If we stop and think for a moment, we would question the value of the current banking system and money.
The fact is that banks are getting hacked, the financial crisis is happening over and over again, money is losing its value because of inflation.
If we include all of this, it looks scary, doesn’t it?
What will happen if the financial crash happens again?
What will be a safe store of value?
Do you have some problems with the money you use every day?
Stranger: I’ve got no problem with money apart from not having enough!
Most of the people will give the same answer. The money that is in use today looks perfect at first. But once you dig a little bit, it is clear that we are in a big growing problem.
The only way we can actually use large, specific amounts of money easily, yet allows it to be universally accepted and transacted is to have a trusted storage provider. In other words, banks!
Can we trust banks?
The past showed not only the weakness of banks but the weakness of our whole financial system.
Not once, but numerous times.
It is going to happen again.
Actually, it is happening again. 2020 showed many weaknesses of the current financial system and the only solution is printing more money. In the short term, it helps to bailout economy but in the longterm, it creates an excess of money that further devaluates existing paper bills and weakens the overall economy.
Printing new money helps to a certain extent until the money becomes worthless and new printing doesn’t make an impact.
Then happens what we can see in Venezuela where the national currency lost more than 99% of its prior value. Who is going to guarantee you that the money you have in your pocket today is going to have the same value tomorrow?
What if there is not only the internet of information, what if there is the internet of value?
Some kind of vast global distributed ledger running on millions of computers and available to everybody. Where any kind of asset from money to music could be stored, moved, transacted, exchanged and managed all without powerful intermediaries? Everything would be decided at the beginning and no one will be able to create more than it was defined by the protocol.
Well, in 2008 while the financial industry was crashing, an anonymous person named Satoshi Nakamoto created a paper where he developed the protocol for digital cash called Bitcoin.
The cryptocurrency that enabled people to establish trust and do transactions without the third party.