The Dangers of Cryptocurrency to our Economic Systems Essays

The Dangers of Cryptocurrency to our Economic Systems Essays

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Cryptocurrency, such as Bitcoin, has brought in a lot of media attention over the past few months and has been raising eyebrows within government agencies worldwide. Here’s why: Appropriately constructed, cryptocurrency could potentially upend our established global economic system. This newfound technology poses as a serious threat to our currency-issuing central banks and also to the global financial intermediaries. To truly understand the changes that cryptocurrency could potentially bring, you will need to have a general understanding of our current economic system.

Financial markets as we know them were arguably started in the 14th century by Venetian merchants tied to the moneylenders - the bankers of their time. They basically bought high-risk, high-interest loans or exchanged them for other loans with other lenders. The first real stock exchange can be linked to Antwerp in 1531 to deal in loans, government, and individual debt. By the 1600’s, all the East India trading companies started to spring up under different countries. Individuals would invest in these voyages, thus creating the first futures markets. It was a risky investment, considering storms, pirates, and the other dangers of a long ocean voyage over relatively unknown seas, but if the ship you invested in came back with full holds then you were pretty much set for life. However, actual exchanges were not established until later. The first was set up in London in 1773, but it was restricted by laws that restricted shares to whom shares could be sold and at what rate they were taxed. Nineteen years later it was followed by the New York Stock Exchange.

Markets back then were a little different than they are now. Today, our monetary policy is linked to Keyne...

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...are a boon for democracy. Cryptocurrency not only allows us to have financial freedom, but also promotes the freedom of information we’ve become so accustomed to. WikiLeaks, for example, recently revealed that the majority of donations they receive are in the form of cryptocurrency.

As crytocurrency becomes more accepted throughout the world, so are the principals and ideals connected with it. It advocates and spreads the thought of putting power back into the hands of the people through its decentralization and open collaboration properties. These properties as well as the platform’s openness have made many economic innovations possible. The idea that currency should be for the people, by the people, has influenced people to start new systems that put power back in our hands. I believe that this is why cryptocurrency has, and will continue, to change the world.

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