A lot of big claims are made about cryptocurrency in general and Bitcoin in particular. It’s going to change the world, we’re told. The foundation of those big cryptocurrency claims has nothing to do with Bitcoin’s value — or the fact that it only exists in a digital form. It’s the future of money. It’s a whole new way of thinking about currency and capital and finance. There are three main reasons decentralization is the future of currency.
The future of currency will all come down to decentralization. That term is essential for changing the way currency currently operates.
Decentralization is Important for Three Reasons.
You Can’t Manipulate a Decentralized Currency
Governments have all sorts of tools at their disposal affect currency rates. If they merely print more money—as they did during the recovery from the last crash—the value of the currency will fall. If they change interest rates, they affect the supply of money available, also changing its value. Governments can also spend more taxpayer’s money, sending more of the currency to run through the economy.
Currency leaves a lot of power in the hands of government and officials whose decision-making isn’t always predictable.
Decentralized cryptocurrencies can’t be manipulated. There will never be more than 21 million Bitcoins in circulation. They’re currently released at a rate of 1,800 every day, and no individual or group has the power to change the release rate. Unlike fiat currency, the value of cryptocurrency is only set by the market and can’t be affected by a government decision.
Decentralized Currencies are Democratic
That makes decentralized currencies the most democratic form of money ever created. Because it’s not the currency of any country, no government decision can set its price. Decentralized currencies are entirely in the control of the people who use it. The more people who use Bitcoin to make transactions, the more demand there will be, and the higher the price will rise. But no government or body can try to counteract that pressure by producing more coins. It’s all down to the people.
Decentralized Currencies Are Truly Global
Perhaps the most outstanding reason that decentralized currencies are the future of money is that they’re truly global. Sure, there might be lots of Bitcoin miners in China. Just as decentralized currencies have no central authority that sets their value, so they also have no central location. Cryptocurrency users can send a digital coin from Nebraska to Nairobi and on to Nagasaki without ever running into trouble at an international border.
This freedom to send money digitally is how the world operates now. Globally we might still be made up of nation-states — but business is global and has no borders.
A product made in one country will often have been assembled from parts ordered from a dozen other countries and sold to half a dozen more. The global economy needs a currency free of the control of any government, and that can be used to ensure that each of those transactions takes place smoothly.
Business will always go forward to become more international.
Every company wants to find new markets, and it wants as few barriers as possible, blocking its ability to sell to those markets. A decentralized currency makes doing business around the world more accessible. That’s the future of money.