Crypto goes up and down, still more secure than fiat

With the recent happenings in the world starting from the authoritarian power grab in Canada to the now war in Ukraine, the financial situation around the world has already been shaken up to a large degree. Even if you are not in the US and the inflation there is not currently affecting you, there will be some sort of a domino effect if the currency which was seen as a world reserve takes a dive. Not to mention the fact that the sanctions on Russia are already negatively effecting the rest of the world since dependency was so high on Russian exports. This could serve as a wakeup call for countries to be more self-reliant and most importantly energy independent but do we really trust our governments to make the right decisions or can we expect things to go similarly to how they have previously played out where people in charge refuse to learn from their mistakes? But putting aside fearmongering and worst case scenarios like a world war 3 or even a nuclear war, other scenarios that are very likely to happen and also quite disastrous should be carefully considered: like the fall of a national currency. What do you do if your country's money won't be worth the paper is printed on anymore? One solution would be to start buying gold as it has always remained a safe haven in cases like this. But gold is not easy to store in larger quantities mainly because it can be stolen. Not only that depending on your country it can be also taken from you by the government with some sort of silly excuse. Then what do you do?  

Crypto is freedom

Now this might sound like a buzz phrase or just a sentimental one, here to express some ambiguous notion but crypto really represents freedom. And we are not the only ones to think so. Many have realized it after what happened in Canada and now with a huge conflict brewing that crypto can offer people freedom in times like this. One of the people who recently expressed their views on this is prince Philip of Serbia and Yugoslavia. He recently talked about bitcoin on a Serbian TV show in which he stated that: "Bitcoin is freedom, and this is something I want for everyone." He also wanted to make it clear that he was not referring to crypto but only to bitcoin. This comes of course of that fact the bitcoin is the most valuable crypto and it will probably remain so for a very long time if nothing serious happens to the crypto community. We still think that bitcoin alone would not be able to offer people the freedom that the prince was talking about. There is a very simple reason for this: monopoly. Bitcoin is already being monopolized to a high degree by just a couple of entities and this situation will probably would not change in the future. This is why other cryptocurrencies are needed in order to have the desired freedom.   

sign that points towards financial freedomethereum, litecoin and bitcoin represent freedom (crypto is freedom) with the message :"be free"

The prince continued to say referring to the freedom offered by bitcoin: "This is something everyone has to learn. They will learn slowly. Some people will not want to learn it because they are not used to it. They want to protect the system that they do well in" and also "But they don’t realize that that system, well maybe they do, is not advantageous to everyone else in the world, so billions of people around the world are not having a good time right now." But as we previously mentioned, it is not bitcoin alone that will achieve this desired freedom. In fact all cryptocurrencies, big or small contribute to some degree to helping people achieve financial freedom by taking their money into their own hands and their hands alone. Just the simple fact that so many alternatives exist to national currencies is a great boon for people that want financial freedom in the future. But of course in the eyes of some crypto being able to give people absolute freedom with their finances is not a good thing. Some us regulators would like to restrict and sanction crypto with means deemed unconstitutional by others. U.S. Senator Elizabeth Warren is maybe just one, of many, who would like to use the war in Ukraine and the fact that some sanctions on Russian people can be avoided with crypto as an excuse to pass a very restrictive bill on companies that operate with crypto and facilitate exchange. She was quoted as saying: "Putin and his cronies can move, store, and hide their wealth using cryptocurrencies, potentially allowing them to evade the historic economic sanctions the U.S. and its partners across the world have levied in response to Russia’s war against Ukraine." Of course, others can read between the lines and realize that this type of law and regulation can and will most definitely be used in the future to control crypto outside of the Ukraine - Russia conflict. There are many precedents of lawmakers using one incident, one conflict to usher draconian laws which will later hurt innocent people. 

