| json_metadata | "{"app":"musing/1.1","appTags":["cryptocurrency","fiat","money"],"appCategory":"cryptocurrency","appTitle":"Why can't cryptocurrency replace fiat money?","appBody":"<p>After the emergence of Bitcoin in 2008, the cryptocurrency gained a large number of believers. These people believe that this decentralized currency may be a powerful tool against the uneven wealth. Nowadays, the advantages of cryptocurrency have been greatly elicited, and people are looking forward to the success of this \"revolution.\" However, if Bitcoin or any other cryptocurrency really replaces fiat money, have proponents seriously considered what will happen.</p>\n<p>The answer is that this wealth inequality will not disappear.</p>\n<p>The basic use of money in contemporary society is as a debt record, and cryptocurrency advocates seem to think that this is not worth mentioning. To be frank, unless the economic psychology changes, even if the cryptocurrency replaces the fiat currency, the current financial structure will not change.</p>\n<p>Of course, cryptocurrencies may reduce transaction delays and reduce transaction costs, enabling P2P transactions, but this does not have any effect on how the financial system works, because financial concepts such as interest and debt are already deeply rooted in people's minds.</p>\n<p>No matter how it develops, there will always be some entities that hold more money than others, whether it is legal cash or cryptocurrency. And those wealthier entities use their own funds to extract value from entities with less capital. In other words, if we are already living in a world that uses cryptocurrencies, people may still borrow money to buy a house and fall into the infinite loop of interest and debt.</p>\n<p>Advocates of cryptocurrencies believe that decentralized digital currencies can help people bypass existing corrupt financial institutions, but they ignore the fact that bonds and other concepts are not tied to exchange media (currency, checks, etc.). And there is. Therefore, no matter what kind of exchange medium, the economic business operates in the same way.</p>\n<p>In order to promote the development of the encryption economy, centralized financial institutions will inevitably appear as if they are necessary to maintain the development of the contemporary legal currency economy. In a financial system centered on bond debt, people can only accept this reality.</p>\n<p>Furthermore, while cryptocurrencies can increase transaction transparency, is this important to us? The way large financial institutions obtain value from available capital is first to use this capital to earn interest, and secondly to allocate capital to maximize benefits, such as paying workers less than the wages they create. Exposing and transparentizing all of this information not only does not change the structure of interest and capital utilization, but also violates personal privacy.</p>\n<p>Objectively speaking, cryptocurrencies do reduce fraud. However, when it comes to the corruption of large financial institutions, people tend to pay attention to the illegal behavior of individuals, and the institution can still continue to earn money in accordance with the law.</p>\n<p>The polarization of capitalists and workers will still exist in the world of encryption.</p>\n<p>Just as in a legal currency-based economy, wealthier groups employ (that is, extract value) as poor people, and this practice is prevalent in the world of encryption. The cryptocurrency will neither rebalance the capitalist and socialist scales nor increase the mobility of society.</p>\n<p>Fans of cryptocurrency only see the advantages of the encryption economy, but rarely think about the inherent nature of the monetary system based on creditor's rights and debts from the perspective of anthropology or economics, and this is the key to gaining benefits.</p>\n<p>Unless we put aside this kind of creditor-based economics that has existed for thousands of years, there is no point in replacing cryptocurrency with legal currency.</p>","appDepth":2,"appParentPermlink":"p35k4c7nw","appParentAuthor":"yanju","musingAppId":"aU2p3C3a8N","musingAppVersion":"1.1","musingPostType":"answer"}" |
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