The Thing About Digital Ownership

I’m fascinated by big, abstract economic questions and their implications. Tying current events to big picture stuff is always fun. So I was reading about monetary policies proposed by some countries this morning and something dawned on me.

You know how many years ago folks owned physical coins/precious metals and used that for most of the trading? So back then when, say, gold was diluted in the coins, you felt it – it was kind of like the ancient version of inflation.

In the last century we moved to the debt-based system, where Central Banks and governments can print currency and essentially conjure value into existence under the premise that future productivity will pay this printing off. We call this debt-based money fiat currency.

You don’t really “feel” it in the same way.
Most of this stuff is very abstract and beyond your control or even imagination. If the authorities want to close or investigate your bank account, they just do it. Your transactions can be denied for any reason, merchant accounts frozen, access to funds restricted, etc. You need implicit permission of others to own your money.

Cryptocurrencies flip this stuff
And I don’t mean to sound like one of those evangelist guys, I actually mean this stuff – these are not buzzwords.

Think about it: we hear a lot about government “crackdowns” on cryptocurrencies and regulations and all that stuff. The funny thing, though? Everyone feels it again, the market is going nuts because of it.

You need to physically get in there and get someone’s key in order to stop them from making transactions. Or, if you are dealing with them, you on an individual level have to stop the deal and nobody can come in and stop it for you. No credit card company, no bank, no government.

We’re back to that same concept of trading with coins again. You are the guy or gal who gives permission, you don’t need to receive one to have access to your funds.

This is why we hear so many news about crypto regulations and all that. You cannot do regulations quietly, it’s basically like coming down into someone’s house and digging through their safe. People notice. Neighbours notice.

And when they notice, they talk about it. So, say, when something is being discussed in Congress, you know what it’s going to do to your crypto-wallet, because you “feel” it.

The Takeaway
This stuff is not abstract anymore. We rarely talk about this, yet it’s is the paradigm shift that Bitcoin and other cryptos bring to the table. It’s about owning your assets in a real, tangible, traceable way where no other party has access to them without a certain degree of your permission.

And if they don’t have it, they have to use direct violence or fraud to get access to your stuff. All’s down to an individual level, you can’t collectively control or restrict this kind of currency.

So when you hear news about regulations affecting the price of crypto or something next time, think back on this article and soak in the new perspective – there are different levels of power at play.

The future is an exciting place to live in.