Cryptocurrency philosophical background. Why did cryptocurrencies come into being? What will the future of cryptocurrencies be?
A philosophical background; why did cryptocurrencies come into being?
Money developed from society having trust in physical matter, like gold and silver to society having trust in systems. Long ago, if those (usually royalty) who coined money, debased coins by mixing base metals with gold and silver, the coins devalued because society valued the precious metal content. That view is still current when trust is lost in governments and systems. Many people are currently reverting to stockpiling gold and silver because they have lost trust in the world economic system, especially the FIAT money system. The following problem of the FIAT money system is the primary reason. Printed money supports primarily the people closest to the money generating machine. One recent example was the bailouts of many banks. Newly printed money basically bailed out the people working in the banks. OK, if the banks were not bailed out much other general economic problems would have occurred, but that does not change the privileged position of people working in the banking sector, whose jobs and financial security are more secure than others who are not working as close to money printing. Another big problem of FIAT money exists with regard to development of ideas. Ideas are common property according to the law, therefore privileged people, who, due to their positions in society, have easy access to old and new money, develop most good new ideas. My philosophy called Intequinism focuses on these circumstances and its philosophical and religious background. The development of good new ideas is interlinked closely with idolatry and the coining/printing of money.
During the feudal system people were identified with land. They lived on pieces of land and worked the land. Part of the crops was given to their feudal lords and part was consumed. I can't say exactly how money was distributed during those times, but something definitely changed during the 18th century revolutions and communist revolutions. The labor theory of value became a dominant idea. John Locke and Karl Marx, for example, paid much attention to it in their philosophy. Basically they said all value is represented by labor. Let's say 1kg of meat costs US$10 in a shop. According to them the US$10 can be calculated by adding all the labor value, which brought the 1kg meat to where it costs US$10, together. Marx used the calculation to argue that capitalists, who controls money, take an unfair share of the US$10 because their labor does not represent, the part of the US$ 10 they have in their pockets after the meat have been sold in a shop. The result of the labor theory of value is the current state of affairs. People have legal rights to salaries and wages, they did not have during the feudal times. If a person worked for hours according to an agreement but was not paid s/he can go to court to get the payment.
How does the above relate to cryptocurrencies? The philosophers who promoted the labor value of things did not consider ideas and the value of ideas. They did not consider intequity (capital of ideas). Locke did consider intequity with regard to the value of land by writing a good idea can increase the value of land exponentially, but generally in their time, it seems, arguing for the legal enforcement of payments for hourly labor was the goal. Well, that brings me to the current. What is a current problem with regard to the labor theory of value? Getting paid for intequity is a current problem, which Intequinism addresses. From my point of view cryptocurrencies are the organic change in society in order to cause payments for intequity. Cryptocurrencies are making it possible for others who are not close to the FIAT money generating system to also pay for the development of ideas. A change therefore happened in the way intequity (capital of ideas) gets distributed.
What will the future of cryptocurrencies be?
In current times two theories of money are prominent. The theories are supply and demand theory and quantity theory. The two theories support one another because they give better valuations if used together. Supply and demand theory can easily cause bubbles if it is used without quantity theory. The "madness of crowds and extraordinary delusions", relating to demand and supply have caused many bubbles during the past. Actually, thinking about it more now, makes me think the same bubbles can occur with the quantity theory, because according to the quantity theory, a currency's value is determined by dividing the total value of the assets, which can be bought, with the currency, by the number of units of the currency in circulation. If the assets are overvalued the currency value will still contain a bubble. Another currency valuation aspect to consider is, trust in the system. The more currency systems are trusted the more valuable the currencies are. The trust aspect is currently a big problem, because the system is uncertain. Around the 1700s similar circumstances occurred when anyone could coin money. Eventually things changed and controlling the system with banking licenses, were enforced. More about the development of money can be read at the following link. It consists of quotes and opinions I made whilst preparing a proposal for studies about intequity.
http://www.africahead.co.za/Africahead/QuotesAndRamblings_files/ResearchProposalAboutIntequity.html#_Toc275176993