Historically humans have placed value on all kinds of commodities such as cowrie shells, rice, paper, and even cigarettes in prison. None of these commodities are money in the way we know fiat currency to be. Fiat currency only has value because one central authority decided that it does and then built an entire system around it. If these central authorities were to disappear tomorrow then what would we place value on? If we were to rid ourselves of federal banks, then how would our psychology towards money change. Most societies have strong emotional ties to physical money because of how and what drives its spending.
People have been taught for generations to save their earnings in banks, in exchange, banks promised security and a good return thanks to the interest the bank account holders would earn. On the contrary, the interest rtes offered by banks have been next to nothing, this cupled with rising inflation have led ti the drastic reduction of people’s purchasing power. On top of all this, there are those in the world who are not oart if this economy. The world bank’s global financial inclusion database states that 47% of people in low and middle income countries have bank accounts. The current financial realm is run by inflationary currencies that are backed by debt.
Crypto currencies on the other hand are deflationary in nature. Governments and other central bodies will naturally always try to establish a foothold on their populations. And naturally, citizens not wanting to be controlled will look for ways to trade amongst each other without a cetral party intervening. Poor people who have been disenfranchised by the current economic system will definitely look for ways to exchange since they cannot exchange with wealithy people. The concept of tokens comes in because of this. Tokens are a representative of a particular asset or utility backed on the blockchain. They are slightly less complex to crypto since you only need to slightly modify an open sourced rather than create an entire blockchain from scratch.
The future could be programmable tokens. These tokens may just usher in an era where different entities whether companies or societies can design their own tokens and place whatever exchange value they please on them. The digital decentaralized tokens will in a way mirror value systems of the past such as bartering. In bartering, people placed a certain value on items like cowrie shells, rice and cigarettes without any central entity have a say on the matter. Value of items was not assigned by some central body but rather by a community of peers. Token economics will therefore give value a whole other meaning other than just fiat currency. This could be the beginning of the end for centralized systems of value.
I am a crypto enthusiast based in Nairobi Kenya, who loves investing, research writing, reading, fitness, African food, and soccer.
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