Since the dawn of time, humans have invented various ways to exchange things for other things. This is how we have managed to diversify our existence. From goods and services, to concepts and ideas.
The earliest form of written language was actually a ledger, one that kept an account of who owed what to whom.
Also in time humans have evolved increasingly complex ways of locking up, storing and securing value that has been accumulated. One of those values in information. The control of information has always been the ultimate way in which economic advantage has been sought and achieved. he or she who knows the speculative value of one item to be higher in one place, and lower in another can accumulate value by simply trading.
The marriage of the two concepts 1) of cryptography - for encoding information in a way that it becomes difficult enough to prevent unlocking by unauthorised parties 2) A ledger that keeps a record of all exchanges of values and therefore is a source of truth has been leveraged into what we call Cryptocurrency.
The struggle it seems, is that a perfectly built idea can still fail to fully bear fruit in the less than ideal conditions created by human greed.
No one could have predicted the events of 2017's mass retail adoption of cryptocurrency and the various things that happened as a result of what is called 'forking'.
The aftermath of alt-coins and ICOs (a crypto equivalent to IPO's) that then began to shift the market in an unprecedented way. In turn, revealing the greatest weakness in the concept which was to free people from the need for a third party to validate trust, was the unscrupulous theft of cryptocurrency through the hacking of exchanges, the weakest link in the chain: When you can't hack the ledger, just hack the place where people exchange their value or better, create an online marketplace and then pull out the rug from under them without a trace. The lack of regulation that lead to the creation of a new concept also lead partially to somewhat of it's demise.
"Ideas are bullet proof" V for Vendetta, but add to this situation, a slew of new regulatory controls based on redundant technologies, numerous laws based on outdated concepts and you have recipe for an idea killer.
That may be the case but for crypto-currency, the journey has changed dynamically.
In the case of crypto-currency, the decentralisation aspects have been challenged by a few things of note:
1) Trading companies creating a market that is in addition to private trading - adding risk during exchange as currency must sit on am exchange to be traded. Major loophole - many exchanges have been hacked and millions in funds lost as explained above.
2) Traders and their behaviour, the media and people's social posts creating FOMO or the opposite (Panic sales) and the capability of holders of large amounts of currency to manipulate the market by buying and dumping crypto for other currencies such as fiat ($US for example) during times of low liquidity. The fluctuations allow scalping and the losses for smaller traders are big.
3) Betting on market through leveraging - gambling and manipulation combined enables big investors to scalp large sums off unwitting traders who have set up bets online eg. Bitmex
4) Centralised chains - XRP as just one example of how decentralization of currency can still be thwarted by banks who wish to create their own centralised currency.
5) Low transaction capabilities of most coin except alt coins designed to overcome this mean Bitcoin has to evolve or become quite redundant for one of its core purposes as a exchange of value and instead simply become a store of value. People can no longer quickly trade BTC.
Crypto is a constantly.changing field of interest. Best to keep an eye on and high risk for investors.
You'll read many articles about it, so this will only serve as an introduction to part of the revolution that is happening with finances.
So how can we support and or create Decentralised Networks?
One of the key points here is trust. We need to trust each other, but most of all we need to no longer have issues of trust - a truth that is undeniable, supported by technology that backs it.
In other words, we need to switch over to taking responsibility of our own value instead of handing it to third parties like Banks. To do this, technology must be adapted to be accessible by the common person. Somewhere along the way, the increase in simplicity of tech use, the increasing complexity of thwarting that tech through hacking (such that it's not worth it must cross with mass adoption of the method) - we are just going to have to get a little bit more tech saavvy.
This is not financial advice - do not invest more than you'er prepared to lose. However, if wee aren't prepare to take a leap of faith to lose it all to gain everything on the other side, then it won't take off. Whatever you do, make sure you research it and that it is indeed truly decentralised.
The crypto-revolution has already begun, quantum computing is already here and hence it is only a matter of time. This is evident from the mass adoption by even larger financial institutions and support for trading by governments world wide. Despite the popularity having degraded the original purposes of crypto technology, it still develops and will be interesting to watch over the next 50-100 years.
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