With some research and a little technical aptitude, distributed forms of money such as bitcoin can be used as the digital equivalent of cash, offering the potential for anyone to theoretically bank themselves without relying on traditional financial institutions.
Additionally, innovative wallet technologies mean anyone can store vast amounts of value without the need to trust governments or banks. From brain wallets to paper wallets, multisig to BIP32 hierarchical deterministic technologies, the ability to store cryptocurrency value independent of a third party is becoming more sophisticated by the month.
This all adds up to a revolution in personal finance that can be attributed to smart and enterprising developers who see digital currencies as a means for independence that has never before been possible.
Independence and banking
The 4th July holiday is known for being a mid-summer soiree of fireworks, sun and socialising, but many forget that, 238 years ago, on 4th July 1776, the founders of America signed a document proclaiming independence, sovereignty over its land.
At that time, the founders faced the threat of war from a king very far away and it took over eight years in the Revolutionary War – a war against ‘rebels’ as the British called Americans during that time – before complete independence from Britain was secured.
The Americans who fought in the Revolutionary War believed that they could create a new country with equality and liberty as its keystone.
Now, another revolution is underway, with similar ideals. Distributed currency makes possible the independent safekeeping of monetary value previously strained by physical limitations. When fiat currency first became prevalent, banks were tasked with the security and accountancy of money.
Today, now that most value is relegated to the role of a database store, cryptocurrency can free those who distrust the motives of third parties, namely government and the banking industry it controls.
This is the mantra of so-called crypto-anarchists and many libertarians. But political aspects aside, at the very least, bitcoin and its variants bring a new concept to the mind of the traditional banker: competition in the form of a totally new type of money.
The Federal Reserve, with its ability to control monetary policy with the pulling of a few levers, believes it can compete as a capable adversary. It will be interesting to watch how this saga unfolds.
- ^ trust governments (en.wikipedia.org)
- ^ brain wallets (www.coindesk.com)
- ^ paper wallets (www.coindesk.com)
- ^ multisig (www.coindesk.com)
- ^ BIP32 (www.coindesk.com)
- ^ fiat currency first became prevalent (www.coindesk.com)
- ^ it can compete as a capable adversary (www.coindesk.com)
- ^ IBTimes (www.ibtimes.com)
- ^ other cryptocurrencies (www.coindesk.com)
- ^ CoinDesk (www.coindesk.com)
- ^ still struggling to get bank accounts (www.coindesk.com)
- ^ Coinbase (www.coindesk.com)
- ^ Mt. Gox (www.coindesk.com)
- ^ California making bold moves (www.coindesk.com)
- ^ marijuana legalization (www.coindesk.com)
- ^ Arab Spring (www.coindesk.com)
- ^ block chain (www.coindesk.com)
- ^ fully grasp its true power (www.coindesk.com)
- ^ Blockchain.info (blockchain.info)
- ^ certification of public proof (www.coindesk.com)
- ^ tracking down hackers (www.coindesk.com)
- ^ stymieing corruption (www.coindesk.com)
- ^ Innovation is Everywhere (www.innovationiseverywhere.com)
- ^ Declaration of Independence image (www.shutterstock.com)
- ^ banking (www.coindesk.com)
- ^ block chain (www.coindesk.com)
- ^ Independence Day (www.coindesk.com)
- ^ unbanked (www.coindesk.com)
- ^ underbanked (www.coindesk.com)