After posting the article “What is Bitcoin? Complete Guide 2020“, I was left with a doubt. Do people know – or imagine – what the future of Bitcoin is? Have you ever stopped to think about it?
This is a more fundamental analysis. I will talk about the evolution of money over time. The way it was changing. And how we are on the way to change the face of money once again.
People may find it difficult – even impossible – but the future is virtual currencies, yes! Of course it is difficult, there is always a lot of resistance from the most conservative when we want to change their money!
In this text, you will see how it has always been “difficult” to change. And yet, we changed! From seashells to coins today, we’ve changed!
A turn in time
Before you start to understand the future of Bitcoin as money, you need to think … First of all, what is money?
What is money?
In short, money is a way to exchange value! We have used many things like money, ranging from sea shells to precious metals! The most popular money in history was gold. And there are good reasons why gold acts like money:
- Gold is rare;
- It is scarce;
- It is tangible. So, if you have gold in your hand, it’s yours.
Pretty simple isn’t it? And it worked for thousands of years, no matter what the government, king, president or dictator was. The gold just … ruled!
From paper money to the future of Bitcoin
And then a new invention came: paper money! Now imagine someone who has used gold as a form of money their entire lives and suddenly hears:
“Forget your gold, keep it in a safe that this paper here is the same thing, it’s worth the same! “
It must have been very difficult to convince people to leave the precious stones and start using paper money. That’s because at the time, people didn’t even imagine that in the future, it would be Bitcoin! I even imagine the people of that time:
“Trust paper instead of metal? Are you kidding me, right? It can only be!”
Paper money started only as a way of representing gold. For example, the dollar paper was in fact a “gold certificate”. That is, a piece of paper that guarantees your gold reserves. Above all, it ensures that it is kept in a safe in the central treasure.
In other words, we can say that people never trusted paper money. Rather, the government kept their gold and in return, they gave this “gold certificate”.
The introduction of FIAT money
Over time, the US stopped using the “gold standard” during the 1970s. Today, the US dollar is really “fiat” money.
“Whoa, wait a minute! ‘Fiat’ money, but what is this about ‘Fiat’ money?”
“Fiat” is a Latin word for “must be”, which is actually another way of saying:
“Guys, let’s forget about gold. Starting today, this paper you have in your hand is the same as gold. In other words, your paper that says $ 100.00 is really worth $ 100.00, with gold in the safe or not, ok?”
This seems to have worked! Especially because we are using FIAT money every day until today. And we don’t even need to have another type of currency behind it or a precious metal. Fiat money is all the currencies we have today, such as the Dollar, the Euro, the Real, etc.
These days, you have Reais or Euros. However, you don’t need to have gold in the vault to ensure your banknotes have the same value, right?
Advantage of paper money
Fiat money is already a form of digital money. That is, we are seeing numbers, not metals anymore. This makes money much easier to count, manage and move. Banknotes are just to represent money, believe it or not!
What about credit and debit cards? That are so common that we are not even taking notes. We don’t even see the money.
So comes digital money
Money is already digital, many people don’t even remember what a $ 20 bill smells like. But how do banks control it?
The solution that banks use today is a “centralized” solution. That is, they keep a ledger on their computers, which records who owns what. This book makes a record of each operation of each person.
People trust the bank and the bank trusts their machine. Thus, the solution is all in that ledger, inside that bank’s computer.
And Bitcoin? Hey, Bitcoin is DECENTRALIZED!
BITCOIN AND IT’S LEDGER
In 2008, Bitcoin came to claim that a value exists for real. And that it belongs to a person just like banks do – only without having an “owner”. That is: without a bank, without government, without a center.
With his invention, Satoshi showed how you can create a ledger. As long as you don’t have a center or an owner. This ledger for virtual currencies is called: Blockchain. To know more about Blockchain, please read: “What is Blockchain? Explaining this technology“.
This can be confusing or, at best, like Hollywood fiction. How does something that works in thousands of places around the world work at the same time?
You already know the answer to that. And you’re using a solution like this every day, right now to read this text: the Internet. And you didn’t even notice, did you ?!
There are those who find Bitcoin a “madness” or a “bubble” for not having a center or owner. But for these people, suffice it to say that the Internet is like that too. And today we no longer live without our connection.
The Internet is one of the greatest proofs that something distributed and without an owner can work!
WHAT DOES BITCOIN MEAN FOR THE WORLD?
Here, I leave the opinion and vision of Pedro, founder of this site. Your opinion is not about what Bitcoin is, as we already know that. But it’s about what Bitcoin means to the world! And about what the future of Bitcoin will be!
- Bitcoin is not geographic. If economies fall or governments change, Bitcoin will not be affected like fiat currencies.
- It is also much more user friendly on the Internet, which means that global online commerce can improve.
- The biggest point here are the billions of people in Asia, Africa and other places in the world. Who have an internet connection, but who don’t have a bank account or who have horrible banks!
Did you know that more than half of the people in the world do not have a bank account?
In much of Brazil, we can buy online and send money worldwide with the bank. Even though it is very slow and expensive. But in Kenya, for example, people live in great poverty! Banks are not accessible to everyone.
In Argentina and Venezuela, people exchange money on the black market because of inflation! Which makes it impossible to save for a bad day or a nest egg.
Virtual money has no borders. This is what these people need. It works even if your government or banks don’t work.
Bitcoin not only offers a chance to grow the economy, but also in technology. After all, fiat money is just a number in a bank. And it operates in the same way, in the same laws, as it did hundreds of years ago.
Bitcoin was born in the 21st century, which is why it is capable of doing many things. What makes people call Bitcoin “smart money”. And that is why we have “smartphones”! Because they have more features than cell phones a decade ago!
The future of Bitcoin has begun!
We are moving towards the introduction of Bitcoin and cryptocurrencies in the economy. However, people don’t suddenly accept big changes. You have to start putting the news little by little.
Our economy is very old, with very old laws. We need something new. If you think about it, virtual currencies are already being inserted. But as I said, it can’t be all at once!
Take a look at PIX*. Is the Central Bank of Brazil trying to prepare us for digital currencies? You need to create a key to use PIX. It works every day, hour, weekends and holidays, just like the crypto world.
We are being prepared. One change at a time, very small, until we reach the future goal. Then, when everyone is familiar with the PIX, will there not be another change? Like:
“Here we have the cryptocurrency Tether (USDT), which is equal to 1 dollar. You use it just like PIX”.
You see? PIX is a preparation for the future. It is being the middle ground for the future that has started now!
* PIX: in Brazil, it is a new tool for payments and transfers between banks, which works 24/7, even on holidays. Before PIX, all bank transactions were made during business hours, Monday through Friday, except on holidays. This made transactions slow and expensive.
Do you agree with the line of thought of this article? Tell us on social media or here in the comments.