In the last 77 years (from the end of World War II to now), we have seen incredible changes in our society, in he way individuals think and interact with others, the way businesses are built, and the number of opportunities that have surfaced have all changed. Like the possibility of manufacturing something in one place and selling it on the other side of the globe, having the chance to take a plane in the morning and be at lunch time in New York City, or being able to video call a friend that is backpacking in Australia.
What has brought us to this point is of course technology. The way in which technology has evolved, especially in the last two decades, has brought us all much closer. Mobile Phones, Internet and Planes are just examples. Countries are now able to exchange information and goods, and the processes are being reviewed and improved constantly.
The concept of having people, goods and information, able to travel across the globe, takes the name of Globalization. Such a beautiful word that makes us all feel part of something bigger. But of course there are pros and cons, because behind the spread of an ideology there are always those that will be looking for defects, imperfection that could mine the stability of the idea itself. Some can say that globalization can put at risk individual countries because of the greater good of the entire world. Extreme theorists can even point out that a situation like this will allow super powers to spread their political influence, meaning that again individual countries can suffer from such a geo-political situation.
Here is where Cryptocurrencies come into play. First we need to consider their libertarian intrinsic characteristic, to reject any control or involvement from any government. A new approach is being introduced, one where Individuals are the only one responsible for their financial activities, and governments who are still docked to an old way of approaching financial possibilities cannot accept this.
I already explained in my previous article (Blockchain) what are the benefits and improvements that our society can have from adopting Crypto as a medium of exchange and by using Blockchain technology to have a more transparent and trusted approach to our everyday life.
In the past (not even so long ago), Nations were able to print money according to their gold (or other valuable commodities) holdings. Today the US$ Dollar is the world’s reserve currency, and unfortunately it is not backed by anything. Such a position has been granted by the economic stability of the United States, and the fact that the dollar is still the most liquid form of exchange
But must be noted that countries like China and Russia in the last years have made sure to get far and to strongly oppose this dominance (i.e. Russia prefers to hold Euros instead of Dollars, and China is the first world’s gold producer and buyer and it’s keeping the composition of its foreign exchange reserves as classified information).
What a lot of people do not know is that both countries are accumulating gold in their reserves, and the question that might arise is, with which purpose? Can you imagine a new gold-backed trading standard that will aim to bypass the US dollar?
After asking ourselves these two fundamental questions, we just have to think of the recent events happening around the globe, and try to imagine what will happen if the two countries will really issue a new gold-backed currency with the goal of making themselves independent from the west hegemony. At the moment both Ruble and Yuan are coupled to the dollar, and if both will be able to bypass the Dollar, China and Russia national currencies will manage to gain in value immediately. This implies that the Financial system, as we know it, will never be the same if these plans pass from words to actions.
Let’s focus for a moment on a point of discussion that is behind Crypto and Dollar. The FED is continuing to print money, and hyperinflation seems about to happen, with all its related consequences. What people are doing to hedge this situation is to convert their money into scarce assets that have a limited supply and have the basic property of being deflationary assets (Cryptocurrencies, i.e. Bitcoin). World leaders seem to be forgetting that people will always make their moves/investments/decisions not according to the crypto asset’s intrinsic value, but according to their psychology, to their perception of what is happening around them, and in which way they can bypass the problem and preserve their financial status. People are using technology to their advantage. The four main benefits that people are looking for are: Privacy, Portability, Durability, Safety. All values that cryptocurrencies have already incorporated in their inbred nature.
The final conclusion of this collection of thoughts is that it is clear, everyday more, that the trust in governments is declining, and the fact that cryptocurrencies are not controlled by them is continuing to affirm how crypto and blockchain will have a main role to play in the way the global financial system will evolve.
But in the end the main goal of this article is to push you to think differently, to ask yourselves questions, look for other answers and other resources. And even if sometimes those solutions are not displayed right under your eyes, this doesn’t mean that they are not available.
There is always a different solution, a different approach, it’s up to us to choose it and take control of what is happening around us.
The future is bright, ladies and gentlemen, and it’s just around the bend.
