The old saying “Money makes the world go around” rings true today and will most likely continue to do so until the end of time. But with the rise of Bitcoin, the future of money might potentially be web-based, non-physical, and decentralized, a radical departure from what we know of it today.
Money is the one thing we have in common – no matter your nationality, gender, religion and background. It moves our lives, society and the world forward. We all strive to make and save money to purchase things we need (like food, shelter) and help us achieve our hopes and dreams.
Cash or money for many of us is physical bills and coins issued by the government, which we, in turn, use or keep in banks. In the last decade however, Bitcoin (a form of digital/virtual currency, or cryptocurrency) has been forging ahead, gathering momentum and causing many financial and tech communities to take notice.
Bitcoin was created in 2009 by an unknown individual or group of people (with the pseudonym Satoshi Nakamoto). It was his gift to the world; a means for people to break free from the economic bondage of modern banking and financial systems. It is an entirely independent new form of currency not controlled by any government, central bank or financial institution. No one owns Bitcoin, but it is owned by everyone who uses it. Its development is a direct reaction to the systemic corruption within the world’s current financial systems and their continued manipulation of our hard-earned money.
Throughout history, money has controlled the economy and to gain political power. A significant change to money was when the world’s governments switched from hard currency to fiat currency in the mid-20th century. Hard currency is when the value of money is pegged to a tangible commodity like Gold or Silver. Fiat currency, on the other hand, is when governments create money, declare its value without the need for it to be guaranteed or backed by anything other than for us to trust their word.
Today, central banks all over the world create money out of “nothing” (called “magic money”). This money is funded by debts, interest payments and the like, a scheme most financial institutions push, even though it devalues money through inflation. It allows them to take more of our cash while we are clueless about what is happening.
With Bitcoin it is hoped that individuals will have greater control of their money and enjoy lower interest rates and fees. It does not have a physical representation, and all individual balances and debts are listed on a decentralized and open ledger with universal access for full transparency. In today’s internet-driven world, Bitcoin has the potential to empower about three to four billion people in the third world by removing the crippling 10 to 30% service fees from companies like Western Union when they need to send or receive money.
Though it’s only been a decade since Bitcoin dropped, its future could swing either way. Will the world continue with the current financial setup? Or will Bitcoin disrupt and transform the traditional financial world? Only time will tell.
Directed by: Torsten Hoffmann, Michael Watchulonis