Someone considers cryptocurrency as an overgrown bubble, the inglorious end of which is only a matter of time. Someone – a panacea for numerous diseases inherent in the traditional financial system. Some see them as a way to get out from under the auspices of banks and the ability to manage their finances without interference from third parties. Others are a social elevator, capable of making relatively small investments in real wealth.
Bitcoin is the first cryptocurrency and, in combination, a decentralized payment system that offered people the technology to perform anonymous transactions on a network that is not based on trust, and avoids any financial institutions in their work.
Thanks to this technology, millions of people around the world were able to make remittances for which there are no political or geographical boundaries. Transfers beyond the control of banks or any other centralized system, with the inability to block your account or track your digital footprint.
Blockchain is a transparent system under which everyone can freely track any transfers made on the network. Anonymity within this completely open system is achieved due to the fact that your Bitcoin address is not tied to your identity. All that other users will see is the address of your wallet and transfers made from it.
Suppose that the above is publicly available information, which is owned by each of those who are at least a little interested in cryptocurrency. But I stopped on it for a reason. This small digression, I would like to emphasize that the concept of the first “money created using cryptography” is the observance of the principles of DECENTRALIZATION and ANONYMITY in the system. And now – let’s continue.
Digital assets and state
For a long time, cryptocurrencies were erroneously equated with a variety of pyramid schemes . States actively opposed the very idea of decentralized finance, pointing out that such technology, devoid of a centralizing authority, would become a convenient ecosystem for money laundering and illegal transactions. However, over time, due to the development of blockchain technologies and the growing popularity of cryptocurrency, many countries have changed their attitude. Some of them are now actively developing a legislative framework for regulating the cryptoindustry. And someone at all – is thinking about creating a state cryptocurrency …
According to the description, digital assets issued by the state are more like another electronic equivalent of traditional money. In essence, they do not at all correspond to the original concept of cryptocurrency and from any “VISA”, differ only in cryptographic origin. Decentralization and anonymity are replaced by total control of the Central Bank, which thanks to the blockchain technology has become even more ingratiating and vigilant.
There will be no third-party miners or validators from among the mere mortals. Confirming the transaction will be the Central Bank, individually. In my humble opinion, such a system is quite far from a real blockchain with many nodes (communication nodes (computers) connected to the blockchain chain) all over the world and is nothing more than its gross fake. A fake that will be managed by people surrounded by corrupt officials who have the power to “put pressure on anyone” and bring any information convenient for them into the fully centralized “blockchain”. I do not mean any particular country. It’s no secret that in the world there are many countries with corrupt officials.
Cryptocurrencies were created as a way to achieve financial freedom
State “digital assets” are designed to limit this freedom to the maximum. Restrict the system, which by its very existence flouts all ideas of cryptocurrency, but which will still be imposed on people. A good example of this action is the current head of Venezuela, Nicolas Maduro and his El’Petro.
Maduro actively promotes its cryptocurrency. Pension savings of citizens are transferred to El’Petro. In banks, they offer it as an alternative currency. And one of the last decrees, the president of Venezuela, in general, increased the price of his cryptocurrency more than doubled than the sovereign bolivar devalued. And all this is ignoring the fact that the cryptocurrency price should not be determined by the “wishes” of the head of state, but by the supply-demand ratio for this currency.
Centralized state cryptocurrencies have no future (see state control of cryptocurrencies ). This is an oxymoron, which can exist only as a theory, a thorough understanding of which should push the development of technology forward, to the next stage of financial evolution. And I am not saying this because I am opposed to centralization. If you think a little, then you will see for yourself that the current financial system is almost identical to the one that involves the creation of state scripts. The only difference is that in the second case, the storage of information will be handled by a dubious type of blockchain, the “reliability” of which can be a topic for a hotel discussion.
The use of cryptocurrency for international trade in terms of sanctions
In theory, a state cryptocurrency could be a convenient tool for circumventing sanctions and a good replacement for the dollar in international transactions. The only problem is how to convince other members of the world community to use your currency in the calculations. There is no need to go far for an example: The aforementioned Nicolas Maduro suggested that Russia use the El’Petro cryptocurrency in settlements for oil, which was soon refused.
In order to convince other countries to use your cryptocurrency in international transactions, it is necessary to have great influence in the global community. But even this approach will not protect against the emergence of opposition sentiments. It is hard to believe that the United States will easily agree with the fact that a number of countries simply refuse to use the dollar in international transactions. At least until the moment America itself tries to push through some of its own, ruled by puppeteers from the Fed, the coin, as a new calculated currency for interstate commerce.
How should a cryptocurrency be created?
I think that under the circumstances it will be difficult to avoid a conflict of interest. Therefore, in order to minimize risks and increase influence in the world community, a more advantageous solution would be to use the cryptocurrency created by the allied states. A peculiar alliance of countries willing to cooperate with each other, using the “international cryptocurrency” created jointly for transactions. And the more states will take part in creating such a digital asset, the more influence such a coin will enjoy in the world community.
An international cryptocurrency would have surpassed its backward (state) colleague at least in the fact that for the full-fledged operation of this asset created by joint efforts, a real decentralized blockchain would be needed, in the ecosystem of which all members of the “alliance” would have equal rights and opportunities. Nodes that support the operation of such a blockchain could belong to government agencies, but at the same time be scattered across different countries, which would ensure proper decentralization of the ecosystem.
Cryptocurrency industry and the state
In conclusion, I would like to say that cryptocurrency is a powerful financial tool that can significantly improve the material condition of both an individual and the whole country. Therefore, in the future, after all issues with legislative regulation of cryptocurrency will be settled, I would like to see the governments of different countries also declare themselves as key players in this still very young market.
I’m talking about the creation of specialized public funds, the purpose of which would be to increase capital through investing in promising projects or trading on decentralized international sites. This would repeatedly increase the total capitalization of the cryptocurrency market and would have a positive impact on the economy of each individual country.