Give me control of a nation’s money and I care not who makes it’s laws.
-Mayer Amschel Bauer Rothschild, Banking Dynasty
Money is a tool used as a medium of exchange to make business easier. Yet for hundreds of years banks have been controlling this tool to acquire power.
Initially banks were used to store gold and issue receipts for any deposits. Rather than withdrawing gold for every transaction, people would trade these receipts amongst themselves.
Eventually the banks got crafty and issued out loans with receipts for more gold than they had in their vaults. By charging interest on these loans they were able to increase their wealth.
What was once considered fraud is now a standard procedure called fractional reserve banking. Gold was removed entirely and the paper notes became the primary form of money. Now everything is digital credits and paper only represents 5% of the money in circulation.
There are many examples in history of banks having a liquidity crises and not being able repay depositors. If everyone tried to withdraw their money at the same time there wouldn’t be enough to go around, this is known as a run on the banks. Greece is one of the most recent examples of a failed banking system.
Since the creation of Bitcoin, individuals now have an alternative option to hedge against a faltering banking system. Here are 5 reasons why cryptocurrencies are liberating.
#1: Cut out the middleman
Cryptocurrencies are stored on decentralized open-source networks. All transactions are peer-to-peer which eliminates the need for trusting third parties. This is the first time in history when people can use a global payment network without needing a financial institution.
#2: Control your Money
If you keep your private keys secure then nobody can access your money. The money in your bank account represents an IOU from the bank. Unlike fiat you are not at the mercy of an institution to honour their debt.
#3: Censorship Free Money
Peer-to-peer networks are resistant to censorship. Money is just information and transactions are a form of communication. In the traditional banking system our money is censored with capital controls and spending limits.
Although cryptocurrencies record all transactions on a public ledger, they don’t require personal identification to use. There are even coins that specialize in obfuscating transactions for better privacy. Identity theft and fraud is rampant on the internet and this may be a safer payment option to protect yourself.
Unlike the closed door secrecy surrounding traditional financial systems, the rules of crypto are transparent with open-source code. You can choose your cryptocurrency of preference based on the different features offered. In the event that you don’t like changes to the protocol you’re free to choose another coin or even start your own.