The Beginning of the Crypto Revolution
Why is crypto a revolution? Cyberpunk cryptographers have been trying create digital gold. That is to say they wanted to copy the idea of a gold standard. However they wanted to make it fully digital.
The reason for this is because cryptographers wanted a form of money that could not be corrupted by governments. Unfortunately gold standards are still prone to be manipulated so cryptographers set about producing the hardest money in history.
Bitcoin is not a stagnant network with currency sitting on it. It incentivises whoever wants to take part in the network and contributing. In fact miners receive rewards for mining Bitcoin to bring into circulation into the network. Additionally they approve transactions on the blockchain.
Without this incentive Bitcoin would have taken off like it did. So touché to Satoshi Nakamoto the cryptographer/s that made Bitcoin.
The Crypto Revolution Cascade
Although not many people knew about Bitcoin initially, word started spreading. Bitcoin set off a cascade and inspired people to take part in one way or another. People had a choice whether to take part in mining, buying Bitcoin becoming a Bitcoin developer or supporting the network in any other way.
Some decided to create their own cryptocurrency. In 13 short years since Bitcoins inception there are over 10,000 plus cryptocurrencies that were created. You can look where the world checks the cryptocurrencies here on CoinMarketCap to see the updated numbers.
The Next Phase in the Crypto Revolution
Only a small amount of cryptocurrencies in existence have good use cases. Most will fail for one reason or another, but this is not to say cryptocurrencies are a failure. Far from it. In fact, there is even a growing industry in cryptocurrency merchandise.
However you will always find the naysayers. Like for example those that said the automobile will never take over from the horse and buggy. Or those that said the internet will never take off.
Daily Mail 5th December 2000 article. Sourced from a Filippo Lorenzin’s twitter account
Nostalgia for Past Assets
Most people in general have trouble envisioning change. They are nostalgic as well, they look back in the past much like they are doing with gold.
Gold enthusiasts say there is no place for Bitcoin or any other cryptocurrency. In fact there are heated debates of Bitcoin vs gold. There is also a lot of FUD (fear, uncertainty and doubt) most Bitcoin FUD that spreads to stop crypto adoption.
What is the Crypto Revolution About?
The truth is that cryptocurrency is the next generation of internet or the internet 2.0. A better more immersive internet that will be a more seamless part of our lives. Ever heard of the metaverse? You can have a look to understand what is the metaverse here.
In the meantime skip to the 2 minute mark in this video to get a small taster of the metaverse:
The crypto revolution is also going to be a giant leap forward in terms of banking. The banking industry traditionally takes decades to respond to change. Be it whether it is client expectations or technology.
This is in contrast to the technology industry that adapts to change roughly every 3 years. The technology industry has made great strides in innovation that has impacted all sorts of industries not just its own. It was only a matter of time that technological innovation was going to weasel its way into banking. The beauty of blockchain technology as implemented by cryptocurrencies is that they provide a number of benefits.
If we take Bitcoin as an example, it removes any third parties out of the equation. It is fully peer-to-peer where there is no custodian like a bank to monitor transactions. The blockchain does everything instead. All you need to do is make the payment. It is secure and the network is open to anyone that would like to take part making it a democratic system.
The crypto revolution is going to transform banking and make it much more efficient.
That is not to mention decentralised finance or DeFi for short. DeFi is everything the traditional banking system offers, but on new blockchain rails.
The applications or dapps (decentralised applications) being built are to facilitate:
- Collective investments
- Asset management
- Payment systems
- Lending and borrowing
Back on 3rd August 2017 DeFi had $4 total investment into it. As of 11th June 2021 it has increased to an astounding $59.64 billion of total value locked.
Sourced from DeFi Pulse
Banking the unbanked
The western world takes this sort of thing for granted. There are 1.7 billion adults were unbanked in 2020. The are several reasons for this. However if barriers to entry are easier or there was an incentive to become banked the situation would quickly change.
It is important to emphasise that without proper banking facilities people are left behind. Access to banking would enable better trade and expand parties with whom people trade with. DeFi would enable their access to all other dapp services. Additionally it would be cost effective, faster and more convenient.
Most of the unbanked have mobile phones. As a result it would be easy for them to sign up and have access to their crypto 24/7. They would also have access to other services in the palm of their hand.
What Stage is the Crypto revolution At?
The stage is set for Bitcoin to have 1 billion users in the next 4 years.
Sourced from Nasdaq.
This remarkable chart is the way we will conclude this post. It shows the point where we find ourselves on the timeline. There is a lot more progress to be made and the future is looking bright.
Part 2 of this blog post is about what is driving the crypto revolution.