Robin Olsen holds a B.Sc In Computer Systems and has over 20 years of IT Experience.
With cryptocurrency exchanges popping up everywhere and the declining overall intrinsic value of FIAT currency happening also virtually everywhere one cannot help but wonder what the future of currency may look like.
Will nations take control of cryptocurrency creation using nationalized cryptocurrencies? Will Bitcoin become the new global currency of the digital age? What kind of monetary policies can even be created in this freewheeling digital world? Is it all just a scam that will crash and burn?
It seems to me, after dabbling in a bit of cryptocurrency speculation myself, that this ‘wild west’ frontier of the financial world will definitely need to be brought under some form of control at some point. If only for our own sanity.
The financial 'Wild West' has arrived (again)
The National Requirement of Money
The creation of money is a fundamental aspect of national sovereignty, perhaps one of the most important aspects. The national governments will not allow themselves to lose control over that, it would be foolish.
Crypto currencies threaten that sovereign control and as such will be dramatically opposed by any nation that has a currency of any value on the world stage. Other disputes between nations will take a back seat to the threat of crypto as it is a universal threat to literally every nation state that has any control over it's own monetary policies and wishes to keep such control.
We have already seen the rich begin to turn on things like Bitcoin with Elon Musk's recent reversal of overwhelming support he had for Bitcoin and his own creation DOGE coin being a prime example of it. Everyday now the assault on cryptos increases from China, Russia, England, the USA and the overall value of these currencies is suffering the effects. Hey|! At least these guys can come together over a universal threat right? Gives me hope in the event of a alien invasion.
At the same time they are creating their own crypto currencies so we will have them, but they will be under national control and will not be the ones we see being traded today on speculation markets all over the world.
Cryptocurrency speculation poll
The Cryptocurrency Speculator
Currency speculation is not investment, it is speculation and it has always existed since multiple currencies existed and it has always been inherently risky, which is one reason why only the super wealthy did it, until now.
Bitcoin has convinced many middle class folk to engage in a game they have no idea how to play in my opinion. The result will be catastrophic losses for them if they are not careful. Crypto currency speculation is no different than FIAT currency speculation as far as risk goes. Such activities are heavily manipulated in today's world, as they always have been when you look at the history of currency speculation.
When you buy stocks it is normally done to improve the organization you bought shares in and help them grow and you tend to flip those shares very slowly thus hanging onto them for longer periods.That's investment. This is why the stock markets were invented to begin with, to trade ownership in an organization for investment into that organization's future.
Currency speculation, crypto or otherwise, is the exact opposite of that. It is a short term gamble in the value of a given currency. National FIAT currencies do not fluctuate that much so the only way to make significant money doing it is to have significant money to speculate with to begin with. Thus, until crypto came along, only the really rich dabbled in currency speculation.
Crypto has altered that by allowing large amounts of their currencies to be purchased for very little fiat money. For example, based on my research at the time of writing, one can purchase 4 million SHIBU coins (a crypto currency) for roughly 80 dollars. That coin currently carries a value of a tiny fraction of a penny. If that value rises to even one full cent that 80 dollar investment just became 40,000 dollars.
This type of return is convincing a great many folks to jump into the speculation game that actually think they are investing instead of speculating. That coin will most likely not even reach half a penny. Not all cryptos are Bitcoins, most are worthless and will always be worthless. Some are simple financial tokens passed around cellular networks when purchases on those networks are made. They are very local to that specific cellular network. The new ones are being created out of thin air literally and should be approached with great caution.
The End of FIAT Currency is Nigh?
One should not fear change, especially when you can see it coming. This change is no different.
The end of FIAT currency may be nigh, but the end of government control of money and monetary policies is in no danger of going away any time soon. There will be crypto currencies but they will be national ones.
The 4th Industrial Revolution calls for the coming together of emerging technologies in areas of artificial intelligence, engineering and manufacturing, medicine and virtually every other area of our societies. Cryptocurrencies are what that looks like in the financial world but the financial world has always been under control and always will be.
Further research and Information
- Cryptocurrency exchange - Wikipedia
A description of what a cryptocurrency exchange is
- What Is Cryptocurrency? Beginners Guide to Digital Cash - NerdWallet
Like real currencies, cryptocurrencies allow their owners to buy goods and services, or to trade them for profit. Here's more about what cryptocurrency is, how to buy it and how to protect yourself.
This content reflects the personal opinions of the author. It is accurate and true to the best of the author’s knowledge and should not be substituted for impartial fact or advice in legal, political, or personal matters.
© 2021 Robin Olsen