How a Digital Currency Might Help Save the World

Digital Currency world

It’s been a while since we wrote a futuristic and highly speculative opinion article. In light of the massive economic uncertainty and the everlasting lockdowns, we decided to do just that – it seemed rather fitting given everything we are going through.

The topic is none other than cryptocurrency, and the digitization of FIAT currencies. While the average consumer continues to remain oblivious to the fact that double-digit inflation numbers are coming, institutions buy Bitcoin with their cash reserves eyeing complete destruction of the global economy. Is that really a possibility? Read further to find out!

The current situation in our economy

While the mainstream media keeps raving about vaccines and masks, the elephant in the room is, for the most part, ignored. All over the world, businesses remain closed for nearly a year now, with unemployment numbers increasing steadily to new highs.

While those who continue to earn money are highly limited to remote, digital work, the average small business is going bankrupt while still having to pay for pretty much everything. Same rent price, same taxes, same mortgage payments, same expenses. It seems unfair for some, but the majority of the public remains quiet given that we all face a common enemy – the COVID19 virus. 

And while all this is happening, banks and financial institutions are collaborating with the government to find ways to rebalance the economy. 

  • More than $10 trillion in bailout packages has been created on a global scale, while the US is about to release another $1.9 Trillion package to support businesses and individuals. These massive amounts of money have to be absorbed within the economy, and the results are devastating. Many analysts expect a 10-15% inflation rate per annum for the next three years at least. In other words, the value of your money could be halved by the time this is over.
  • Banking interest rates have dropped to zero globally, giving no more incentives to customers who choose to store their money with a specific bank. Some banks are even charging their customers when it comes to making use of their services.

As you may be able to understand by now, there is a real problem when it comes to the viability of the US dollar and all other FIAT currencies. The issue is so bad, in fact, that many believe we’re headed towards a financial “reset”. And this is exactly why digital currencies are important.

Digital currencies for the rescue

During the financial crisis of 2008, some people managed to foresee the problems that would occur in the future. Financial problems to be more exact. One of these people was Satoshi Nakamoto, who created Bitcoin in the midst of this time, releasing it to the public in early 2009.

Over the past decade, we have seen a massive growth curve in bitcoin’s price, adoption, and public understanding. Some might say that the worse our economy becomes, the more Bitcoin increases in importance.

The first time that this was put to the test was in 2013, in Cyprus, when economic instabilities caused the government to impose a “wealth tax” on all bank accounts that exceeded a certain number of funds. In just a few days, we saw a massive wealth transfer from the banks into Bitcoin, driving the price from $350 to $1200 dollars.

The second time we see this is right now. As more money is being printed and inflation rates continue to grow, more people and institutions convert their funds into bitcoin to exit the failing system. As a result, Bitcoin grew back to its old all-time high before making a run towards the $42.000 levels. While it is currently lower than its peak price, global institutional interest is higher than ever, and we expect to see more companies converting their cash reserves into BTC.

In the meantime, blockchain technology is being used by governments all over the globe to create digital FIAT currencies. The new form of money is nothing more than a stablecoin issued by government agencies in order to completely digitize money. Unlike the Bitcoin price chart patterns, these coins are projected to remain stable in value, eventually replacing the money we are using at the moment.

Surviving the “apocalypse”

The financial system that we currently use is just 50 years old (time off the gold standard). Historically speaking, no currency based on third-party trust has ever managed to survive. This means that, eventually, we will enter into a financial apocalypse, which will completely reshape the economy.

When this happens, all money from our current system will flow into better alternatives, which at the moment are Bitcoin and popular precious metals. While precious metals make an excellent store of value, they are really hard to transact with as they cannot function as a currency. This is where Bitcoin wins.

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