The Future of Digital Currencies


"Ah but it's digital now". "Numeric" a word whose origins are found in the Latin digitalis, from digitus ("finger, toe"); now its use is synonymous with computers and televisions, cameras, music players, watches, etc., etc., etc. But what about digital money or even digital democracy?

The printing press caused a revolution in its time, hailed by many as a democratic force. The books available to the masses were indeed a revolution; and now we also have eBooks and tech devices to read them. The fact that the original words were encoded in digital form and decoded into words electronically does not mean that we have less confidence in the words we read, but we may still prefer the aesthetics of a physical book to a piece of high-tech plastic that must have its battery charged to continue operating. Can digital currencies like bitcoin really contribute to such positive social change in such a spectacular way?

To answer this, we must ask ourselves what is it about money, how to understand it, use it and incorporate it into a sustainable model of a 'world best for all ”. Money, unlike any other form of property, is unique in that it can be used for anything even before an event occurs. It does not imply anything, but can be used for great good or great evil, and yet it is only what it is despite its many manifestations and consequences. It is a unique product but very poorly understood and misused. Money has the simplicity to facilitate buying and selling, and a mathematical complexity as evidenced by the financial markets; and yet there is no notion of egalitarianism, of moral or ethical decision-making. It acts as an autonomous entity, but it is both endogenous and exogenous for the world community. It has no personality and is easily replaceable, but it is treated as a finite resource in the global context, its growth being governed by a complex set of rules that determine how it can behave. However, despite this, the results are never completely predictable and, moreover; a commitment to social justice and an aversion to moral turpitude is not a condition for its use.

In order for a currency to effectively perform the financial functions demanded of it, the intrinsic value of money must be a belief common to those who use it. In November 2013, the US Senate Committee on Homeland Security and Government Affairs recognized that virtual currencies are a legitimate means of payment, an example of which is Bitcoin. Due to the very low transaction fees charged by the “ Bitcoin network '', it offers a very real way of enabling the transfer of funds from migrant workers sending money back to their families without have to pay the high transfer fees currently charged by companies. A European Commission has calculated that if global average remittances by 10% were reduced to 5% (the “ 5×5 & # 39; & # 39; initiative approved by the G20 in 2011), this could lead to a an additional inflow of US $ 17 billion to developing countries; the use of blockchain would reduce these costs to almost zero. These money transfer companies that extract wealth from the system can become disassociated by the use of such infrastructure.

Perhaps the most important point to note about cryptocurrencies is the distributed and decentralized nature of their networks. With the growth of the Internet, we may only see the "tip of the iceberg" when it comes to future innovations that could exploit the undiscovered potential of enabling decentralization, but on a scale until there invisible or unimaginable. So while in the past, when there was a need for a large network, it was only possible to do so using a hierarchical structure; with the consequence of the need to cede the "power" of this network to a small number of people with a majority stake. You could say that Bitcoin represents the decentralization of money and the move to a simple system approach. Bitcoin represents an advance as important as peer-to-peer file sharing and Internet telephony (Skype for example).

There is very little explicit legal regulation produced for digital or virtual currencies, but there is a wide range of existing laws which can apply depending on the country's legal financial framework for: taxation, banking regulation and money transfer, securities regulation, criminal and / or civil law, consumer rights / protection, pension regulation, product and inventory regulation, etc. The two main problems that bitcoin faces are therefore whether it can be considered to be legal tender, and if it is an asset, then it is classified as well. It is common for nation states to explicitly define currency as the legal tender of another nation state (for example, the U.S. dollar), which prevents them from formally recognizing other “ currencies ''. 39; & # 39; as currency. A notable exception to this is Germany, which allows the concept of a "unit of account" which can therefore be used as a form of "private money" and can be used in "multilateral clearing circles" ". In the other circumstance of being considered a property, the obvious difference here is that, unlike property, digital currencies have the ability of divisibility into much smaller amounts. Developed and open economies are generally permissive of digital currencies. The United States has published the highest number of guidance and is strongly represented on the map below. Economies controlled by capital are by definition contentious or hostile. As with many African countries and a few other countries, the subject has not yet been addressed.

Starting from the principles of democratic participation, it is immediately obvious that bitcoin does not satisfy the positive social impact component of such an objective insofar as its value is not that on which it can exercise influence but is subject to market forces. However, any "new" cryptocurrency can offer democratic participation when the virtual currency has different governance and issuance rules based on more socially based democratic principles.

And if a "digital" currency could provide a valid alternative to existing forms of money by playing the role of contributing positively to: objectives of promoting a socially inclusive culture, equal opportunities and promotion of mutualism ; which, as their name suggests, are alternatives and / or complementary to an official or national sovereign currency? Virtual cryptocurrencies such as bitcoin are a new and emerging dynamic in the system; although in their infancy, the pace of innovation in the field of cryptocurrencies had been spectacular.

Many factors determine the "effectiveness" of money to bring about positive social and environmental change; permeating political ideology, the economic environment, the desire of local communities and individuals to seek alternative social outcomes while seeking to maximize economic opportunities, building social capital and well # 39; others. If a local digital currency could be designed to build resilience in a local economy and improve economic performance, an introduction on a broader basis is worth studying. When the current economic system fails to materialize, it manifests itself in a variety of ways: increased social isolation, higher crime rates, physical abandonment, poor health, lack of sense of community, among other undesirable social impacts.

Is the future digital?

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