Everything indicates that digital assets are bound to become our future and cryptocurrencies might influence our lives greatly. Basing on the article published in Medium, we present below the biggest cryptographic changes of the banking world. We are also going to discuss how the new Facebook stablecoin will handle this economic scene.
Cryptocurrencies offer trust
What would the economy look like if the new "system" began to fight with agents, for whom the only task is often to take some of the cash flow?As a consequence of an extremely unfavorable disadvantage of our money project, the advancement of corruption in the current economic system is unfettered. It is a so-called single point of failure, that is a situation in which only a handful of people are at the top of the financial pyramid. These people transfer centralized power to the hands of another handful of people. While the majority of banks and large corporations develop trustless networks, the strongest advantage of Blockchain technology here is transaction validation and smart contracts. These advantages might slowly but effectively eliminate the problem of corruption and create an economy based on trust and not the power of individuals.
Banking without banksThe money belongs to about 4 billion people of the West. Residents of developed countries can freely send and receive money, as well as take an opportunity to spend more money than they have. A behaviour of this kind is so firmly rooted in our system that banks provide services for which we eagerly pay a "small" price. For example, a cup of coffee for every $ 100 spent. For billions of people in the world, however, the money system is not applicable - they are not even part of it. In countries like Argentina, Venezuela and Angola people lose about half of their assets per year. In such hyperinflationary countries cryptocurrencies might be a rescue currency then. The Kenyan M-pesa application is a good example of services that enable peer-to-peer transactions made through smartphones.
Is freedom for everyone?As a result of a completely decentralized exchange of money, the peer-to-peer transactions will have no control or mediation and users will become banks themselves.
"With freedom comes responsibility. Is that what we all want?"We've all got used to the entities that store our money and give access to it on their terms. New, decentralized freedom can overwhelm many. Perhaps millions of people would, for example, want Mark Zuckerberg to take care of their finances, because they trust Facebook, which they use 2-4 hours a day on average. They could control their finances there as well. Facebook's stablecoin will be a huge innovation in the field of digital banking. The Libra application is to be smarter than existing bank applications and currency exchange is to be easier. It is not out of the question, that Facebook may soon be one of the largest banks in the world. Banks because there is nothing decentralized in this solution. Facebook will censor, control and earn money on the behalf of its users. Facebook Libra is a centralized coin that has to comply with centralized regulations. The solution offered by Facebook could be an alternative to those who are not ready for full freedom in servicing their assets.