true cause of the poverty of society - thieves, with whom the state government does not fight properly.
How cryptocurrency can solve this problem?
I need a hero!
I'm holding out for a hero 'till the end of the night,
He's gotta be strong
And he's gotta be fast
And he's gotta be fresh from the fight!
- Bonnie Tylor ("Holding Out for a Hero")
I remember when subway tokens were sold by real people. But then they were replaced by robots. Similarly, governmental functions associated with the management of the financial system will soon be replaced by robots too. It is logical and it is natural. Especially given the fact that the computer will be able to serve the population much better than defaulting official.
The monetary and financial system requires three components:
- Money Carrier (it can be gold, painted paper, rare gems, wheat, salt, etc.)
- Social Contract.
- Market of Goods and Services (or infrastructure).
Now in the vast majority of countries as money used paper painted with symbols of the country and the government (so called "paper currency"). And the people agreed among themselves to give really valuable things for this paper. It is a Social Contract. The market of goods and services is formed when a lot of people joined this Social Contract. And this market (infrastructure), in essence, makes this painted paper the true value.
That is, if at some point, people will massively fail to respect the Social Contract, the economic system will collapse. Imagine that you come to the grocery store, and the salesperson will tell you: "I will not give you bread for your paper pictures." In this case you risk to stay hungry.
But people will not give up this system if there was no better alternative.
And the value of money is ensured thanks really valuable goods, which can be obtained in exchange for money. In other words, the most important is the market of goods and services.
Cryptocurrency is able to rid society of corrupt officials and the arbitrariness of tycoons. And due to this it is possible to raise the value of your goods and services.
To put it simply, if you bake bread, thanks to the cryptocurrency financial system, you will be able to sell it more expensive. Now if you can trade one loaf of bread a quart of milk, the cryptocurrency financial system will allow you to exchange your loaf of bread two litres of milk. Why? Because the financial system based on cryptocurrency throws out a lot of middlemen living at your expense. How? At least you can be sure that no one will print money and nobody will charge you for storing your money and for money transfer.
In other words, thanks to the cryptocurrency, you can become richer.
To be rich does not mean to have a lot of paper (fiat) money that is constantly losing its purchasing power. To be rich means to be able to buy a lot of really valuable things. And what's the difference what money carrier be used if I can get vital valuables?
Thus, the main task is to get rid of parasites and to form a complete market of goods and services. And here Steemit activates the full power of social networks. The social network is perhaps the best tool to build a market of goods and services. Modern corporations spend more and more money on promoting their products and services via social networks. This proves the fact that social networks, not television advertising become the main way of promotion.
In his article, @dan explained why based on Bitcoin or Ethereum it is impossible to build a social network with the same features as in Steemit. Thus Steemit, that combining the power of social networks and the power of cryptocurrency is the most promising crypto-economy project at the moment.
What should we do to accelerate the advent of a crypto-economy era?
I think the biggest support that we can give to this project is to attract people who create valuable goods and services. In other words, together we can form a complete market of goods and services that will be able to cover all of our living needs.
Exorbitant taxes that are not returned to the citizens of the state because of corruption. Huge fee for transferring money from the buyer to the seller. The constant depreciation of money. All these and many other economic problems can be solved thanks to the crypto-economy, and in particular, thanks to Steemit.
Because the strength of Bitcoin is in the infrastructure, that is, in a mature market filled with products and services. This is the real strength of Bitcoin. However, Bitcoin does not use the real power of social network. So most people in the world still don't know anything about Bitcoin and alternative crypto-economy. I think Steemit is able to distribute itself much faster than Bitcoin. Because Steemit uses the potential of social networks.
OK, let's make summary.
In the modern economy there are too many thieves and parasites who live at your expense. In other words, you work not only for yourself, for your family and for your community. You have to work for slackers and cheaters. And this is one of the major reasons for which you may be experiencing financial difficulties and can't afford to use many goods and services necessary for a healthy life.
Financial and accounting system based on cryptocurrency is able to eliminate the majority of these slackers and schemers. In the end, you'll be able to afford to live better. And there's a clear humanistic mission of cryptocurrency.
There are of course many pitfalls in the economy based on cryptocurrency. However, if you look, you can see significant advantages. And Steemit - the most promising system from the point of view of formation of the market of goods and services. Because Steemit is a new age social network.
Today I bought a certain amount of Steam Power. This is a long term investment and my contribution to the future crypto-economy era that will cleanse the society from a variety of parasites that make society sick. I hope that many intelligent and visionary people from around the world can unite through Steemit. And I am very glad and happy that I can participate in this.
#money #steemit #steem #bitcoin #ethereum