Basic cryptoeconomics

in cryptocurrency •  7 years ago 

To understand what powers cryptocurrencies, you must understand what powers decentralized organizations. All cryptocurrencies are the common denominator of a decentralized organization.
So, you need to ask, what does the organization provide?

For bitcoin, it provides a couple features, that other organizations like companies provide. For example wiring money is a service that people pay for. Being able to wire it in under 30 minutes is another service people pay for. And lastly, being able to wire it anywhere in the world is a service that is very expensive normally in some conditions.

That means that these decentralized organizations are providing value. This means that they have use cases. And users. And this is where it gets interesting. Those user transactions are a constant froth of value that is swelling up and down creating your baseline market. As people invest in the market, and the market cap grows, the more basic bread and butter froth transactions can be handled. That means investment in bitcoin increases the baseline froth rate.

Also, every transaction is paid in bitcoin. Those fees that people would normally pay to organizations are paid instead to the value of the bitcoin, not to a company or a ceo. That means that bitcoin is both a stock, and a currency. It is a directly democratized company. Every other cryptocurrency that focuses on money transactions is just like this. This is where bitcoin's value arises from. Bitcoin will kill the US dollar and the fed, eventually.

It will mean an end to the keynesian economics of pulling growth forward from the future via inflation. it will mean an end to the bubbles of credit and liquidity. It will mean a return to a sane economy where people live within their means, and where the value of currency is not degraded by the government printing money. It will mean an end to an unauditable federal government. It will mean an end to corruption as all transactions become publicly auditable. It will mean an end to secret influence. It will mean an end to corruption. It is the end of this world's monetary supply, and it will become the backbone to a new financial system where it is impossible to secretly consolidate monetary power into the hands of the few to rule the many. And it will mean the end of the big bank bailouts and the banking class.

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