How to ‘force’ a winner in the race for decentralized money.
Blockchain technology has the potential to replace most things we do online with distributed alternatives that are not owned by any one entity or company (think a social media platform where user’s data is stored on the blockchain instead of on facebook’s servers).
However, no one crypto has yet established itself as a true, widely used replacement for fiat money, despite this being the first imagined used case for the technology.
Bitcoin — the first and most famous cryptocurrency — will likely become an alternative (replacement?) to gold. Today, gold is not used to buy coffee or pay employees. Instead, it functions as a way of storing value. Natural scarcity, it’s physical properties and the fact that it has been used for this purpose for 3000 years make gold the world’s premier store of value. (the total amount of gold in the world is estimated to be worth north of $7 trillion, more than the 10 most valuable companies in the world combined).
The second most valuable cryptocurrency — Ethereum — is “the world’s leading programmable blockchain” according to it’s website. As such, ethereum is a positioned to become the infrastructure upon which decentralized apps (games, marketplaces, etc) are built.
This paradigm leaves an obvious, mostly unfilled space for a cryptocurrency to become money as we use it today. Bitcoin cash and Facebook’s Libra are attempts, but there hasn’t been a clear winner — yet.
The idea that is outlined next was first mentioned by Naval Ravikant (entrepreneur and investor) in a New Zealand event.
A country of considerable size and importance would chose a cryptocurrency that had robust technology and a decent, not too high market cap (say, anywhere from the 7th to the 20th most valuable cryptos). The perfect candidate would be a sufficiently large economy, yet not a superpower (think Canada, Singapore, etc)
Then, as secretly as possible in such a situation, the state would buy a significant percentage of all existing supply of the chosen coin (say, 50%, which could be done with $1 billion or even less).
Soon after, it would announce that over the next ten years, the economy would transition: taxes and salaries could be paid, bonds issued and loans given, all using the cryptocurrency picked.
If such a project went smoothly, a significant country running it’s economy on the chosen coin would most likely position it to become the premier, blockchain-based replacement to fiat money as more and more foreign companies and individuals started using it (to do business with our nation or just because it was the most credible cryptocurrency out there).
If this cryptocurrency, because of the aforementioned plan, became the winner in the race for decentralized money, it’s value would increase by many fold, making this state (and it’s citizens because they were first adopters) incredibly wealthy.
Published at Tue, 20 Aug 2019 15:48:34 +0000
Bitcoin Pic Of The Moment
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By trendingtopics on 2019-03-29 12:03:07
