The revolutionaries of the crypto revolution we are witnessing, which emerged with the advent of Bitcoin in mid-2009, which spawned its idea from the use of tokens in video games, claim to have invented a new kind of money.
It is free from the pressure of bureaucracy, regulations, faster, easier, and safer to use, which will finally solve the status quo in the financial markets.
As a reminder, virtual money was then used on Silk Road, a black market on the dark web that was shut down in 2013.
The beginnings of digital currency
If we look at the whole picture realistically, without leaning towards “modern views” or critical forums, the beginnings of digital currency go back to the E-gold coin that operated under Gold & Silver reserve Inc, which allowed users to open accounts on their site and trade this coin tied to grams of gold.
The e-gold system was launched back in 1996 and reached 5 million users by 2009 when their business was shut down due to “legal difficulties” and the closure of the site by the FBI.
Their business originated two years before the advent of PayPal, and in 1999 the Financial Times wrote that it was the only electronic currency to reach critical mass online.
At their peak, in 2006, they processed as much as $2 trillion in transactions a year.
For the sake of comparison, the largest and most serious exchange office Mt.Gox from Tokyo was founded only in July 2010, and by the end of 2013 it handled over 70% of all BTCs.
We exchange goods and services around the world with money, and today we increasingly see the tendency to set the value of people and societies through the prism of how much they have, how much they are worth through it, or how much they created a bubble of untouchability around them with money.
This second tendency has caused millennials to need as much money as possible, and not its use-value.
The very fact that you “own” money anywhere on the network on any wallet, and even the fact that you will most likely earn it through speculative expected actions in the future, buys you status in the modern society of social networks and digital reality.
The idea of new money
And yet, money, according to traditional understandings, is nothing but a piece of paper that goes from hand to hand and starts the circulation of consumption.
Its value is that it was created in order to have a single unit of account that we trade, without carrying bags of gold and silver behind our belts.
For this to be possible, money needs to have a stable value that comes from a local basket of goods and services, controlled by monetary regulators that can expand or reduce consumption in line with market developments and thus contribute to maintaining stability.
The idea of new money seems to go hand in hand with a revolutionary fight against BIG Tech companies, or perhaps it is better to say against an orderly financial system.
As a paradigm, at the same time, we have examples that all companies belonging to Big Tech are trying to make their own coins, e.g. like Diem, ex -Libre by Facebook.
The only logical answer that arises is the assumption that they also want to use the characteristic of essentially all cryptocurrencies, and that is that they are made in such a way that the inflation rate cannot be controlled and we don’t have inflation until all the coins are mined.
If we look over our shoulders at the events of history, so far revolutions have brought some new technology or defense of principles and attitudes expressed through the demands of revolutionaries.
The idea of ”modernizing money” is not new, in 1827 Josiah Warner opened the Cincinnati Time Store, where he sold goods in exchange for bills of exchange expressed in the number of working hours he exchanged paper money.
Two years later, Robert Owen, known as the creator of the idea of socialism, tried to establish an exchange office in London related to working hours and thus avoid money based on silver or gold and replace it with what no one can take away, and everyone has it, their time to work to create new value.
His idea, like Warner’s, soon failed. The biggest attempt to eliminate money and its use were within the communist ideology, which wanted the self-consciousness of each individual to be raised to the level of giving their maximum work possibilities, and the consumer behaves satisfying basic needs, without the need for luxury.
No communist country has ever managed to extort money and its existence. Even today, we are witnessing economies that are still struggling with the consequences of another failed experiment.
Crypto bubble burst
The logical question is whether this is in fact a revolution against the greatest levers of power of the capitalist system.
Can cryptocurrency cause the collapse of the monetary systems of large countries? For example, the United States?
All BigTech companies operate in the largest states. The United States has the most rigorous money tracking control, the most complex banking system, and transaction operations.
We hear rumors about high inflation and how it will destroy the dollar, without considering the real economic possibilities of US indebtedness, which could freely borrow up to 250% of its GDP and only then reach the level of indebtedness of more than half of the world’s countries.
It is more realistic to expect that cryptocurrencies, contrary to the revolutionary message, will destroy the monetary systems of small, underdeveloped, and poor countries, where such a bursting of the “crypto bubble”, which must occur, will lead to hunger and general poverty.
Is it a reality for us to give these small, impoverished countries of Africa, the Philippines, and other countries of the poor world play-to-earn NFT games, as one of the fastest-growing subcategories of NFT so that by playing games they have the opportunity to earn a living?
Creating speculative value
Cryptocurrencies contain destructive parts of technologies that actually create the greatest danger to an orderly society by mixing blockchain technology with social media in order to create speculative values of new capital that would affect securities.
Everyone from the world of crypts will tell us about many advantages, especially in the field of private blockchains, but they must also clearly and unequivocally acknowledge the moral risks that we must become aware of.
They must recognize the emergence of the so-called Ponzi Scheme, which drew worldwide attention to Tyler Moor, Jie Han, and Richard Clayton, professors at Wellesley College and the University of Cambridge, as a modern financial scam that brings huge profits using the money of new investors.
To try to get closer, the first “sophisticated” investors are aware of fraudulent actions and invest money hoping for a profit from the money of future investors, aware that those who enter the investment last will bear the consequences of the loss from which they will profit.
Is the idea of buying various NFTs and their unrealistic values a little closer to us now?
In order to understand how much this idea is not in line with other world trends and protections of freedoms and rights of each individual, ie. libertarian ideas for a better life in a better environment, I must pay attention to another fact.
All the largest blockchains work on a proof of work protocol that requires huge amounts of budget and thus uses huge amounts of electricity, to achieve its basic purpose – to operate on a large scale. This creates a huge amount of carbon footprint.
The laws of supply and demand dictate that the value of each currency is determined by the amount of energy consumed in its production, so today we have an example that the largest diggers and miners in Kazakhstan due to the cheapest electricity prices, and that in the last six months EU countries and countries around the world have banned cryptocurrency mining.
Also, revolutionaries often state the need for increased speeds and expected habits of modern society for fast data processing, and the essence is that blockchain technology is not so fast in terms of transaction speed, Bitcoin can process 3 to 7 transactions per second while e.g. Visa processes about 20,000 transactions per second.
Is it the obligation of every individual to protect the future of humanity and raise red flags when he notices the irrational behavior of society? I think it is.
We must be aware that although a veil of mysticism has been lifted around cryptocurrencies and the whole community for most who are not in the world of crypto, programming, or blockchain, we clearly see energy consumption that does not bring new use-value, building fraudulent schemes your savings, assets or future earnings. And why?
To become part of an imaginary, in which they carry a sense of greater freedom because they will function outside monetary and state institutions and have a great chance to earn or at least save their property from future inflation that they whisper about from all sides.