It's fair to say the cryptocurrency community has an idea going which is present since the very beginnings (indeed in the Bitcoin's Genesis block), that the cryptocurrencies are here to, in some way, liberate the masses from the clutches of banks and governments, as representatives of entities which in some way oppress or at least control "regular people" by controlling important aspects of the economy, notably global monetary policies. This world-view is an offshoot of crypto-anarchism, the idea that privacy (and in many cases, anonymity) of communication in the Internet is one of humanity's highest values, and everyone has both the right and obligation to exercise this value, especially when it conflicts with the local governments' policies. As crypto-anarchists view inter-personal communication, the cryptocurrency enthusiasts view all kinds of financial transactions, including money creation.
Many crypto enthusiasts are happy to preach views such as "as long as governments control the money, they control you", "if you have debt, you are a slave", or "if the money is in the bank, it's theirs not yours." I think those slogans are dangerous oversimplifications, and do not reflect how the economy currently works. Here's how a couple of often-talked-about ideas play out in actuality - but first, you need to accept that when we're talking about money, we're talking about human psychology first and foremost, not something which is real.
No, the governments do not "print money"
In actuality, "printing money" is a practice abandoned at least 50 years ago, because it reliably leads to hyperinflation. And it's one of the more logical properties of the current global financial system: a loaf of bread takes a certain amount of raw materials, energy and human labour to make. If you pump more "money" into the system, the actual number which describes the "worth" of this loaf of bread will increase. This is the mechanism by which things like these happen in backwards countries which haven't yet accepted how this works.
Additionally, "printing money" in the literal sense of creating physical bills, is not the mechanism by which the amount of money in circulation is increased, again for at least 50-ish years. The actual cash in circulation is a very small fraction of total money in any modern economy. In the case of US, the total amount of paper money (cash) in circulation is about 1.5 trillion USD, while the total amount of USD circulating around the world can be defined as being up to 80 trillion USD (which is about 53x more). Indeed the definition of what is and isn't "money" is currently very fluent and depends mostly on the world view of the author describing it (this is why the concept of cryptocurrencies could happen). My own definition is that it's basically whatever motivates people to do stuff. Let's see if it catches on.
Instead of directly creating money out of thin air, money in fractional reserve systems (which is used in all "western style" countries) is generated by individual, non-central banks, each time a credit is given. Basically, banks are obliged to only hold about 10% (depends on the particular country and time period) of money they give out in the form of deposit money. This forms a multiplication scheme by which a deposit of $100 can, in theory, be used by the bank to issue a $900 loan to someone. In practice, it's a lot more complicated.
The chief mechanism by which modern central banks increase the total supply of money in an economy is Quantitative easing, which is basically changing the interest rates for credits from central banks to local banks in a way that money multiplication happens faster. This is the closest we get to "printing money" in the real world, and the reason it's done in this way instead of just decreeing that a number is increased somewhere in a database is that this is a slower process which allows new money to ease into the economy instead of being dumped into it all at once, reducing inflationary effects.
So no, the money is not being printed by governments or central banks on a whim (among other reasons because of the fact that a lot of money is out of their control), and you can forget about cash being a significant player in the global economic system. The vast amount of money in circulation is digital, just numbers in databases (as described above, there's 53x more "virtual" dollars than cash).
Lots of economic theories have been created to describe exactly how this system should be governed, but I think it all boils down to "a hunch" - because money can basically only used to motivate people to do stuff, playing with numbers and formulas as if people are robots following formulas of economic theories simply breaks down in sufficiently complex scenarios.
No, bank credits are not slavery
The reason why this system is considered good is that it promotes "growth", in a way that the system which preceded it, the "gold reserve system" doesn't, and here's why:
There's only a fixed amount of gold in the world and we humans tend to place sentimental value in physical objects, so it's definitely not infinitely dividable. Would you rather have a solid chunk of gold, a coin, with which you could buy a lambo, or a spec of gold dust, though nominally they have the same worth? Humans reliably choose the former (i.e. we think big things are worth more than smaller things, even if they nominally have the same worth).
Until we come up with a new way to motivate people to work, to create increasingly great things which require an increasing amount of human labour, we need to have a measure of worth which increases in numeric value. Bank credits are basically a psychological tool which keeps people in check not to over-stretch the local social amount of labour available. Yes, I would like to have a company which employs 100 people, but I need to motivate them somehow to work for me. And if I don't have cash on hand (or in a liquid bank account), I can ask for a credit, which burdens me to pay it off in the near future so I won't ask for an extravagant amount. The same reasoning goes if I want to build myself a couple of houses with a lambo in each: I need to motivate people to build me those things.
