A Thing Satoshi Nakamoto Knew that Venture Capitalists Have Misunderstood

in crypto •  7 years ago  (edited)

Satoshi Nakamoto has stated the following:

“The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust. Banks must be trusted to hold our money and transfer it electronically, but they lend it out in waves of credit bubbles with barely a fraction in reserve. We have to trust them with our privacy, trust them not to let identity thieves drain our accounts. Their massive overhead costs make micropayments impossible.”

His point is extremely clear. The root problem with money is trust which is required to make money work, while blockchain is the solution for this problem. In other words, bitcoin is intended to be a tool to change thr way how the monetary institutions issuing money claim their legitimacy. All the rest is secondary.

Nevertheless, if you listen to venture capitalists (and other financial experts), they try to belittle the social revolution bitcoin has started as a currency, while exaggerating benefits of blockchain as a payment technology. This is not correct.

For instance, yesterday Coinbase had severe issues with Etherium withdrawals. I could not help, but compared this with the conventional British banking system. In UK you can make an online bank transfer which will reach the payee instantly with no transaction fees attached. Ethereum and especially Bitcoin transfers require transaction fees and may take ages to be confirmed.

Hence, blockchain has hardly made money transfers more convenient or secure against bank cards or online bank solutions which are conventionally used.

What has actually happened and what is extremely important is that bitcoin has gained trust as a legitimate, widely recognised currency. Bitcoin has successfully challenged central and fractional reserve banking, which as Satoshi Nakamato noted, regularly breach our trust.

Blockchain has proved itself, first and foremost as a banking licence provided by the public. The ICO boom we see now is a direct consequence of this financial revolution.

This leads to a simple conclusion. Bitcoin and other cryptocurrencies are not bound to be associated with blockchain projects only. The focus should be on bringing cryptocurrencies, as a powerful financial tool, into all aspects of economic life, whether it is a conventionally developed internet service or a brick and mortar business.

Retail chains, restaurants, farming communities, manufacturers, service providers etc can and will issue their tokens soon, creating new opportunities for their customers and shareholders. Expect this.

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