Today I read an article that inspired me to write this post on why the central banks do not enjoy the bitcoin world. The pressure that bitcoin and altcoin exercise on central banks ensure that they have no choice to understand the technology behind it. They have to be sure they are ready to go against it or cooperate with it.
The central banks have always been in charge of printing money without any interference. Today the central banks have the power to control the world and make it more miserable with the power that money provides to them. They create the crisis and manipulate the market for the sole purpose to make a profit.
Now time has changed and a revolution has started to become a reality, this story started 8 years ago. The adoption of bitcoin is now at the stage to reach the mainstream. Central banks around the world mentions false news about bitcoin.
- The sovereign currency will lose power over digital currency.
- Digital currency is unstable and the price very volatile.
- The limited supply of digital currency can cause a deflation.
- No central authority who control the money supply or set policies.
- Easy for criminal and terrorist to hide their activities.
- Digital money is hard to protect the customers right in the case of theft or fraud.
Now the central banks want to emit they own digital currency with a central authority. They goal is to replicate the blockchain technology because they see the success of bitcoin and they are scared to lose the control of printing money. I read that the Federal Reserve wants to create the Fedcoin. If you think about it, the same problem will occur as they control the fiat currency already. They will have the power to control and manipulate the Fedcoin, so what's the advantage of using it? Their argument will be that they have the support of the government.
Lately, there is a lot of example of control happening in the world. Like what happened in India, the government ban the utilization of the 500 and 1000 banknotes and made it illegal to use it. In a country where the vast majority of the population are unbanked and don't have enough money to gain access to the financial services; people don't have other alternatives than to go on a market that the government don't have control. With this policy in place, the government wants to control the black market, instead, people turn out to seek alternatives like using bitcoins.
Another case in Venezuela where the country experience hyperinflation. The country is losing purchasing power with the sovereign currency. People want to keep the value of their hard earned money and not lose what they took years to acquire, so they buy bitcoins to seek refuge.
This is my personal opinion and the point I want to make is that I strongly believe that bitcoin will survive and no central banks will change this. The central banks are in a stage to create they own digital currency and we will see what is going to happen. When something new revolutionizes an industry, it is always better for the opponent to learn about it and adapt to it instead of starting a war. Everything change and evolve, it is human nature to fear and it is the case with the central banks.
I see a future where the fiat currency disappears and the digital currency has predominance. I can imagine that every country will have their own digital money with the government support and that people would get paid with it and could then pay their taxes.
Tell me what you think; I am curious to know your view.