Some thoughts on the new digital currencies

Avenging the 2008 Crisis

Money is evolving beyond recognition. When Trump became president, many predicted that there would be a trade war between countries, but the world is much more complex than that. Yes, it’s likely that countries will write laws to defend their own interests to the detriment of the internationalizing market tendencies. But countries are not the only ones issuing currency now. There are many private currencies out there, as well as many other forces that do not obey the interests of states and of geography, and they’re exerting their muscles at the expense of the traditional financial establishment. There isn’t an all-out trade war between crypto-currencies and traditional banks, but … in a way, there is (for now). Crypto trading platforms are charging prohibitive fees to people using credit cards to trade, and vice versa–credit card companies are refusing to transact into bitcoins and other alt-coins, and the platforms that use them.

Jamie Dimon, CEO of Chase, for years has publicly expressed disdain for digital currencies. Bankers stand to lose the most, and are realizing that this is their day of reckoning after decades of managed chaos and extraction of wealth in the form of fees and interest from poor and middle-class people into the pockets of the 1% orchestrated by big banks.

Let’s not forget that bitcoin was born in 2009–months after the 2008 financial crisis, and is the brainchild of the anarcho-capitalist/libertarian ideology. Alt-money was conceived as an act of vindictiveness against the banks for the 2008 crisis, when everyday Americans lost about 40 % of their retirement money and many people were seething with anger against the bankers.

We are now entering the third and fourth generation of alt-coins, and some of them–like Ripple and Stellar Lumens–are becoming an almost free and near-instant alternative for international transfers of funds. Traditional banks handle these in three to five business days while charging an expensive wire transfer fee. Now, it can be done within seconds and for pennies. Disruption!

The Devil’s Cash-Stash

Not everything that tries to pass for digital money is crypto-currency, or decentralized.

Trivia: petro is the name that Haitian Voodoo gives to its family of evil spirits. Petro is evil by Voodoo standards … and oil has been called “the devil’s gold”. So why did Venezuela name its new crypto-currency–which is supposedly pegged to the price of its oil–the “petro”? … only to see it rejected by investors!?

The problem with petro is that, no matter how innovative or tech-savvy you dress Venezuela’s oil wealth, people know that oil tends to give power to tyrannical regimes. It’s what keeps Saudi Arabia stable in spite of the awful theocracy that the citizens of the country have to suffer. It’s what keeps the US from imposing sanctions on the Saudi government in spite of too many human rights violations and terror attacks to count. Let’s not forget that Raif Badawi is still in jail for blogging. The power that comes from oil is what makes #FreeRaif a thing, unfortunately.

Building a Content Economy

This is the most exciting aspect of the crypto economy for me, as a content creator who has for years struggled to earn a decent income from freelance writing. Patreon was somewhat disruptive, but now blockchain technology is birthing companies that are likely to create a significant paradigm shift in industries other than banking.

I am looking forward to the potential success of both Narrative and Gilgamesh–which will test Amazon’s monopoly on self-publishing and help the little guy profit from his content by removing the middle guy and and reducing the publishing industry to a minimum. Both companies are raising money through ICO’s (“initial coin offerings”) and will incorporate built-in incentives in their native coins for people who are wholesome contributors to their content economy on their future online platforms.

It’s possible that–as happened with the dot com bubble–many of these new companies won’t be around in, say, five or six years. But if Ripple, Stellar, and Gilgamesh are still around, or if we have at least a dozen new companies inspired in their models, they will have definitely made the world a much better place.

About hiramcrespo

Hiram Crespo is the author of 'Tending the Epicurean Garden' (Humanist Press, 2014) and 'How to Live a Good Life' (Penguin Random House, 2020), and founder of He's also written for The Humanist, Eidolon, Occupy, The New Humanism, The Secular Web, Europa Laica, AteístasPR, and many other outlets.
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