What is the underlying philosophy behind decentralized cryptocurrencies? In a word, democratization of finances, hence their being decentralized. Cryptocurrencies came to remove, in a sense, the middle man of the finance world, banks, and place the power over finances in the hands of the individual. The second point would be to usurp the reach and influence of government backed fiat money, effectively becoming the medium of value exchange for most.
Cryptocurrencies have been called the currencies of the future for many of their innovative qualities.
Evidently, the crypto world is still quite in its infancy, relatively speaking, and this is the time that’ll essentially chart the course it would take, whether to remain true to the core philosophies underlying the creation of the very first one, Bitcoin, or whether it’ll deviate. And so far, a lot of deviation is what’s been happening in the crypto world. The unprecedented rise of cryptocurrencies has opened an era of private-sector controlled finance in a way never seen before. Of course, private banks and money houses have always existed but this is on a different level entirely. For one, private conventional banks use the accepted legal tender created and backed by a government whereas with cryptocurrencies, well, entire currencies are created. And there are quite a number of them.
While bitcoin and it’s copycats may have aimed to achieve democratization of finance, not all have that goal in mind. For many altcoins, the idea can be fairly simple or sometimes oddly specific such as building a currency off a joke or trend and having people trade on it as in the case of memecoins. While the argument for and against crypto use an adoption roars on, with the way the markets look and behave, one would wonder if cryptocurrencies are really money in the actual sense of the word. They could be viewed as a commodity and money, fiat money, is certainly a commodity. However, it feels odd to think that the systems that hope to revolutionize our methods of exchanging value, hold or get their value from the very systems they wish to replace.
But of course, it can’t be helped. Even fiat currencies have their values pegged to some arbitrary thing or another fiat currency even. And today, with numerous coins in the space and the numerous philosophies and use cases backing them, as well as volatility, use for illegal activity and so many other issues, one can’t help but feel that the space is in many ways, confused. Many are in it to get a laugh, others to scam people of their money, while many are genuinely invested in seeing the tech grow.
And so, the space is unruly in some ways, amazing in others. Evidently, as adoption increases beyond interest for profit making in the trading sense, world governments are going to have to step in and really regulate the space which is probably what many crypto enthusiasts do not want. However, it can’t be helped especially seeing that there’s no consortium of sorts or standards laid down across board to really drive some sort of cohesion in the marketplace.