How'd life change for you and me?
Bitcoin (Cryptocurrency) is all over the news these days, which has caused a polarized debate of its purpose, value, and function. The opposition assures us that it will crash, that is another bubble, and challenges its intrinsic value since it is “not supported by any hard asset.” On the other hand, the supporters bet it will reach values over $100,000 in the next five years, and for them, the technology represents the next logical evolutionary step to our new digital world.
Time will tell, and the argument may take several years to solve; one thing is sure, though, and it is the fact that Bitcoin cannot be ignored anymore. The sole idea of a decentralized monetary system, supported by consensus and maintained by people for the people, is like looking through a window of a possible brand new world, which makes you wonder — what would happen if Bitcoin became the standard reserve currency that governs our world?
- How will it change the role of governments and banks?
- How would it affect international relationships and policy?
- What would happen to the current education system teaching centralized economic policies?
- What would it mean for you and me, the regular citizen?
For some of us, it is worth thinking about it.
In our current system, governments have been known for manipulating money and increasing its supply to support their operations. We have seen many cases throughout history — e.g., the Roman Empire clipping coins, printing over gold reserves during WWI, in the 1970s moving away from the gold standard, and now pumping the stock market until it bursts.
As citizens of the world, we became so used to this that such practices don’t sound shocking anymore. We know the average citizen can barely stay afloat annual inflation rates; do we even know the actual rate? The point is, we have lived in a money-centralized government-dependent world for as long as we can remember, and money became the silent Master of our time; it might be time to re-think.
In a monetary system backed by a limited asset such as Bitcoin, we could foresee many of these areas being impacted. GOVs could lose the ability to print money as they please, which could translate into better planning, protection of current resources, and thinking twice before going around fighting over other people’s territories. To spend trillions of dollars in armies and weapons, they may have to turn to citizen’s approval for permission. Who knows? We might even witness a separation of Money and State, similar to the separation of Church and State we experienced during the 1800s.
International trading and collaboration might increase as less dependency to transfer value across space — especially international payments and remittances, which right now take days, carry all types of fees and requirements (the problem that a $127 billion Fintech industry is trying to solve). Standardization of policies surrounding exchanges and movements of Crypto are already being developed by various international AML/CTF organizations.
When it comes to financial and monetary knowledge, we might undergo a more distributed spread across socio-economic statuses. More access to resources and the blockchain/ledger, more involvement of the average person to understand and manage their finances. The more understanding every person has about how financial markets function, the more consensus, and collaboration we could experience. Also, since market dynamics govern schools/universities, educators will bake in decentralized ideas in their school curriculum with the latest and best content to attract students and capital.
For an average citizen means that you and I will have access to money that maintains its value over time. Paradoxically, you will be able to trust a trust-less computational network, as you have the certainty it cannot be tempered or manipulated by someone’s interests. If you’re brave enough to venture into Crypto today — you will undoubtedly be ahead of the rest — at least from a financial and capabilities standpoint. People who have adopted Crypto early on will have more opportunities to grow their wealth using novel crypto products (Defi), and as they build their skillset by tinkering with Crypto job opportunities will open up.
I know, it may sound a lot wishful thinking.
But, for a second let’s imagine Bitcoin crashes tomorrow, it gets banned by new economic restrictions, or they turn off the internet — still it would be very hard to go back to an old system.
Satoshi Nakamoto has provided us with some sort of forbidden apple that for those who already had a taste of it, just want more of it. After all, this could be the end of paper currency as we know it. Money, as any other technology it is meant to evolve, which means that no money is forever, and will be replaced sooner or later for a more efficient one. That might be, what we are about to face in our lifetime.
I will leave you with this piece from the book The Bitcoin Standard by Saifedean Ammous.
Such questions cannot be answered definitely at this point, and only the real world will tell how these dynamics will unfold. Monetary status is a spontaneously emergent product of human action, not a rational product of human design. Individuals act out of self-interest, and technological possibilities and the economic realities of supply and demand shape the outcomes of their actions, providing them incentives to persist, adapt, change or innovate.
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