A question that ponders in most people’s mind but they dare not ask it. As our intuition clearly performs better than our indoctrination or poor state education. Most don’t ask as they are paralysed by fear of the burden of truth.
Unfortunately most of the time that truth reveals itself to be too overwhelming for the masses. But if you are familiar with my previous articles, there are solutions for everything. The question is are you prepared to spend time and research to find them?
To answer this question is no different and yes there is clear answer! So let’s dive in and break it down a little. First of all the question is what is cryptocurrency for? I mention this as it’s important to understand what are the gains or cons to using it just like with any tool or technology. If we are talking about having a currency that benefits the people and is system that is essentially anti corruption that could be a clear answer.
Therefore based on that requirement we need to ask ourselves “how can a currency be for the people and essentially corruption proof?”. This is where I will do my best to explain as simply as possible and not drown you in technical terminology. There are essentially two things that the current fiat monetary system is failing the people on. One of those that is extremely deadly is inflation. Inflation is the root cause for most countries falling into poverty and strife and resulting increased inequality.
You may ask “how does it cause inequality?” the answer is simple and easily proven. Notice how every year the cost of living goes up?. The cost of oil to drive your car for example yet your salary or earnings are not growing by the same amount. Notice how the more you earn the more access you have to financial access to capital?. However surely it doesn’t take much understanding to see that for any financial mechanism to earn more revenue requires initial capital.
Therefore the bottom line is those that already have capital have a significant advantage over those that do not have capital to overcome inflation and in fact avoid it all together. Where as if you do not have capital you will not have access to financial mechanisms to avoid it. In fact you will find that effectively every year you will have to pay average 6 to 12% extra with potentially only 2% increase of salary if you are lucky.
So what type of currency will prevent inflation? A deflationary currency. How do we determine if a currency is deflationary? There must be a fixed max supply. Why is that important? Let’s say we have a new currency of “max”coins. There are 100max coins out there currently and it costs 0.5 max coins to buy milk. If we increase the supply of max to 200. Immediately the cost of milk will be 1 max coin. If you owned 20 max coins already with increased 100 max coins in supply you would need another 20 more to make up for the value.
The other important thing to look out for is the money supply or control of currency managed by one institution or body? Why does that matter you may ask. Well to answer simply, the more singular the responsibility the more liable to corruption it is. Therefore having a decentralised system prevents this. The blockchain technology for example that Bitcoin possesses in fact is a triple ledger to ensure immutability or in other words prevents errors in bookkeeping.
Therefore we don’t have situations like Donald Rumsfeld famous speech of trillions of dollars missing. So is crypto a Trojan horse well that depends if that specific crypto is designed to be for the people or not. Does the digital Yuan or any other central banking digital currency offer those requirements? I find it very revealing why China banned crypto transactions too.
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