Cryptocurrencies, monetary revolution underway? – In recent years, these digital currencies, long considered a passing fantasy, even a joke by traditional market players and the general public, have begun to reveal the full extent of their value proposition. As in any revolution, once the ridiculous and dangerous phases have been overcome, the phase of the proof. Obviously for Bitcoin, Ethereum and cryptocurrencies that could, like the Internet, establish themselves in our societies in the long run. Bearer of a revolution in progress. Why ? Under what conditions? Is it really possible? Let’s try to look into the matter.
The value proposition of cryptocurrencies
Feedback on technology adoption
The adoption curve for a new technology is always slow and steep to begin with. All time. Just take the example of the radio, the car, the television, the smartphone or the Internet. Everyone is technologies evident today. Even for some without whom today it would be very difficult to live in our world. That is to say how revolutionary, transformative, capable of moving humanity from one era to another. However, they were all heavily criticized at first, deemed grotesque, unnecessary, even harmful. In fact, they were confronted with an already consolidated model of society that had no intention of letting itself be upset without reacting.
But once their value proposition is understood by the general public, adoption is skyrocketing, parabolic. As the S curves shown in the graph below.
Such changes are claimed by Bitcoin and cryptocurrencies. And this time they face the most powerful narrative of all. the monetary power of states. Difficult to bend, even in front of the evidence, the most powerful entities of our world. Elite who, in addition to obvious conflicts of interest, have barricaded themselves behind a thought system the antithesis of Bitcoin’s value proposition.
Only it is clear that for each of these revolutions, the individual is made to be irredeemably driven towards the adoption of the most efficient, most useful technology. The car ended up being adopted, as did TV and the internet. The same is probably true for Bitcoin and cryptocurrencies. But why? So what is this value proposition, this utility that didn’t exist before?
Bitcoin and cryptocurrencies, another way of looking at money
bitcoin is a medium of peer-to-peer exchange without intermediaries. There is no need for a bank to make the interface. You can literally send millions of dollars across the planet in minutes or even seconds via the Lightning network, at a lower cost. This is impossible to do through our traditional financial system. Such technology did not exist before Bitcoin.
Bitcoin and cryptocurrencies are also the means for everyone have your own money. Other than the physical note and coins, there is no other way for an individual to dispose of their money. And hiding millions of bills under the mattress is impractical. Additionally, physical currency tends to become scarce and will likely eventually disappear in favor fully digital via the e-euro typically. And who says digital, says controlled by banks.
Simple question: do you still pay for your baguette with coins? Where do you use your credit card? Going back a few years, paying for bread by card would have seemed absurd to the baker, or would have been refused altogether. “If it’s under 10 euros, we don’t take the card,” he replied. Today it is commonplace. This normality will gradually make paper money disappear in favor of digital money.
However, cryptocurrencies are the only way to have your own digital currency and do whatever you want with it. This currency is easily stored and transportable on digital wallets or hardware wallets like a ledger key. Your money is protected by a password that only you have. So nobody is able to freeze your funds.
The banking monopoly problem
This is not the case in a bank. To understand this, it is sufficient to note the number of supporting documents required as soon as the transfers involve amounts exceeding certain thresholds. During operations of significant amount, the bank is not stingy with questions about the details before carrying out or not the operation. Yet it is our money, earned with our work. In what capacity should the bank assume the right to control what one wants to do with it? Many people have had their bank transfers rejected to cryptocurrency exchanges like Binance. But, after all, if they want to invest in this sector, why stop them?
The truth, while counterintuitive, is simple enough. Money deposited in the bank, it’s not really your money. This is an acknowledgment of the bank’s debt in your favor. It is therefore up to you to choose whether you want to acknowledge it or not.
There are many cases around the world of bank failures that have taken their customers’ savings with them. France is not immune to experiencing similar situations one day. Plus, if everything is digital, nothing could be easier for the bank than blocking your transactions for one reason or another. For not having been a good citizen in the eyes of the state, for example. We would then lean towards a dangerous totalitarianism.
