Saturday, April 13, 2024

De-dollarisation dilemma

The global economic system must avoid being dominated by a single currency

– SaNtosh Kalwar writer, author and poet

If anything else, 2024 is going to be a very interesting year.

It comes after four years of roller coaster rides with pandemics, lockdowns, vaccinations, Build Back Better slogans by elites that seem a totalitarian nightmare, more wars … and then a push back.

A series of very implicated lawsuits now all over the world for ‘crimes against humanity’, a gradual loss of credibility against the US dollar and what it represents – a currency colonisation of sorts, the move towards dedollarisation, a fortification against madness by people on the other side of the world who watch with morbid fascination the horrifying control CBDCs and digital IDs are having on China and Belgium.

It’s time to rethink money.

In fact, it’s time to rethink life itself, but let’s start with money first.

We once used to back our currencies against gold. But not anymore.

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Based off a debt-based system born from the Nixon Shock of 1971, the mighty American dollar has wreaked havoc on the world. The USA only has to print more paper and it can pay off all its trillions of debts. Other countries cannot. So how is this system even fair?

Cryptocurrency, built on the decentralised system of cryptographic mathematical puzzle is still a mystery to many. It has been online since 2010, birthing the Web 3.0.

Let’s do a quick comparison.

 The Big One The American Dollar   Bitcoin
Date of InceptionJuly 1971 December 2010
CreatorThe Federal Reserve System (US)   Satoshi Nakamoto (anonymous)
Reason of creationTo secure the dominance of the American Dollar against the growing global discontent of the Bretton Woods “asymmetric financial system”, established after the Second World War, which notably favoured the Western victors.  The free market’s response to the 2008 economic big banks bailouts and the ensuing global recession. A solution of an alternate financial ecosystem that operates beyond the reach of the too-big-to-fail institutions.  
Foundation of valuationThe trustworthiness and credibility of the central banks issuing the legal tender and authorised by government regulations.•     The fixed amount of Bitcoin to be mined.
•     The cryptographic maths puzzles which the miners need to solve in order to be rewarded with Sats.
•     The transparent Blockchain ecosystem and its immutable public ledger.
•     You are your own bank, full ownership and responsibility  
Pros•     Supported by most governments around the world.
•     Accepted and used as the primary medium of exchange.
•     Available in both in digital and physical transaction.
•     Provides governments with flexibility.
•     Price stability.  
•     Hedge against inflation.
•     Fixed amount of 21 million Bitcoins to be mined, absolute scarcity.
•     Low to no transaction fees. *(Depending on the crypto)
•     Based on the ironclad Blockchain system with the self-enforcing and self-executing “smart contracts” on the public ledger.
•     The impossible-to-forge private keys of your wallet and crypto assets serving as the digital signature to mathematically guarantee the validity of the transaction.
•     Decentralised and independent from the meddling hands of central authority, a truly open free market dictated by the demands of the people.
•     Potential big gains since the crypto ecosystem is still in its infancy (like the 90s internet).
•     Pseudo-anonymity of the users (both, pros and cons).
•     Accessible for anyone with an internet connection.
•     The creation of Web 3.0, a new network free from the gatekeepers of the internet.    
Cons•     Not backed by real valuable commodities and entirely based on trust and faith in the institution.
•     Gives central banks total control over the economy.
•     Prone to (hyper)inflation with reckless printing.
•     Creates opportunity for bubbles (i.e. Mortgage crisis of 2007)
•     Easily corruptible and manipulated.      
•     Available only in digital form.
•     Not widely accepted yet
•     Volatility of the prices, no minimum valuation and vice versa.
•     No helpline or customer support. All crypto transactions are irreversible. Losing your private keys will result in losing your access to your investments. (*unless parked on the central exchanges)
•     Little to no regulations from governments. Scammer’s heaven due to the lawlessness of the ecosystem.
Special Moves•     Fractional Reserve Banking
•     Evolution to CBDC to compete with Crypto.  
•     Possibility of making intergenerational wealth.
•     Real financial freedom.  
Criminal Record•     The International Debt Crisis 1982.
•     The Russian Economic Crisis 1992-1997.
•     The Latin American Debt Crisis 1994-2002.
•     The Asian Tiger Economic Crisis 1997-2001.
•     The Global Economic Recession 2007-2009.  
•     The Silk Road Crash 2011.
•     The 2013 Boom & Sell Off.
•     Mount Gox Exchange Hack (February 2014).
•     The 2017 Boom & Sell Off.
•     The 2020 Pandemic Crash.
•     Sam Bankman-Fried (SBF)’s FTX Exchange Fraud (November 2022).  
Other associated currencies•     Every other nation’s currency with the exception of Salvador and other BRICS members•     Ethereum
•     Ripple XRP
•     Litecoin
•     Bitcoin Cash
•     Cardano ADA
•     ChainLink
•     PolkaDot  

Many Asians view crypto as a resistance against the potential implementation of a dystopian social credit system. However, question everything – your critical thinking and independent research are essential for making the right decisions. As Satoshi Nakamoto once wrote in the Bitcoin white paper, “Don’t Trust, Verify.”

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