Currency has been the lifeblood of an economy since the time of ancient empires. The entire system of this world is based on currency. There had been many names given to currency before it was correctly introduced. The barter system was also based on a currency – the only difference was that the currency was linked to objects.
"Any time a country transitioned to a fiat currency, they collapsed. That's just world history; you don't have to know about cryptocurrency to know that." - Nipsey Hussle.
With evolution, currency switched from objects and started being based on a piece of paper. Today, we have many names for this currency. But the most commonly known name for currency is known as 'money.' Currency has always been an instrument of power for the political class in the past, and it appears to be the same case to this very day. Currency is like a game of business for elites of their nations.
The Romans had minted, whereas the United States FED had printed. The consequence has been the same both times. No matter what you do, mint it or print it, the money supply gets manipulated and debased in the end. Let's take a look at the previous emperor's as an example.
Emperor Augustus created a Central Coin System in Rome, and it became the master currency in the region. But Augustus flooded the empire with too many coins without realizing what kind of results it would produce for his people. A historian named Max Shapiro wrote down the impact of switching to the Central Coin System in Rome. He wrote, "The volume of money he (Augustus) had issued in the three decades between 27 BC and 6 AD was more than ten times the amount issued by his predecessors in the twenty years before." Of course, prices soared due to this system, and it became difficult for an average person to survive through this. Roman coins were first produced in the late 4th century BCE in Italy. Roman coins were the first coins to be produced in the world. It continued to be minted for another eight centuries throughout the entire empire. The denominations and values were constantly changing as certain types of sestertii and denarii persisted. Roman coins are ranked among the most famous coins in the history of this world.
Central Coin System
Emperor Augustus introduced the Central Coin system to make things easier for his people. He wanted to bring the barter system to an end, but this idea only ended up backfiring on him. To make matters worse, successive emperors diluted the amount of gold and silver in the coins. The currency immediately fell as a result. The dilution of gold and silver from these coins continued until Emperor Constans I diminished the nummus, known as a monetary unit, to 0.4 percent silver only and 196 coins per pound in 341 CE. However, it was already too late, and the damage had been done. Despite Emperor Constans I efforts to diminish the damage, the Roman Empire had fallen under huge amounts of debt. The monetary system had long collapsed, and inflation continued to spiral out of control for generations upon generation. This only caused more poverty and a decline in the state. Many Romans ultimately decided to flee the country to seek better opportunities outside the country.
Comparing Past with Present
Today, the same thing is going on within the United States of America. The condition of the country parallels to Rome when it comes to monetary manipulation. You would think that we would never make the same mistake of repeating our history, but the declines in currency's purchasing power are happening here, as well. There is inflation in the country, which resulted from chasing more money and not having enough goods. We have to put most of the blame at the feet of the Federal Reserve. It is a mysterious, quasi-private megabank charged with determining how much money is in circulation. It is their job to keep it stable, and yet we are facing hyper-inflation. Even in the 21stcentury, not much has changed when it comes to currency and its problems.
Did you know that the US dollar's buying power has decreased by 97% within the short timeline of the monetary policy imposed in the twentieth century? Experts use all manner of justifications to explain why this is the best of possible worlds. The Federal Reserve stated that it wants to control the inflation going on within the country. However, it also manipulates the price of credits without anyone even noticing it. It has become easier to print money in the United States of America because the US dollar has been divorced from the gold and silver standards. No one knows why President Richard Nixon in 1971 decided to end dollar convertibility to gold and implement wage/price controls. The external intentions were to somehow address the international dilemma of a foreseeable gold run and the problem of inflation within the United States. We do not know whether or not it has been this way for true monetary "stimulus" or, as some say, to benefit cronies on Wall Street. There has been a scant incentive to save and too many incentives to spend.
Birth of Bitcoin
In the wake of the 2007 and 2008 financial crises, a group of subversive software developers were done with this kind of inflation. In Bitcoins genesis block, someone coded a London Times headlines from January 3, 2009: "Chancellor on the brink of the Second Bailout for Banks" in the first-ever recording of a fact on the Bitcoin Blockchain.
