The modern government-run financial system employs a staggering amount of national debt. The United States’s national debt is fast approaching $18 trillion, with no sign of stopping. This debt, while incurred by the government, ends up being the responsibility of the public to pay it off, or else risk collective financial suicide.
However, instead of shouldering this massive burden and having economic progress crushed under its weight, there exists a way to use cryptocurrency to achieve the opposite effect for people: give them equity.
Currency control stifles business and innovation
Establishing by dictat a common, controlled currency for a nation has the effect of economically isolating that area from the rest of the world. By placing restrictions around the medium of exchange in an arbitrary geographic area, businesses with parties outside of that area is made much more difficult.
Cross-border transactions require at a minimum that a currency exchange has to take place, which may be subjected to capital controls, money laundering laws, etc.
Navigating the banking systems, legal restrictions, exchange rates and so on can make doing business internationally much more difficult than with cryptocurrency, where any transaction to anywhere in the world is the same as any other.
Inflation steals value from people’s savings
A feature of central banking for government (a curse for the people) is the ability to inflate currency to pay off debts. Citizens holding the currency are forced to watch it devalued, as their life savings are diminished with each new unit printed.
While in countries without strict capital controls it is possible to invest in other currencies or stockpile commodities such as gold, legal tender laws still apply. Therefore, a certain portion of finances must remain liquid in the country’s devaluing currency in order to cover day-to-day expenses, disproportionately affecting the nation’s poor.
With high inflation, the rich see losses on whatever small portion of their wealth is forced to remain liquid, while their investments in commodities or offshore accounts remain unaffected.
The government profits from the printing of money, as it amounts to value out of nothing for them while they drain value from everyone holding that currency. The poor and the middle class, finally, are affected the worst, since a significant portion of their earnings must remain liquid to cover expenses. For the poorest living close to margins, any change in value of the currency can be devastating.
National debt holds the people hostage
Fiat currencies, backed by no commodity and able to be inflated at will, have no intrinsic value. The value they do maintain is based on confidence in the government, its management of the economy, and the strength of that economy. In the event of economic catastrophe, including government mismanagement or default, the currency’s value will plummet.
When a government accrues debt, it becomes the “national debt,” or the responsibility of the people. This in turn puts an economic gun to the head of every single citizen. No matter how little the people consented to whatever massive debt was run up by their government, they are forced to pay it off whatever it takes, or else risk losing the value of their life savings overnight. By holding the people hostage with the national debt, they can ensure that no one will simply refuse to pay taxes. This extortion scheme is airtight as long as there is no other option for money.
Cryptocurrency takes back control of money
Enter cryptocurrency to save the day, rescuing the people from the dark, oppressive dungeon of a government’s control over money. To begin with, no cryptocurrency worth its salt can be inflated on a whim, robbing its users of the value of their hard work. The price must be dictated by the laws of supply and demand, and a well-managed currency with a robust user base will see its value react accordingly.
Even if a cryptocurrency is mismanaged and does its users wrong, they are always free to move on (sometimes instantly, in the case of using a Coinomi wallet and converting to another currency with its integrated ShapeShift functionality), providing a considerable economic incentive not to bungle the currency.
Finally, using a pseudonymous or anonymous currency means reporting transactions to whatever authorities is a voluntary choice, freeing up commerce that is either illegal, restricted, highly taxed, or otherwise inconvenienced to be able to operate at peak efficiency.
National cryptocurrencies give something back to the people
Traditional cryptocurrencies such as Bitcoin do empower the common man and provide a way out of financial slavery, but their positive effects are more limited to certain groups of people.
A currency that is mostly (or entirely) brought into existence by miners running a complex algorithm centralizes its benefits around the technological class, making them the gatekeepers of the new financial system.
As the old system slowly sinks to oblivion, the everyman will be stuck scrambling for entry into the new one as cryptocurrency prices rise to meet the growing demand. This is still far more equitable than the government system, and it allows the savvy to buy into the future at any time, but there might be an even better way.
The distribution of currency via “airdrop” method imparts an additional benefit beyond that of providing a tool for people to use. By primarily disseminating the currency directly to the public, rather than through crowdsales or mining, value is shared with an entire population rather than a select few.
Even without an airdrop, a digital currency crafted with the branding, infrastructure, and development team goals geared towards getting the maximum amount of cryptocurrency in daily use by as many people as possible in a highly localized area will have the effect of benefiting an entire nation more than those select few.
A nation featuring cryptoequity instead of debt
By giving a newly-minted cryptocurrency to those in a certain area with their interest and branding involved, they are able to build equity in themselves and the strength of their own economy.
Whereas a centrally-banked fiat currency drains collective wealth from people even in good times, a national cryptocurrency allows the benefits of their economic well-being to remain and multiply. In short, national cryptoequity is the pleasant opposite of national debt.
The old paradigm for money was to force people to use a currency, then gradually steal all its value through inflation. The new paradigm is to create a voluntary cryptocurrency, and reward early adopters and infrastructural developers, with the rest of the general public able to catch on whenever they hear about it.
Could the future paradigm be to bequeath digital money to as many people as possible, allowing the masses to grow rich as the currency is developed and gains value?