Bitcoin and cryptocurrencies, the upheavals to come
Bitcoin, a last resort for many people
L’mass adoption of cryptocurrencies, reflected in the S-curve wave presented earlier in this article, has not yet taken place. It will probably be driven by the dissemination within society of concrete use cases and simple and practical means of access. These use cases have not yet arrived in Europe because our countries’ monetary system remains robust. The euro, whatever one may say, remains a strong currency on a global scale for the time being.
However, this is not the case in many other regions, for example in Latin America or Africa, which are subject to aa maddening hyperinflation. Venezuela, Argentina, Nigeria… In these countries, cryptocurrencies, and especially Bitcoin, are developing at breakneck speed. unbanked to trying to save their savings from a devalued currency Faster and faster. Compared to this dizzying rate of loss in value, Bitcoin’s volatility looks laughable. A volatility that will tend downwards as the market capitalization of Bitcoin increases. All caps being equal, there’s no real reason why Bitcoin is more volatile than gold.
All you need to own Bitcoin is a smartphone, the most common object on the planet. Much more than a bank account that many people don’t have. Bitcoin provides a concrete solution to these populations to safeguard their savings and carry out transactions.
Cryptos, a matter of generation
Postwar baby boomers are often against the millennial perspective on the issue of technology. Millennials are generations X, Y and Z. Generation X born from 1965 to 1989. Generation Y from 1980 to 2000. And generation Z after the 2000s. The latter, Y and Z were born with technology and the Internet. For Gen Z in particular, digital is the norm, so it’s no wonder they’re embracing cryptocurrencies so easily and moving their money to the internet.
These new generations love cryptocurrencies and will no doubt have no difficulty in adopting them. And they are actually doing it. Only, for the time being, financial power is in the hands of recalcitrant baby boomers opposes it with all its might to this adoption. But now, the time of the baby boomers is soon over. The handover between the old and the new generation will happen inexorably. And this new generation will be the one who tomorrow he will be at the helm of the company. There is no doubt then that cryptocurrencies, if their value proposition is recognized, will experience the boom that is rightfully theirs.
The threat to Bitcoin, cryptocurrencies and Europe
The risk is multiple because the stakes in adopting this new technology are colossal. The risk is on the side of this young and booming sector, cryptocurrencies. But he is also on the side of Europe and its capabilities – or his inability – maintain a position of geopolitical and technological leader on the world stage.
One geopolitical risk for Europe First of all. Because like in the 90s when it refused to make the breakthrough on the internet, it risks repeating the same mistakes with cryptocurrencies. It would therefore significantly lag behind the competition in the development of this technology. This, despite the many start-ups already present in the area and about to become so future giants of tomorrow.
One risk of cryptocurrency failure too, as well. If states decide in a global spirit to unite to ban cryptocurrencies in order to safeguard their monetary sovereignty, Bitcoin is likely to suffer a major blow. However, this does not seem to be the direction taken in recent years. Governments are moving towards regulation rather than prohibition.
The problems behind the regulation of cryptocurrencies
On the other hand, this regulation may initially be too restrictive, especially in Europe. The countries that will have regulated too hard and too hastily the cryptocurrency sector will be surpassed technologically by their more flexible neighbors. Lagging behind the competition, they will inevitably have to revise their copy. But they will probably realize this too late, as with the Internet.
The risk for Europe would be to kill everyone future giants that could boost its economy. These startups will be forced to migrate to other countries. But let’s face it, Europe isn’t going to kill cryptocurrencies. With this act they would simply put themselves on the margins of the ecosystem which would continue to grow without them and develop everywhere in the world.
Will cryptocurrencies eventually be adopted? Will they be able to propagate this monetary revolution, this one “Internet of Money” to the whole planet? Or will they be stopped by states that cling with all their might to their monetary power? Nobody knows. But by banning something they previously considered a joke, they will only highlight the correctness of the value proposition of Bitcoin and cryptocurrencies. Only time will tell if, like the internet, these currencies of the future will be able to do that to revolutionize the world.