Current Events > Sad's Weekly Crypto Blog topic

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It's no secret that I'm obsessed with crypto. The bitcoin has already changed the world and the technology behind it will soon revolutionize the world as we know it. I feel this is a "must know" type of information for everyone so what better way to do it then to do a series of write ups? I can strengthen my own understanding (feel free to correct or lambast, it'll all help in the long run) and hopefully generate a discussion and garner more interest on the subject.

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Introduction - The case for Crypto

We are now entering the new decade, 2020 and blockchain adoption is about to kick up and completely revolutionize the world as we know it. Even if you think crypto or bitcoin is a scam, it's not going to go away and it will only keep growing its community and impact in the world. The question is why? Let's start with the bitcoin.

What will forever allow the bitcoin to maintain its superiority among all other crypto is:

1) being decentralized, where no one central entity controls the network
2) Has a limited supply of 21 million bitcoins that can ever exist (we are up to around 18 million at the moment in circulation)
3) Borderless, in that you can trade bitcoin from anywhere in the world
4) Transactions takes minutes and cost pennies to trade bitcoin, which is a big deal for the remittances industry where it costs dollars and takes days to send money to relatives in another country.
5) 1st mover advantage, this is the godfather of crypto and has built up trust of a growing industry over the past decade to become the most secure network.

Why are these traits so important? Let's compare it to the US dollar. Thanks to the Nixon Shock in the 1960s, the US dollar was forced to go off the gold standard as other countries were demanding the US allow said countries trade in their US dollars (which was at the time, and still is used as the world reserve currency) for gold, which was pegged to $35 per ounce as per the agreement from the Bretton Woods system. The US at the time didn't have the gold reserves to back up the amount of US dollars in circulation and as such, either had to call off the dollar/gold ratio or devalue the dollar. They chose to the former. This was the precursor to the US setting up an agreement with Saudi Arabia to do oil trades using the US currency, the Petro dollar! Thus giving countries a reason to stock back up US dollars and the US dollar can maintain its status as the world reserve currency. With this privilege, the US is has massive influence on the banking system where they can enforce embargoes on countries and big banks where should a bank decide to business with a country like Iran, the US could get away with fining the bank with a several BILLION dollar fee. And they have no choice to pay it because if they want to do business in the banking world. The other privilege is that there's nothing stopping the Federal Reserve from printing out US dollars whenever they want and so they do just that. If they want $100, they print it out. If any other country wants $100, they better fork up $100 worth or goods and/or services. And Federal Reserve very well abuses this privilege, much to the frustration and annoyance of the rest of the world.

This background information is important to understand just what gives a currency its value. Any country that decides they don't want partake in the US dollar ecosystem in some way is heavily restricted in economic gain. Any country that seeks to replace the US dollar as a US reserve currency is an immediate threat to our sovereignty and the most vulnerable and targeted point of the US dollar is attempting to create a currency to trade oil in. This is a primary factor on the conflicts we've seen in the Middle East over the past couple decades. Here now, we have the bitcoin which doesn't have any single point of authority, yet allows people to COMPLETELY BYPASS the banking system, where someone in Cuba or Iran can do business with an Amazon seller with crypto. As I've said before, banks have been fined billions of dollars for doing any kind of transactions with embargoed countries so this is a major boon. This is a danger to the US soveriegnty while being an incredible boon to leveling the playing field for all countries. Russia and China have recognized this as they've been reported to be heavily investigating cryptocurrencies, especially the bitcoin. For the average joe, citizens in countries with unstable economies such as Venezuela and Argentina, they have been using bitcoin network to hedge their wealth and receive money from US bound relatives to avoid high fees imposed by the government.

There are a phenomenal amount of use cases for crypto and this is just the tip of the iceberg. The key to all this is understanding the problems that are occurring right now in our financial system and what the goals of these projects.

Part 2, next week.

Disclaimer: I may be positive of the bitcoin's future but I own no bitcoin. If you take these series of posts as investment advice, I am not responsible for any loss of money.

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Bump so this doesn't die on me and I don't have to create a new topic.

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