So you want to know more about cryptocurrencies? Well, I will do my best to share what I have learned so far. Please, bear in mind that I have only been involved with cryptocurrency for two months (as of this post), so I haven’t delved too deeply into all the complexities of the topic.
What Is A Cryptocurrency?
The dictionary definition, according to Google, states a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
That’s a pretty decent place to start. The problem with that definition is that some it doesn’t mention anything about the decentralized nature of the technology. Additionally, central banks have started looking into cryptocurrencies now, and the central banks aren’t the only big names that are interested.
Who Uses Cryptocurrencies?
Everyone. Businesses, governments, banks, mega-corps, grandparents, software developers, investors, and of course, criminals. Don’t let that last one put you off crypto though. criminals also breathe air, drink water, use the internet, drive cars, and spend money. If you want to avoid anything used by criminals, you won’t live longer. Really though, cryptocurrencies seem to have an appeal to every demographic, regardless of race, religion, colour or creed.
In more specific terms though here are a few of the big names investing into the technology that supports cryptocurrencies:
Goldman Sachs, Australia Post, the Bank of England, the United States Postal Service, the Commonwealth Bank of Australia, ANZ, Cisco, Wells-Fargo, IBM, Richard Branson, Tim Berners-Lee, Vint Cerf, AXA, Nasdaq
Why Cryptocurrencies Matter
There are some who believe we need cryptocurrencies because the governments are owned and run by the central banks. For an example, watch the video below.
Ignoring the extremist, tin-foil hat conspiracies, and focusing on the facts of the video, you get to the crux of why cryptocurrencies matter. The companies I mentioned above are investing in to cryptocurrencies because they want in on what will become the future of finance. It may not happen in my life-time, or The Geekling’s but it will happen. Bank issued money (fiat) will fail. We will either swap back to a gold based monetary system, or adopt a technology based system. Why? Because fiat favours the rich.
If you and I, those without inherited wealth, decide to stop using fiat, and move our wealth to a system that can’t be tracked, taxed, controlled, or manipulated, the rich lose.
Right now, I have an undisclosed amount of wealth in cryptocurrencies. I can use that to buy goods or pay for services. I can transfer it to friends and family. If I do it correctly without exposing any details about myself, I won’t be identified. There would be no way to tie that wealth to me, yet I would be in full control of it. How can you tax something without knowing who owes taxes? How can you control something when every person in the world has the potential to influence the system? You can’t. And that is why cryptocurrency matters. It puts the people back in control of their finances.
Well, that’s it for part one in this series. I have written part two and scheduled it for publication early next week.