“When you concentrate power in the hands of the few, there is a possibility that they will abuse that power” There’s a reason to believe in the saying “ Absolute Power Corrupts Absolutely.” That’s what banks have been doing all this time. What if everyone withdraws their cash all at once at one point in time? What will be the scenario, can you imagine? Perhaps, I see you vividly imagining the same, and I bet you resonated with a total collapse of the economic system. Indeed, that’s true! Most banks just go on printing currencies in the name of all the technicalities by jargonizing concepts through Quantitative Easing or inflation control, or anything that they wish to justify as per their whims and fancies without backing them up with enough collaterals.
Which brings us to ask, do we have control over our own money? I bet you do not after the 2008 global meltdown, where the power of printing currencies and extending loans were grossly misjudged by a few institutions whom you trusted so much. That brings us to ask one thing, how do we deal with that. I believe the Gold Standards made so much sense and it was removed for a reason. But everything that is exploitative eventually redeems itself in one way or another, and we get to know that by Satoshi Nakamoto’s white-paper that took the world economy by storm in 2008.
There’s a reason to believe why he preferred to keep himself anonymous, perhaps, to avoid the witch-hunting that happened with an individual in 1998 when he minted tokens of exchange in gold and sponsored it for use in his neighbourhood. What did he earn in return? A jail term of 20 years. That’s the threat the centralized financial system started to foresee. But blockchain-based cryptocurrencies have completely taken the power-game away from just a few players like the Fed and Reserve Banks and empowered everyone to take control of their finances. A digital asset immune to taxation, political upheavals, regulations, and other controls could envisage a better economic future. Therefore, if someone says that blockchain and cryptocurrencies have redefined the power-sum game in economics, it wouldn’t be wrong after all.
Do We See Bitcoin as The Annihilator of Centralized Currencies/Fiat Money?
A few use-cases would make you believe that cryptocurrencies have got a lot to cover ever since they have moved from the adoption stage to evolutionary and after their entry into the revolution stage at present, there’s no stopping on the cards.
Top Use Cases To Justify Cryptocurrencies Could Set Up a New World Order in Economics
Digital Fiat On The Rise
Have you ever resonated with higher transaction fees when you have to transfer a $200 bill from the US to India? I bet you haven’t. Whether you take the help of Western Union, PayPal, Swift Transfer, or anything you can think of, an average 5% to 8% transaction fees would diminish your dollar value, and 5 to 6 days of settlement further exacerbate the situation. Do we see the same with cryptocurrencies? Indeed, not! Instant settlement anywhere and the launch of Bitcoin fork, Bitcoin Cash has empowered smaller transaction processing to replace the use of fiat currencies for remittance. Most of the African countries prefer cryptocurrencies due to the high volatility rate and inflation they face against the use of fiat currencies.
Anyone can mint their own tokens and use it for the exchange using the smart contracts. A few of the cases of smart-contract bugs with the fall of projects like YAM have restored trust back to Bitcoin, which has gained significant traction this fall season. Most have vouched for Bitcoin to be a more programmable solution for greater transparency, trust, and security. Simple Ledger Protocol introduced by Bitcoin Cash Network has further improved the minting of sub-tokens using the opcodes.
Roughly 2 billion population have not been well wired to the banking system. They face a lot of challenges to enter the system because of stricter KYC procedures and very low-interest rates on savings discouraging investments. Cryptocurrencies lending in the form of DeFi or decentralized financing has opened doors for better financial inclusion for everyone across the globe. Over 200 successful DeFi projects have been launched in 2020 with the likes of MakerDAO, Synthetic, AAVE, Compound driving lending, and Yield Farming trends as great ways to earn money. Many individuals have been driven by APY (Annualized Interest Per Year Yield) as a great way to earn consistent regular returns in a coronavirus struck-market.
On-chain voting has the power to bring more trust back to the community and POS or Proof of Stake consensus algorithm has given a new way to save a lot of computing power and validate blocks much faster than proof-of-work by staking cryptocurrencies. The community is using Dapp to sponsor or support a change and they are staking their cryptocurrencies as a back-up or pledge to withstand fraud. This has brought greater trust among the community and faster transaction processing, envisaging scalability in future operations.
Cryptocurrencies have gone past from being just a value of exchange to a value of ownership. Who would ever forget the crypto-kitties, where you get one unique NFT or Non-fungible Token safeguarding the printing of a unique kitten that you have. ERC standard 721 smart-contracts have empowered protecting copyrights, arts, and other intellectual property rights, further diversifying the use-cases of cryptocurrencies as it races past the adoption curve.
Cryptocurrencies are maturing thick and fast and 10 years down the line, as we see greater blockchain adoption, the use cases will further widen touching upon various segments to envisage the complete digital transformation and dominance of blockchain technology-empowered digital assets.