Crypto currency is throwing a fundamental and existential question at us and it's not an easy one: the question of centralised economic value that sustains commerce. We are entering a phase in human history where the fundamental commercial relationship is being realigned by technological changes and the banking sector and states are losing relevance.
Crypto currency poses many interesting questions. Why would you use the same medium to buy milk, go for a movie, get a haircut, dine at a restaurant, use Airbnb, take Uber. Why can't we have different mediums for different economic relations. Or rather, is the same medium effective enough to satisfy a commercial transaction. Fiat currency is limited in its potential and is controlled by the state largely for reasons that we are not comfortable with. A state ideally should not interfere in a commercial exchange between two citizens unless it's something forbidden for a reason we universally agree to. Like selling and buying drugs, etc. In any case, the primary purpose for the state to overlook a transaction is to collect taxes so that it can build roads, wage wars, etc.
When the medium of exchange is taken to the virtual world, the power to attach it to certain conditions are easier. The chances of fraud are almost eliminated. At this juncture, we start questioning why we need the state to be part of a transaction when it can be purely limited to peer to peer. The state, for its functioning, can be a paid a universal flat fee for upkeep of roads, police force etc. It doesn't have to snoop over a fundamental human relationship.
With blockchain, administration will be decluttered and with it largely costs of running an expensive government. This will alter the future state. Eliminating governments from every transaction. If the state has no control over money, then this is a natural outcome.
Tribal life
Crypto currency is disrupting the fundamental ground we are standing on which was till now controlled by banks and the state. Don't forget that before we had fiat currency there was only barter. So if you wanted a service in primitive societies or even just a few centuries back, you'd exchange it for meat or bones or fur or whatever you had in surplus which is of value to the person is giving you the service or product. Crypto is reinventing this wheel. You are storing your assets in the medium that you find valuable to your day to day existence.
Nation states and large banking corporations have come into this space and have controlled our spending, our way of life. But Crypto has the power to put us back in this primitive space.
The state backed by banking interests created currency and imposed it on us. They collect taxes through fiat. Crypto is so radical that it's giving power to the peasant and the state and banks will have to retreat from civil society. Of course they will try and cease back this control once they find a way around it. But I think it's not going to be an easy two decades ahead of us. Many things around will collapse - banking, military funding, democracy the way we know it.
An easy transition will happen only if states adapt smoothly. But if the banking sector collapses, the property market will collapse with it, I think there will be a civil war. People are actually losing faith in government controlled currency. People who live in denial will be faced with the grim reality of an uncertain but more interesting future very soon.