There are downsides to all of this and most of them are also because of common psychological traits: many people are extremely happy to enjoy short-term gains which would cause them long-term pains, and are happy to sign up for bank credits which will cripple their medium-term futures. And many people who have more money than they know what to do with, use it in non-ethical ways. But those traits have always been with us and will always be with us as a part of what makes us human. Another downside is that this system inherently produces a slight inflation, as new money is constantly created in the economy and some of it "overfills" the ever-increasing "sponge" of day-to-day life (as well as the increasing population!) so prices do tend to rise.
Without bank credits which rely on the fact that the supply of money is easily stretched, the progress of civilisation, and especially expensive high tech, would immediately stall.
Yes, your money in the bank is indeed your own
Anti-bank people are basically right that, if a cash run happens on a bank, any bank, it will not have enough cash to pay out its deposits. But since cash in itself is only a fraction of what "money" today actually is, that's of little concern to anyone except die-hard survivalists.
Our civilisation has come up with a system which actually serves the people pretty much ok. It's not perfect, but it works for the vast majority. If you live in a "western" country, you are probably used to having ATMs all over the place and can get cash wherever you like it. But you're also used to paying with your cards so you don't ever need to touch cash. I think ATMs are currently a psychological gimmick, reassurance that the cash will always be there, to lessen the transition to pure digital money - of which debit and credit cards are currently popular examples.
If you lose your card or forget your PIN, you can apply for a replacement. Your money is not gone, it's stored at a bank under your name and your card is nothing more than an identification document (or device) which authenticates to the bank that it's really you requesting a particular payment. On the other hand, if you lose your cryptocurrency wallet or forget its password, that money is literally gone - completely removed from economy and further circulation. Not many people are ready to be their own banks.
Yes, banks can crash, but so can societies at large, wars happen, ecological disasters happen, and we're always waiting for a meteor to strike us down. I don't think it makes sense to think along these lines (especially since the probability of losing a crypto wallet is far greater than the probability of a bank disintegrating into a poof of smoke). In any case, there are strategies for risk mitigation for most of those calamities.
No, "the man" is not oppressing you, and cryptocurrencies are not the only way out
The entire history of civilisation boils down to how to create a safe environment for people to live out their lives, especially in the context of there being other people, possibly with bigger swords and more muscle. So we're always making and remaking a social contract which says "ok, you there big guy with the huge-ass sword: just leave me alone for a bit and I'll give you something I've created in return - maybe it's bread, butter, or gold". Of course, sometimes big guys with swords didn't listen and so we got revolutions - but here's the curious thing about revolutions: they are not started nor lead by the people on the lowest rungs of social ladders, but by people who want to be the next big guy with the sword. The "little people" only got to play the part of cannon fodder.
For illustration, here's how "big guys with swords" were called through the ages:
- Warlords
- Kings
- Barons, knights, etc.
- Robber barons
- Presidents
- The Godfather
- The Church
- The 1%
- The politicians
- The elite, the Rothschild, the Illuminati, the Bilderberg group
- ... you get the picture
For the most part, people are quite happy living in hierarchies where they give something in return for safety and some basic needs are met, it appears to be another psychological trait we're born with. Most people are aware that some of their tax money goes to shady purposes, and while most of us fight to keep this at minimum, we are also aware that there will always be some criminal activity in society, and there always was, and the goal is not to eradicate it but keep it from doing a lot of harm to a lot of people.
A great and recent progress is that the civilisation has established a way for people to move upwards in status in a way which doesn't involve bloodshed. In fact, this is the core benefit of the idea of "democracy": a standardised way to become the big guy with the sword. Now if only we didn't make up a completely different, parallel way to do this, by money alone, which eroded the one called "democracy".
As it happens currently, most such cases directly revolve around money - again as a proxy to how many (and which) people a person can motivate. It's still very difficult to do, and there's also a psychological element of considering someone "old money" vs "new money", but at least there's a "standard" way to do it.
Consider cryptocurrencies in this light: the original goal of having a currency without the friction of the banking system, without the possibility of it being used in a fractional reserve scheme, to use it to fight the might of banks and governments has lead to exactly the same social constructs with new names. The price of coins is manipulated on the global scale by "whales" (add "whales" to the above list, please!), which also influence the community to their own ends (see the BCH vs BTC clusterfuck), and the transactions are anything but free (on the other hand, the fees are not related to the numeric amount of coins transacted so there's some progress here).
This is very similar to "say hello to the new boss, same as the old boss." I think it's a given that people no matter the circumstances will create similar or identical social structures - it's another thing which makes us human. The rat race is a rat race even if it's done with crypto.
But please, when you're thinking about money next time, think of it as a number for measuring motivation. Whether it is to (re)consider what motivates you to get up early every day to go to your job, and could you be motivated by other things, or how are you dispensing the money you have, I think it's a more useful way of thinking than thinking about debts and credits and the whole rat race thing.
All this is not saying cryptocurrencies are not a good idea - they are, but not as a panacea for problems which are deeply social in nature.