This is why Blockchain Really Matters
There is increasing discussion about the advantages and the rise of cryptocurrencies. Additionally, there is also talk about the efficiency blockchainwill provide to governments and banks. But there is something unfolding in front of our eyes that many forget to mention. The potential within blockchain is very profound and yet, rarely being mentioned.
Looking at how the internet impacted our world, what industries it changed and how politics had to adapt to it, you can get an idea of what change blockchain will cause. The internet is mainly used for direct information sharing and entertainment. A great encyclopaedia and a place for people to connect. New industries have been created and others have been crushed. For instance, publishing companies who didn’t adapt and stuck to print only, quickly saw themselves losing to the competition.
The internet disrupted by being a really efficient communication layer, while the blockchain is really efficient at providing a layer of trust: a unifying settlement layer, where transactions, agreements and contracts are secured. The internet completely changed the landscape for companies who provided traditional ways of communication and information, and so will blockchain for companies who provide trust services. Examples could be: notary services, banks, exchanges, online payment providers or casinos.
Blockchain is decentralised, meaning there is no central point of control and no government can change the consensus rules of the network. Communications within a network can easily be encrypted and make it about as difficult for governments to prohibit its traffic on the internet as the use of torrent file sharing applications. Once you build a currency on top of these properties, you get something truly unprecedented. It will be extremely difficult for central banks to devalue and governments to interfere with your freedom to own, spend and use your blockchain token or currency. This means everyone suddenly has access to a Swiss bank account that can be accessed from around the world, on every phone and every computer. No one is able to look into your account, freeze it, or seize your funds.
What is even more important is the efficiency at which blockchain delivers these services and tools. This efficiency is also the main reason for the current adoption momentum. Fundamental free market principles predict that the most efficient service, using the least amount of resources and providing the most value to the user will gain major importance on the marketplace. Blockchain is so incredibly efficient due to the elimination of overhead infrastructure, such as the ones companies have offering the same service. You basically have no wages, rent or bills to pay.
The social and political impact is going be huge once a critical mass is reached. Currencies backed by banks and governments won’t be able to compete with the efficiency and confidentiality of blockchain-based digital currencies and fiat currencies are ultimately going to fail. The consequences of a widespread adoption of such an alternative currency is politically detrimental to today’s regime of governmental overreach. A society which is only sustained by central banks artificially keeping interest rates low and with an increasingly indebted government.
In the end, the incredible efficiency that blockchain has to offer will make the government’s monopoly on force useless. In the old world, if you didn’t pay your taxes, the government could walk to your bank, freeze your account or forcefully remove your funds. In the new world that will be ushered by blockchain, governments will have a hard time even figuring out how much you own in the first place or what transactions you made, what you got payed for or what you bought.
“Let me issue and control a nation’s money and I care not who writes the laws.” Mayer Amschel Rothschild (1744–1812), founder of the House of Rothschild.
With blockchain, the people issue and control the nation’s money.
This article was first published on Alex’s Medium page.
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