Note- Credit author is Kian Arad Sheik
On a day-to-day basis, we use currencies known as fiat currencies. Currencies such as USD used to be backed by gold and silver, but over time they just started to carry value by right of “just is”.
We have become so accustomed to the system of just giving paper value that when there are massive market shifts due to the Fed making an announcement, we don’t suddenly divest all of our funds. We trust in the currency.
Interestingly, the word trust can be found all over our currency. This subliminal messaging we see from birth plays a role in our association with trust and the USD.
Trust plays an essential role in maintaining a currency’s value. A currency must have regular transaction volume, high market caps, and it must be practical to use. Post-WWI Germany felt the effects of a weak currency. It became so impractical to purchase goods with German Marks that people burned it for warmth instead.
In recent years, countries which have incurred international sanctions such as Iran have seen an increase in Bitcoin use for day-to-day shopping necessities because it’s more reliable than the Rial ($1 = 32,425.42 rial atm).
With the advent of cryptocurrencies, it is not necessary to get your information on the market from an all-powerful, single source that may piss someone off because they feel like it without regards to your livelihood.
Cryptocurrencies generally run on blockchain technology, meaning everything that happens in the network must be available for all the network to see. Bitcoin was the first and is currently the strongest, but it has only opened our eyes to the possibilities of this new avenue of transactions.
Developers and investors have been coming together to craft specific platforms for their needs and this is exactly what consumers need to start adopting this new form of payment. Coins like Monero tout anonymity. Ethereum has given us a more automated and productive blockchain network with a sea of possibilities for running decentralizes apps. Dash was made to solve the issues of slow bitcoin transactions. Dogecoin’s value rose and fell as the popularity of a meme would. We are even seeing coins for industry specific transactions arrive such as the TOKES platform, which seeks to remove the necessity of fiat from the budding cannabis industry entirely.
As cryptocurrencies evolve and gain more public trust, the choices over which currencies to use and why will ultimately affect their values; a coin’s true practicality will give it inherent value. This gives us much more freedom with our transactions, while at the same time introducing many rabbit holes and regulations which must be crafted so as to not hinder the underlying practicality of the blockchain.
No longer must our assets be tied to the actions of the countries in which we live. Cryptocurrencies are not just another form of fiat, they allow consumers to value the process of the transaction. If you don’t like a currency’s features, you don’t have to give it value. This coming age in economic history will become the Democratization of Coinage, and it’s very important that you start casting your votes now.