Whatever the future of the means of payment, the fact is: we cannot ignore that cryptocurrencies have changed the way we relate to money. Even today, most people live their lives with eyes on the world of the past, but we need to keep in mind that significant changes on primary issues, such as, for example, the understanding of money, what we call “generational changes”, lead more time to be widely accepted and understood.
Going back a bit in history, in 1971, Richard Nixon, president of the United States, broke the Bretton Woods Agreement, which ended the convertibility of the US dollar to gold, making the currency no longer “backed” by an existing amount of gold . This means that the value of dollars in the world has come to be controlled by the American government. This was, in fact, a generational change. Most people, however, still believe that the government has some value in providing the “ballast” of the currency.
As in the USA, Brazil also does not have a “guarantee” for issuing Reais. However, in several presentations to groups of investors, investment funds, and closest people, the question “Where is the Bitcoin ballast?” it’s accurate. My response has always been based on the end of the Bretton Woods Agreement. After all, where is the ballast of the Dollar or the Real? ”.
The answers following my question have always been aggressive or conclusive. Some put their hands on the fire saying that oil was the basis of the dollar’s value, while others practically expelled me from the room for “poking” their knowledge of the financial system. The few who let me continue my explanation, are today my investors or friends who have some value invested in cryptocurrencies. And why do I tell this story?
Before we can see Bitcoin as a big differentiator, however, we need to understand the real differential created by banks during this era. In recent years, services such as payments and transfers passed to the palm of the hand with security and agility.
However, we need to remember that this facility is not free. Banks earn money trucks with transfer fees, account maintenance, and payments, and use amounts in loans to other customers (which means lending money they don’t have). That is, the bank is playing against the customer.
But two new fronts have emerged to shock and question this system: digital banks and cryptocurrencies. In addition to the reduction of fees and ease of services, Bitcoin went beyond digital banks, starting from even more transformative premises.
In “Bitcoin: a Peer-to-Peer Electronic Cash System”, White Paper by the alias of Satoshi Nakamoto, we had the first description of a robust enough structure that would be able to solve the challenges created by the breach of the Bretton Woods Agreement, that is, creating an automated “issue” system of currency (and the currency itself), with mechanisms of natural scarcity that preserve or increase its value over time and, if accepted on a scale, greater security in its mechanism than the banks themselves would be able one day to supply and an infinitely lower cost for system users.
Yes, something completely insane and far from understandable in five minutes, as well as all generational changes. The structure that makes up Bitcoin was created based on Economy and Technology. We now have a monetary system based on algorithms and that solves problems of security, scalability, and authenticity of transactions, using the highest level of knowledge of encryption technologies and systems security.
Since 2008, Bitcoin has had a total market value of approximately 170 billion dollars. Cryptocurrency is already a reality. And it is so real that the central banks of several countries are discussing their own digital currencies in a blockchain-based structure. Bitcoin has also become a popular trading commodity, explaining why leading trading sites categorize it as a popular trading commodity.
In this way, governments will be able to control the issuance of money and provide access to financial institutions in a simpler and cheaper way. Not to mention that, when digitizing money in this way, all financial transactions are monitored by the government. That is, using the technology and scalability benefits behind Bitcoin, but with very different purposes.
So…what’s the future of Bitcoin and other cryptocurrencies? Maybe the future lies in our efforts to find the ways we can improve people’s lives with technology. Find more information on bitcoin trading platforms on https://learnbonds.com/bitcoin-robot/bitcoin-system/.