For a long time, many in the cryptocurrency world discussed the idea of a "new financial system". It is obvious the present one is not working for most people. With each passing year, wealth inequality grows, putting more resources in the hands of fewer people.
Bitcoin was created to be an electronic, peer-to-peer payment system. While it still has that attribute, it is evolving into something much more important.
The recent interest in Bitcoin is starting to awaken the financial community to the potential of what is developing. These moves are going to be a part of a larger strategy that puts Bitcoin as the center of what is evolving.
Many have called it "digital gold". This is accurate if we are focusing solely as a store of value. It is believe that a good target price for the market cap of BTC is the $7-$9 trillion that gold already occupies.
However, this is likely just the beginning. Many are starting to speculate the impact of Bitcoin on markets such as bonds and real estate. When we factor these in, we are looking at hundreds of trillions of dollars in value.
Bitcoin might end up being the foundation upon which all else is built upon. The store of value could evolved into a collateralized asset from which derivatives spring forth. Our entire debt system is, ultimately, built upon nothing but people's faith in government and currency. With Bitcoin, it would be a hard asset underlying it all.
Of course, this is not the only game in town. There are thousands of cryptocurrencies, all focusing upon different use cases. Bitcoin was originally slated as "the people's money". Due to its scarcity, this is not going to be the case. With Wall Street starting to dip its toe in, we can already foresee where this is going.
Bitcoin will ultimately be in the possession of Wall Street and governments. Those with the big money will eventually end up with it.
That is only a piece of the puzzle. Other cryptocurrencies such as Ethereum are also going to fill many voids. The global custody system, for example, is worth more than $20 trillion. Here again, we see the ability to move trust away from 3rd party entities and onto a decentralized blockchain.
As the integrated network of blockchains is built out, people will be interacting using many different tokens. The monopolistic control of currency creation is ending. No longer is it in the hands of governments/central banks. In the near future we will see the shift towards the tokenization of most everything.
Bitcoin is amazing, albeit outdated, technology. It is far superior to the system that is in place now. Of course, the technology that evolved since Bitcoin was introduced has surpassed it. That is why this entire premise is evolving. Different facets are being addressed.
This is not going to be a "winner take all" type of situation. Most tokens that have development behind them will have their place. Naturally, the use case for many will be quite isolated, affecting their usage as well as the value. Nevertheless, when we look at the collective, we see the entire system operating in a more inclusive way.
It is due to the decentralized nature of the entire industry that makes it more resilient than anything we presently see from the existing financial model. While it is possible to point to any one blockchain or project and note how centralized it is, when we step back, we see how wide things are spread.
And it is only expanding.
Each day, more tokens are distributed. There are whales in many different projects, most of them not overlapping. The Bitcoin whales are not the same as Ethereum; who differ from EOS or Cardano. All the way through the system, we see people holding different tokens, thus having wealth spread out. For now, it is still a rather small number of people involved but it is growing at a fantastic rate.
The financial innovation is just getting started. When we look at how large it truly is, we see the numbers can get enormous. Tokenization is a way for all across the globe to tap into it. The days of the under and unbanked are going to come to an end.
Politics is rapidly being removed from the equation. It is too easy for corrupt or inept governments to destroy their currencies, thus imprisoning their entire population. This ends up favoring the debt holders who are able to "foreclose" when things get dire enough. Often, national populations are further enslaved through debt agreements reached with international banks to alleviate the problems created by said governments.
Cryptocurrency is quickly expanding, to the point where it is close to being outside the control of any government. It is likely that they all could unite together and put a stop to it, but it would require 100% agreement. Since we are in such a divided world, the likelihood of that happening is nil.
If it is even possible, which is debatable, another year or two of development will put this thing out of reach. Bitcoin is starting to enter the vaults of the traditional financial institutions. We are already starting to see funds created that are using Bitcoin and other cryptocurrencies. Ultimately, trillions in derivatives will be built upon the major cryptocurrencies, further cementing it as a central component of the financial system.
At the same time, hundreds of other smaller funds are being created around the world by people, following the same model. This is mirroring what Wall Street does but enabling average people to get involved. This is a radical difference from the process as it operates now.
The advantage that cryptocurrency has is that, at its core, it is information. It truly is nothing more than data. This leads some to believe that it does not have value yet, as we are learning, data has enormous value in a digitized world.
Another benefit is information yearns to be free. It expands and grows. As more information becomes available, we are able to improve our processes even more. The world keeps advancing as the information basis grows.
Cryptocurrency is aligned with this. It is not something standing on its own. This is all part of a larger process that is taking place.
It is a component that many miss.
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