What are cryptocurrencies for?

4 Min Read
745 words

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Usually those who are not familiar with cryptocurrencies usually approach me with the question that gives title to this publication, because on the one hand they are curious about this type of decentralized virtual currencies, and on the other hand they need to find ways to face the economic crisis. I always answer that cryptos serve to set you free.

However, most people see cryptocurrencies as an opportunity to generate income without much effort, as if it were a kind of seed that when sown in a short time will bear fruit. That may be true, but cryptos are more than just a long-term investment waiting for the price to rise relative to fiat currencies, a financialistic view of the true value they represent.

Cryptocurrencies are nothing more than digital money (intangible) that is used in the same way as the so-called fiat, which is the one represented in the well-known banknotes or electronic money (but not digital) which we usually make use of through the well-known debit and credit cards. The fiat money has a particularity: it is issued by an entity or institution called Central Bank which is in charge of printing or issuing the amount of cash units that it believes necessary to dynamize the economy of a country.

The situation is that fiat money has no value, in the sense that this form of currency is backed by absolutely nothing except confidence in the institution that creates and distributes it. But each time the confidence of the people in the institutions or banks that create and distribute the 'conventional' money is diminishing as inflation increases, an element that goes hand in hand with the constant inoculation of fiat currencies in a territory.

On the other hand, we are not a priority, we are the majority of human beings on the planet, therefore every time the colored bills come out of the oven 99% of them go to the kings of society (banks, financial funds, companies, nobility, politicians and military organizations), that is, the 1% that concentrates most of these currencies. What happens next is something perverse, since they use this flow of money to concentrate more and more their power, to be the first to acquire the goods that are revalued over time (gold, real estate, art or cars among others), why, simple, they know that their money is worth, consequently only valuables save their investments.

So, cryptocurrencies, especially decentralized ones, break this macabre vicious circle, offering a world of economic possibilities to users who trust in their proposals. It is true, cryptocurrencies are not backed by anything either, so why trust them, simply because they offer a technology capable of proposing a dynamic economy independent of the influence of any person or central entity.

Unlike fiat money, most of the cryptocurrencies, especially Bitcoin, only have a limit amount of issuance, so there is no way more units will be issued infinitely. Likewise, by lacking a central entity and entrusting the entire process to the technology that protects them (starting with the blockchain), it projects the sense of security that users require as they use these digital currencies, this translates directly into the confidence that makes a person invest in this type of money without hesitation, of course, once they understand what this matter is all about.

But undoubtedly its most important utility is the possibility of managing your economic life under your own planning or strategy, using a currency that has the quality of revaluation over time (anti-inflationary), a virtue that fiat currencies lack. On the other hand, an all-seeing, all-controlling 'Big Brother' does not have the ability to keep an eye on your financial information or get you involved in the endless maelstrom of unpayable debts that the old monetary model entails.

In my particular case, I went from saving or investing in cryptocurrencies (especially BTC) to directly producing digital currencies through content monetization, so it has not been necessary to invest in expensive mining equipment (another alternative to increase your income in cryptos). In this way I dedicate the resources generated through this modality for two situations: 1) to beat inflation 2) to start my own venture, given that it is impossible for small producers to access credit (fiat), given the preference of banks for people with 'better profile' (richer).

So, if you ask me again what are cryptos for, my answer: to make dreams come true that fiat money makes impossible.

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