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Does the world need crypto? Part 1: Decentralization - Crypto in Plain English - Episode 121 - by cryptohunt.it
Does the world need crypto? Part 1: Decentralization
Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.
The reason Bitcoin exists in the first place is widely assumed to be Satoshi Nakamoto’s disagreement with fiscal policies around the 2008 crash.
This week, let's have a brief look at history and the discussions around crypto: Is it really necessary?
The 2008 crash was a direct consequence of big banks placing increasingly risky bets on ever rising housing prices. When the bubble popped, most of them got bailed out by governments which printed massive amounts of money to do so, causing inflation.
Many people were unhappy with this; they found it unfair that these banks would get saved at the expense of everyone else; after all they caused the mess.
Bitcoin attempted to change the game by creating a system of money that is decentralized, meaning no single player has the power to change it. It, in fact, was even built to be deflationary: There can never be more than 21 million Bitcoins, meaning nobody can print it.
But do we really need such a self-policing system?
Critics will argue that governments' ability to react to market conditions is a great thing. This way we can proactively step in and help the economy.
And they will rightfully argue that we have replaced something simple and effective - a centralized system, with something complicated that only insiders understand. While a company like VISA can run the world’s payments out of a single data center, we burn through a household's energy just for a few Bitcoin transactions.
You see, what it comes down to is this: Do you think the financial system as it is has been serving society well? Or do you think power should shift away from governments and big corporations so everyone can participate at their own risk?
Next time we'll look into those questions in more depth. Until then – happy learning!
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.
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By cryptohunt
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Does the world need crypto? Part 1: Decentralization
Welcome to the cryptohunt jam where we spend one minute a day to explain crypto. In plain english.
The reason Bitcoin exists in the first place is widely assumed to be Satoshi Nakamoto’s disagreement with fiscal policies around the 2008 crash.
This week, let's have a brief look at history and the discussions around crypto: Is it really necessary?
The 2008 crash was a direct consequence of big banks placing increasingly risky bets on ever rising housing prices. When the bubble popped, most of them got bailed out by governments which printed massive amounts of money to do so, causing inflation.
Many people were unhappy with this; they found it unfair that these banks would get saved at the expense of everyone else; after all they caused the mess.
Bitcoin attempted to change the game by creating a system of money that is decentralized, meaning no single player has the power to change it. It, in fact, was even built to be deflationary: There can never be more than 21 million Bitcoins, meaning nobody can print it.
But do we really need such a self-policing system?
Critics will argue that governments' ability to react to market conditions is a great thing. This way we can proactively step in and help the economy.
And they will rightfully argue that we have replaced something simple and effective - a centralized system, with something complicated that only insiders understand. While a company like VISA can run the world’s payments out of a single data center, we burn through a household's energy just for a few Bitcoin transactions.
You see, what it comes down to is this: Do you think the financial system as it is has been serving society well? Or do you think power should shift away from governments and big corporations so everyone can participate at their own risk?
Next time we'll look into those questions in more depth. Until then – happy learning!
Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.