Crypto is security 

Unless society at large experience a world-wide disaster which will make internet unavailable of mostly useless, crypto will always be a secure way to hold digital assets with no concern for what happens to traditional currencies. Fiat money can become useless amid increasing inflation; the buying power of traditional currencies could see a downfall that could last decades but crypto will always be there as an alternative. Just this fact alone will drive more people to it. But some people are concerned about getting into the crypto community to late since they only look at bitcoin and not at the entire sea of cryptocurrencies available. One of these people is the billionaire entrepreneur and venture capitalist, Peter Thiel. the co-funder of PayPal who recently stated: "The biggest mistake I made in the last decade was getting too late and too little into bitcoin." Again just because he is only touting bitcoin here, this doesn't mean that other cryptocurrencies are worthless. On the contrary it is because of the advent of other crypto that bitcoin can still go strong and enjoys the current success. And yes it is a success. Despite dropping in value from last year bitcoin as well as other crypto are still in our humble opinion more secure that traditional fiat money. And recent times and the way the economy is going seems to agree with us. People who were betting on the "dollar" as a safe haven in case anything happens to the world economy are probably starting to really regret their choice right about now when the US national currency, and one of the most reliable international currency is showing advanced signs of weakness. Of course the fact that cryptocurrencies have value is not the only reason that crypto represents security. The blockchain technology behind it which makes the entire system of peer-to-peer transactions with no additional interference possible is probably the main reason that we consider crypto to be secure. It makes almighty governments who could easily seize your assets on a whim unable to do so if your money is held in cryptocurrencies. 

image showing the process of crypto trading in a blockchain which makes it secure

 But if we refer back to what the co-funder of PayPal said, is it really to late to get into Bitcoin? It might be if you want to make your profits 100 times greater but that doesn't mean it is to late to profit at all. Some people still believe strongly in choosing bitcoin like the leader of the United People’s Party and member of St. Maarten’s Parliament, Rolando Brison who wants to become the first elected official of the Caribbean to have his salary paid in bitcoin. Considering how volatile crypto still is at the moment this move might shock some people while others might shake their heads in approval. It is amusing how many people still dismiss crypto as something ethereal over the internet that could disappear at any given moment without realizing that most of the things they do and will be doing are and will be on the internet. Their bank accounts could also easily disappear along with their digital identity. Even if you have physical proof for some of the things you own, it today's age a lot of our assets revolve just around the internet with little real paperwork behind. And this trends will only continue as some countries push to create their own digital currency as a response to crypto. Of course this will be no different from fiat money it will just not have a physical counterpart. But it will still have all of the weaknesses of fiat money such as being controlled by a central entity and by the government, thus being susceptible to being seized at any moment should some people in charge feel like it. 

The future of money, both fiat and crypto

Whenever we talk about the future of anything it must be taken with a grain of salt. Also, depending on the subject matter you might need a lot more salt. This is because the future is uncertain for all things and cannot be forthtold. In spite of this it can be predicted to a degree by learning from history, watching trends and understanding human psychology. Just looking at the last one, humans will always seek comfort and security. Even if these feelings might be, from time to time, sprinkled with the desire for conflict in the end, that conflict's purpose if to bring comfort to the people who initiate it. Now, if we take a quick look at the evolution of money we can see a tendency for simplification. First of all the term money itself changed with time because it just means something we attach a certain value to. In the past trading goods directly was the accepted way of using "money" for example exchanging livestock for other type of livestock or for different types of food or perishable, usable materials. But it became increasingly difficult to do so when larger quantities were involved so there was a need for an alternative. Over time this alternative became valuable metals such as gold. But carrying gold on you was also becoming hard for obvious reasons so a way to express that gold into an easier way to carry around was invented and that was paper currency. Then with the advent of the internet and the digital era "plastic" was invented as the ultimate form of trading. All transactions could now be possible with just a simple plastic card. No more encumbrance, easy and simple. Of course as a side evolution of plastic, with the help of the internet transactions could now be made by typing "stuff" on a keyboard. Basically all you need now is the digital in order to purchase and trade. So what would the next step be. After a process becomes easy and accessible people will look at other aspects such as security and freedom. Yes when people find enough comfort there is nothing more that they would like but that comfort to remain secure, in their hands and to have freedom to do what they want with that comfort, when they want. And so the blockchain technology was invented and with it cryptocurrencies appear as the ultimate form of money. 

