We are led to believe that government money is the only game in town. In fact, it is drummed into us to the point where most of us feel that the government is the only one who can create money.
Naturally, this was not always the case and money has taken on different forms over the years.
One of the biggest roles money plays is that it replaces barter, allowing for an easier exchange of goods and services. Obviously, it has other attributes but facilitating transactions is at the top of the list.
With cryptocurrency, there are many who dispute whether it can be money or not. We know the mainstream has claimed it is nothing of value. Nevertheless, the expansion of the industry proceeds forward.
Whether cryptocurrency can be money or not, the bottom line is that it can facilitate transactions. We have seen this repeatedly. Thus, as a currency, it works very well.
The introduction of Bitcoin was groundbreaking in the sense it offered up the ability to monetize peer-to-peer transactions. Being immersed in a digital world, a fact that is only growing with each passing year, this was a welcomed innovation.
However, alternative currencies are nothing new. Cooperatives have operated for a long time. These types of currencies existed for more than a thousand years, with great success.
Even today, we see some very powerful currencies that are not central bank based. They provide a valuable service to the community. Essentially, they work in conjunction with the government money.
Another aspect to this is the scope of coverage. Whereas traditional fiat can be used over a large geographic area, even internationally, cooperative money is localized. It pertains to some type of group whether it be a union, small town, or association.
One of the most successful currencies of this type is the WIR. It is why many believe the Swiss economy is one of the most stable in the world. For the past 80 years, this currency was used by businesses to create credit and facilitate transactions.
Obviously, the WIR is geographically based. Cryptocurrency offers a major difference in the fact that it is network based. The currency is not tied to any particular physical location. Instead, the community that it serves resides in the virtual world. The common threat that brings them all together is wide and varied. Essentially, it is based around an ideal or subject as opposed to a geographic locations.
It is rather evident that fiat is "scarcity" money. Each unit created is a debt instrument which requires interest to be paid. Thus, there is never enough money to cover what is outstanding. In other words, if the Federal Reserve, as an example, took all the USD out of circulation, there still would be the interest on the money owed. There is not enough to pay back all the money plus the interest. This is why bankruptcies take place. Those who are adept at taking more of the pie are able to pay the interest while the rest are left to die.
Cryptocurrency is more in line with the traditional cooperative money. There is no interest paid on each unit created. When a new HIVE is "minted", there is not a debt owed back to the blockchain. The ecosystem does not have to pay back 2% of what was created.
For this reason, while most focus upon inflation, the true weakness in the present financial system is the interest tied to money. The fact that it is born as debt, flowing through the banks, is what causes much of the mess we see.
We will not see this same thing happen with cryptocurrency. Unlike the fiat world, where the is never enough money, with cryptocurrency that issued is removed. We can, collectively, create as much currency as is needed. Everyone will have the ability to facilitate transactions. At the same time, we can tokenize anything that comes to mind.
The major question will be who is using what currency? The Swiss WIR is very successful yet most of the world does not use it. This currency does not rival the USD nor is it designed to. The purpose is served within the borders of Switzerland where the benefit is felt.
Abundance enters the picture when we shift into the digital world. While there are limitations with cooperative currencies that operate in specific areas, in the virtual world, we can go anywhere. Everything is right at our finger tips. Instead of operating in one or two currencies, we already see the possibility to interact in hundreds. A wallet and a key is all that is required to be a part of that network.
We are seeing the digitization of an age old idea that was very successful over the centuries. Cryptocurrency does not have to prove itself since there is already a long history of cooperative success. In fact, if we look at the time involved, it is actually the present fiat system that is still in its "trial run".
Bitcoin was called the "People's Money". This is true for all cryptocurrency. Any currency out there is designed by, and for, individuals. How many use each particular currency is the only question. Some will be used by hundreds of millions while others by only a couple of people.
Either way, we can reward people and provide incentive for any activity we desire.
This is something that is missing from the present economic system.
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Posted Using LeoFinance