"It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe there would be a revolution before tomorrow morning." - Henry Ford.
In the early stages of trade, gold was the standard. Gold was limited, therefore, it couldn't be inflated, but it also couldn't be regulated. So the government created its own currency and asked people to use their currency instead of gold. The money you and I use is fiat.
The central banks controls all of it. They have the ability to manipulate your purchasing power. While we work all day to earn our wager, the central banks just print more money and thus reduces our money's value.
What do you think happens when you ask for a loan from a bank?
The bank doesn't gives you loan from from other people deposited money. They just create it. You need money? Let me create some more and give to you as loan with interest. Result? - It inflates the currency, thus reduces your purchasing power.
All the power is centralised to a few. The Great Depression and The Great Recession happened because these people in power (central banks officials) manipulated with their currency.
History has shown that these centrailsed authorities have occasionally breached out trust.
The fiat currency system we have is a broken and flawed system with too much power in the hands of few.
The solution? drum rolls - CryptoCurrencies
Currencies like Bitcoin and Altcoins have certain properties which make them worth replacing the fiat system:
Decentralized - Run BY the community that uses it.
limited supply - Cannot be inflated.
Secured by the beautiful and powerful math of cryptography - Practically un-hackable.
Completely public - No corruption (and we think why govts don't like crypto).
Trust-less.
Crypto has some problems as well. Since it doesn't has any intrinsic value (we gave it value because we wanted to), volatility is big problem. Though as crypto gets adopted, volatility would decrease.
Energy usage is also a problem though I think proof of stake and hash-rate dependent difficulty for miners could greatly optimize the process.
Crypto brings back the goldness back to trade (quite literally). Crypto has the trade properties gold AND has all the benefits of modern money exchange like:
No one could have transferred gold from one country to another within minutes. But you can do that with crpto-currencies which have the properties of gold.
No authority could just come up and say some notes are illegal (looks at BJP). Crypto couldn't even be banned. Unlike Gold, you couldn't just take away their asset. What does it mean to posses Bitcoin? It just means I "know" private key to a Bitcoin wallet. That's it. The wallet doesn't even exists. It's balance is calculated from the blockchain that no one can tamper or shut-down.
Crytocurrencies bring power BACK to the people. It distributes power. It's the true currency of a democracy.
How Central Banks work :
How Bitcoin works :
Note - I'm not saying Bitcoin is the solution. I'm saying decentralised cryptocurrencies are the solution.
Tags : bitcoin, crypto, cryptocurrency, virtual currencies, crypto currencies, banks, money, fuck you rbi, math, blockchain