This week there is a flurry of news around a number of bad actors in the world community who are moving forward with plans to create their own cryptocurrency, or that they are moving forward with plans of doing the same. The names of these countries are on the US’s sanctions list, and at least for a while have been under legal pressure from world governments because they frankly don’t like to live by the rules, or at least the moral code of ethics we declare we live by.
But I digress.
Full disclosure, I agree, I’m not a fan of Iran, Venezuela, or Russia, but that isn’t the point of this article, at least not the reason I’m writing it.
“Russia and Venezuela will continue to strengthen their trade balance,” Delgado also wrote. “We will continue advancing in the construction of a multipolar and pluricentric world, free of imperial tensions.” source
Information and Communications Technology Minister MJ Azari Jahromi made the announcement on Twitter Wednesday following a meeting with the bank’s board of directors.
He described a meeting during which “digital currencies based on the [blockchain]” were discussed, adding that it was decided “to implement the country’s first cloud-based digital currency using the capacity of the country’s elite.” source
So we have three countries here who have announced and/or are talking about their new blockchain based currency. The thought would be these shiny ‘coins’ would be marketed as a way to trade with said countries apart from a regulatory financial system that currently disallows the very trading said currencies are hoping to circumvent. I’m assuming everyone reading this article is fully aware of this ‘covert’ very public action, so why am I writing about it?
Because it very publicly exposes the greatness of the concept. Blockchain creates a mechanism to guarantee that whatever is promised will happen. E.g. The ‘SHA’ cannot be copied, therefore it is immutable. Immutability means trustworthy. If you can trust the SHA and the ledger that produces it, you can trust the transaction. If you can trust the transaction and access it without intermediaries, you can trust that you’ll get more value with less fees. More value with less fees is the thing. Remove the middleman and the opportunity is suddenly opened to the masses who previously couldn’t have dreamed of having access to it.
This single reason is why people in countries like China and India gravitate toward the concept of cryptocurrencies, because their very governments continually make rules about what they can and cannot do with their money. Circumventing such rules ( though potential pitfalls exist ) allows them to freely use a banking system without government control. We all have rules about what we can do with our money, but in the US, we’re allowed to do more than these other countries. Our legal system is fraught with tricky rules as well, and many would say the rules only help the powerful, at the expense of the weak. When that scale tips too far the other way, the blockchain starts to make more sense.
The danger of course is that this free for all banking is the wild west. With zero regulation, anyone working within this system has to watch their step. ‘I thought that regulation was the problem of the current financial system’ you ask? Yes, it created the blockchain, it is absolutely the fault of the current financial system that it exists. However, we are a society of rules, and eventually some rules need to be set.
And this is the entire point.
The Internet used to be that wild west. It used to be that free for all where making a purchase to some remote gateway was fraught with peril and security concerns. For the most part those concerns are largely a feeling, and the actual transactions mostly go without a hitch. We now have credit cards that insure against fraud, and any number of services to ‘protect’ us. I throw that in quotes because there are many many other ways to get in trouble if you don’t pay attention to what is going on around you.
That Internet did become ‘somewhat’ regulated, but it is still largely free. There are a huge number of bad actors who use the Internet, just like in the real world, but as a whole the single existence of the loose network of computers has brought many many people out of poverty, and allowed many more to create vast wealth. It isn’t perfect, but it has done a lot of good.
The blockchain provides the same opportunities for these same people who now have access to the Internet. Instead of purchasing things they need for their family and paying a fee for bribes, they now buy direct from the blockchain, and receive more goods at a fair rate. Schools can buy goods and literature from a trusted resource without needing to pay additional middle men to get a pricing list that first greases palms before providing the service for the children. Food can get to where it is needed when purchased directly from the area that needs it, and/or loans and grants can be made to individuals long forgotten by the financial system, allowing them to jump out of poverty and bring about growth to others who can now take advantage of their products and services because of this medium.
Bad actors prove the system has merit because they think they can whitewash their dirty currency. I believe if there is a system that helps the small guy while providing competition to the entrenched financial system, then bring it on!