We don't know who the pseudonymous was, but we do know they were heavily associated with a group of theorists. This group included many cryptographers and Cypherpunks that included Hal Finney, Wei Dai, and Nick Szabo. For all we know, one or all of these could have been Satoshi Nakamoto. In 2008, Nakamoto presented the Bitcoin white paper to the world.
And so he pressed ENTER
Satoshi started the Bitcoin system by describing public and private key systems that allowed parties to transact. But, to prevent double-spending, there had to be a way to time-stamp the event. There had to be a way to ensure its fidelity system since it would be used widely. Collections of time-stamped items were known as blocks. These blocks would form a chain-event, which is known by all today. It was introduced as a blockchain, and several people around the world widely use it. To make it safer, they added more layers of computer science and cryptography and a verification system known as "proof of work." The world had the specs for the world's first digital currency when this event took place. It had become widely known by people as the information spread across the globe like wildfire. Bitcoin was only the beginning of a revolution to come...
Introduction to Digital Currency
Ultimately, a new idea of digital currency was introduced. The world never imagined that the digital technology used for recording, replicating, and global sharing of data across people and devices could also be used for transitioning data when it comes to Bitcoins. The only difference was that it would be nearly impossible to alter, censor, or fabricate because there is no central warehousing of the data. In Bitcoin, the concept of a distributed ledger is a given expression. However, Bitcoin is not just about transmitting and receiving digital funds. The entire transaction network was designed to resist interference in data. It provides a path between two parties that does not include central banks and financial intermediaries. The smart contract idea lay somewhere in there, waiting for the General Public to apply to the everyday world.
One of the fantastic things is that this cryptocurrency was unveiled to the world with unfathomable features and properties. Things like storing recourses securely, transmitting resources everywhere and at any time seemed like a good thing. The introduction of Bitcoin was the best way of avoiding intermediaries, such as central banks. It was also one of the best ways of preventing manipulation, such as currency inflation. Bitcoin allowed people all over the world to avoid the storage and security costs of gold. It helped in avoiding the devaluation of the currency and the general reliance on financial institutions that cannot always be trusted.
In a way, you can say that we have entered a new age that cannot be unwritten or reversed at all.
Satoshi planted a seed by introducing bitcoin, and this seed will continue to blossom for millennia in the coming years. We have entered a new psychological paradigm that has been initiated by Satoshi. This paradigm will not end with him, but we - the people will continue it.
Cryptocurrency properties need to be placed according to human wants and needs. Indeed, most cryptocurrencies are actually deflationary. If a currency is deflationary, then that means you cannot simply create more of them. If more people buy cryptocurrency, then their purchasing powers will go up, not down. There is still a lot of time for more people to acquire cryptocurrency. Rapid adoption resembles an S curve. This means that the price of cryptocurrencies will be stabilized once it penetrates the global market.
But even as these cryptos increase in value in their uptake phase, more and more people will prefer them over fiat currencies. One of the main reasons why they will choose cryptocurrency over fiat currencies is because fiat currencies have lost their value over time. One of the perks of this is that the rapid adoption of cryptocurrencies could weaken central banking systems used by the masses.
According to Hayek:
"The only way to return to sound money is to take it out of the hands of the government. This money would not require any permission and no central "authority." Further, it would increase the opportunity for any bank located in these countries to open branches in any other on the same terms as established banks."
There is no way Hayek could have foreseen Bitcoin's arrival when he gave his statements. Nor did he consider the threat this international currency movement would bring if it is not carried out by law but by network design. He did not predict that distributed-ledger accounting would be transparent and automatic to everyone worldwide. The possibilities are endless when Bitcoins were first introduced in the world. However, the currency we use today is just the latest version of currency that had been imagined by our predecessors. Who knows what kind of currency we will use in the future? Hopefully, whatever currency we employ in the future will defeat the inflation faced by the global economy.