the history of money or things we attach value to from livestock to gold to other types of coins to paper money. Then the transition to a digital and "plastic" way of trading to finally entirely digital and to cryptocurrencies
So what can we learn from this? We can learn a lot. We can see a pattern and maybe deduce what will happen in the future. Of course we can already see some parts of that future playing our right in front of our eyes with some countries already planning to have a "national digital currency". This may look like a knee-jerk reaction to cryptocurrencies becoming big and being an uncontrolled asset as well as a possible threat to governments that want to have control over people's finances. And for the most part it absolutely can be exactly this. But it can also be a natural evolution of money which was accelerated in some cases because of various factors and interests. Still we cannot deny that the entire evolution of money falls in line with the human psychology and namely their needs, wants and aspirations. So what with will happen to fiat money or traditional currencies? Will they survive or die off and fade into obscurity? Is a third possibility? The most likely answer lies in the third possibility which is that fiat money will just have to "get with the times" and become completely digital, completely discarding any form of physical counterpart. This move might and will probably be met with some resistance as a lot of people still view cash as some sort of security in case anything happens to the internet. of if some authoritative source decides to "freeze" all of your online assets, your only financial means left will be cold, hard cash. However the move will still probably happen as digital only assets in the hands of a central bank and with the government overlooking it makes those assets easier to control so of course governments will want to push for this change.  But just because it goes digital, as we mentioned before, fiat money will still belong to the old centralized system with no real change. 
money becoming digital4 popular cryptocurrencies: ethereum, litecoin, solana and bitcoin
Of course there is also the possibility that national currencies will slowly die off in favor of cryptocurrencies but if this even happens at all it will take a long time and happen after many, many years. If think about the next 20-30 years the most likely scenario will be some sort of coexistence between national currencies, whatever form they might take - digital or not, and cryptocurrencies. Of course the longer these 2 types of currencies coexist the more influential crypto will become since more people will notice the large advantages they have by using crypto. As for exactly which cryptocurrency will be at the top in 20 years it is hard to tell. Yes bitcoin holds the most value at the moment and in a volatile environment it is the most "secure" our of all cryptocurrencies but this could change. First of, just because bitcoin was the first cryptocurrencies that does not mean it is the best. Later cryptocurrencies have better implemented technology behind them and this gap will only continue to grow as the blockchain technology is developed further. This means that one of the other currently available cryptocurrencies could possibly overtake bitcoin at one moment or a new digital coin with some better advantages could come along and turn the tables on all others. But again, looking at trends and learning from the past we can deduce that the use and love of crypto will only increase over time and decrease. This is because it only offers advantages to regular people and no real disadvantage except for its volatility. But this volatility will not last forever. It will slowly become more and more stable. Of course how long this will take is anyone's guess. The one thing to have in mind is the state of both fiat money and cryptocurrencies in the greater picture. I mean yes, crypto is volatile but this means it goes up and down with emphasis on up. And it can do so in the span of a few days or even hours. This may sound scary to some but if you put it in a larger context and compare it to traditional currency which mostly goes down and rarely up you can see how some people still deem crypto more secure. Depending on what country you live in you might only experience a growth in the value of your national currency once every few decades if even then. Most of the time the value will go down, the inflation will raise and people's money will be worth less. Sure there are periods of growth but a lot of the time this will only raise the buying power to previous levels and never above them. This is probably the other major weakness of fiat money aside from being part of a centralized system, namely it's tendency to only go down and recuperate, if it even does so, over large periods of time namely decades. This is why, no matter how volatile crypto may appear to be on the surface, it is still more secure than fiat money. 

1 comment

  • Jennifer Gilbert

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