First, do you know what the decentralized economy is? In this system, the state and government organizations do not play a significant role in the economy, but its stability depends on supply and demand. Cryptocurrencies are part of this type of economy, while they are also boosting it.
Therefore, in this post we will share with you the role of cryptocurrencies in the decentralized economy and why they are an advantage for the system.
The characteristics of a decentralized economy
The philosophy of this system forces us, for a moment, to unleash ourselves from the traditional assumption of central banks and their credit regulation. But there are many other significant features:
- The vast part of the goods and services are in the hands of private companies.
- There is little government intervention in the market.
- Decisions are made based on a group of trained officials.
- There is a close relationship with the market economy.
- Public spending is significantly reduced.
However, bank decentralization has come as a gateway to all those companies without access to financial resources, favoring decentralized economies. In addition, cryptocurrencies have a lot to do with this.
Cryptocurrencies in the decentralized economy
Since the creation of the first cryptocurrency in 2009, many things have happened: thousands of virtual currencies have been created, companies have started to include them as a form of payment, etc. There are still those who believe that it was an initiative created in response to the financial crisis that we experienced in those years.
It is said that in a short time a true decentralized economy can occur, where cryptocurrencies will play a decisive role. And the rapid creation of decentralized networks has undoubtedly left a room for the creation of a true decentralized economy. If we add to all this the value of cryptocurrencies along with the blockchain technology, we see that a significant value economy is being generated. The proliferation of this technology is showing that it really makes sense to think of economic models that work in a decentralized way.
Trust is no longer in central banks or governments, but in the mathematical rules of blockchain. Decentralization does not have a central ecosystem that controls everything, but each user owns their own money. No one dictates. No one's above, or below. Each person has their place and is free to exchange value in the form of cryptocurrencies in a comfortable, instant, secure and transparent way.
In short, we can say that these virtual currencies can lead the way to a decentralized economy.
Buy cryptocurrencies to further foster the decentralized economy
New technologies have impacted people's lives in many ways, and the financial system could not escape from this situation. Not only cryptocurrencies have transformed the way we interact with the world, but they have also brought us endless possibilities, easy acquisition, independence of intermediaries, privacy, acceptance as a means of payment, etc.
From this side, buying cryptocurrencies is possible thanks to exchange offices, bank accounts, buying from other users, and even through ATMs. Do you have a virtual wallet? Although there is not a widespread culture in the use of electronic money, cryptocurrencies are gradually gaining ground in their development.
So much so that there are now more than 2500 cryptocurrencies, and large companies such as KFC or Subway have already accepted them as a means of payment for their products.
Changes in the global economy
The changes that cryptocurrencies are making in the global economy reveal that cryptocurrencies are not exempt from taxes and financial fees for now:
- Facilitate international transactions thanks to the blockchain (with it you can access at any time to verify the registration of transactions).
- They are pseudo-anonymous (traceable) operations.
- They are completely decoupled from the banks.
- Do not require permission, can do operations instantly, transparent resilient and programmable.
However, the great changes that the world economy is undergoing are evolving at high speed, and decentralization is not the only one that have emerged. Collaborative economies, such as Uber and Air B&B, have also appeared projecting an innovative idea.
Conclusions on the role of cryptocurrencies in the economy
There is something that blockchain technology has left us, and it is the possibility of owning our own money, without intermediaries, without interest, and promoting the Internet of value. Today's society almost forces us to have a bank account, since it is the easiest way to get financing to buy us a house, a car, etc.
This means that we have to give some of our money to an intermediary to be in line with the traditional economic system. However, with cryptocurrencies, all the inhabitants of the world can be their own bank (store their virtual currencies), regarding of any political or geographic boundaries.
This initiative can be the ultimate solution for those companies and countries without access to financial resources. They can't get funding if they need it, or access a banking branch, because there aren't. In Latin America, the emergence of cryptocurrencies has been a revolution, and many agricultural entrepreneurs who could not access to funding can now do so.