You’ve probably seen all the polarizing views of decentralized monies — it’s good, it’s bad, yada yada. But there’s one thing we might all agree on.
Cryptocurrency is complicated, expensive, risky, lacking reasonable regulation, and hard to secure. On top of all that, regaining access to lost crypto is nearly impossible if you lose your keys or wallet. Gaining and maintaining crypto is a very daunting endeavor.
Can’t I Just Stick to Cash?
Yes, but we have to wonder if that cash will stick to you.
Our money is slipping from us in more ways than ever before. We need services and products now that we didn’t need 25 years ago. And considering that we also have to pad for regular inflation, the average person needs way more cash flow.
Of course, you could always work hard and long hours for your extra money, but there won’t be a retirement payout at the end of the line. You’ve got to put money aside for your own retirement during your working years.
What started off as simple bartering has transcended to middle-man intangibility over thousands of years. How did money come about?
Well, let’s say I had 5 cows to trade and I wanted a fine, silk scarf. But no one in town has a silk scarf to trade. I’d have to go to the market out of town. But they don’t accept farm animals, and I have nothing else to offer.
Money has entered the chat.
If I sell my 5 cows for money, I can buy anything, my only limitation being the amount of money I have.
Money solved a problem. It is only widely accepted because it simplifies the transaction process.
Money was created to be the middle man.
So the person who created money — genius, right? Think of that person as Satoshi Nakamoto. Now, some guy sees the power of money, which essentially is the power to obtain anything. He hatches an idea.
What if I control the money?
Banker has entered the chat.
What do bankers even do? They hold your money for you. Back in the day when money was metal coins, it was difficult to carry around. Even though it’s paper now, you still can’t reasonably walk around with thousands of dollars on your person — where would you put it all?
Money is digital now. Banks don’t need to hold it anymore. But, since banks make money loaning your money, they need a reason to stay relevant. The markets are set up in such a way that you can’t buy things digitally without a debit or credit card, linked to a bank of some sort. And if your money isn’t linked to a bank, it isn’t insured against fraud and theft.
Banks are technically secure, but they also have a reputation of betraying our trust.
If you look at when bitcoin first came about, it was right after the 2008 economic downturn, almost as if someone had had enough. Banks would have been fine if they were ethical, but evidently, they are not.
So Satoshi Nakamoto reset things to how they were back when money was first introduced — Back to when everyone had control over their own money.
Except now, you don’t have to worry about banks — everything’s digital! The most you have to carry around is a smartphone, and mostly everybody has one of those! Technology and world events converged in such a way that made bitcoin extremely viable, and a perfect bank replacement. So what happened?
Few took it seriously.
Many of us who were late to the game, were subject to fear mongering. Everything associated with bitcoin was bad. The Dark Web. The criminal underground. Uncertainty. The state of our world at the time of The Recession. War. Politics. All of these things created a barrier to social acceptance, which is all bitcoin needed to prosper.
“Not Your Keys, Not your Bitcoin”
While I can’t fully recommend using Ledger for your cold storage wallet, their website has a pretty good explanation of what this phrase means. If you do want a Ledger, only buy it directly from their official website. Another highly recommended cold storage wallet provider is Trezor.
If all of your cryptocurrency is stored on an exchange like Coinbase or Binance, you don’t have direct control over it. It’s essentially the difference between having cash in your physical wallet and cash in the bank. Now, there’s nothing wrong with keeping your crypto in the hands of an exchange. It’s risky whether you use a cold storage or not.
Some people say that an exchange could get hacked. Meanwhile, people are buying Ledgers, thinking they’re doing the safest thing, and end up getting hacked anyway.
Just being able to hold onto your hard earned money shouldn’t be this stressful. Which is why we all need to become very proficient in cybersecurity. It may sound like rocket science to some, but it’s merely a series of habits you must have to protect your digital information and assets. Luckily, this doesn’t require CISSP level knowledge. Just a little nudge in the right direction.
Crypto and the Government
I recently read an article about Congress proposing a bill that would “prevent unilateral Fed control of a US digital currency.” Good on them. Some of our government officials actually understand the need for a truly free market.
I was a little concerned about there being an official US digital coin, but consider that other nations are already working on their own coins. It would be in the best interest of the United States to have their own too, if only for conversion purposes.
It’s very likely that an official US CBDC (central bank-issued digital currency) will exist alongside current crypto and stablecoins. And with digital currency, we can put money access into the hands of everyone. If done right, it will significantly boost the economy and make a better standard of living for everyone. If done wrong, well…just watch Ready Player One.
The difference between our centralized banking system and crypto is like the difference between Apple’s ecosystem and well…everything else.
With Apple, your phone, your tablet, your PC, and your cloud can all talk to each other seamlessly. Files and information can be sent between all your devices with low latency because they’re all made by the same company. Apple prides itself on simplicity and convenience, which many people appreciate. Not everyone is tech savvy, and Apple understands this. They take care of all the technical stuff so you can just do you.
When you have a Windows PC and an Android phone and an iPad, it gets difficult to figure out how you can move files between them. They all have different user interfaces, different software, different hardware. Crypto is like that right now. All these different coins, and these different blockchains, all these different wallets…
Variety is good. But since everything is so new, we can’t rely on the track record of any one company. On top of that, the knowledge around crypto is way too fragmented and complicated for the greater population to grasp. We need cohesive products and a cohesive guide, from setup to usage to maintenance.
That’s the million-dollar question, isn’t it? Will crypto become mainstream, accepted everywhere you can tap a debit card? The answer is a resounding yes. But don’t give all the glory to Bitcoin just yet.
Money has been digital ever since you could see numbers in your bank account. Digital monies have been utilized ever since you could swipe a debit card. Crypto is just the next step.
We’re in a trial period of a cashless society and that’s not necessarily a bad thing. Cash is dirty, in more ways than one. And we honestly don’t need it anymore. The catalyst that will kick everything off can be determined by whoever solves crypto’s biggest problems:
- Convenience & Simplicity — the highest priorities, they go hand-in-hand
- Scalability
- Network Coalescence
- Transaction Fees (Gas)
Once crypto accomplishes these things, it will be unstoppable.
On that note, take a look at what Coinbase and Mastercard are doing for the NFT market.
