Hey Guys,
I thought I'd dedicate a post to describe, in my own words, my view of crypto-currencies. The history of crypto-currencies begins in 2009, soon after the banking crisis that swept the world. In a nut-shell, the banks became greedy, irresponsible and took advantage of globalization and the system in place to maximize their profit. The end result was that they'd lost large portions of its users' capital and needed to be bailed out by the government.
The government had no choice but to bail them out. Not only because if they didn't do so, everybody would have lost their money, but because they risked a total loss of faith and trust of the banking system among the public . The reason this would be devastating is because banks, currently, have an important role in economic growth. It is the banks which invest in projects, and hand out loans that leads to growth. This is the first pillar of the banking system. This pillar would crumble if the public didn't believe Banks were the safest place to leave their money. This trust is the second pillar of banking and it's the one the government saved by bailing out the banks. If they didn't do this the second pillar would have fallen and caused the first pillar to fall as well..which would have lead to devastating economic consequences. The third pillar of banking is transactions, being able to transfer money from place/person A to place/person B. I see this as a service the banks offer to ensure the public deposits their money into their system.
Banking and it's 3 pillars are very important and have brought great progress to our society over the years since the Medici. however, it's a centralized, semi-transparent, fragile system that by design is bound to go through these failures. It's not the bankers nor the banks themselves that are the problem, but the system that gives the opportunity for corruption. I'm sure that if we were to replace every banker by a totally different group of people, we would have had the same result eventually.
Crypto-currencies can replace the banking system all together. With bitcoin and its decentralized block chain technology it is possible to have another way to transfer money around and keep the capital safe. Not to mention that it's a safer, cheaper and a faster method. Bitcoin alone knocks down 2nd and 3rd pillars. Now what about the first pillar? It is crucial that this becomes replaced as well. When this occurs, banks will have a serious competitor and realistically stand a chance of simply not being necessary in our society anymore. I think Ethereum is on the right path allowing people to invest in other projects through its smart-contract technology ,but I think there is still a lot of work and arguing to be don.
I really believe that this technology will bring, for the first time in history, a competitor to the banking sector. The future is exciting!
Have a great day guys
