The Age of Crypto-Economics
The last global financial crisis took place in 2008-2009. There were many reasons for it. The most important reason was the greed of the banking or financing sector of the USA. The banking sector had taken huge risks and finally, the global economy entered into a recession. So, people have lost faith in the financial sector. This can be illustrated by the Occupy Wall Street Movement in the USA in 2011-12.
This raised a simple question: What options do people have if banks are not to be trusted? A man named Satoshi Nakamoto provided an answer. The answer is Bitcoin. Bitcoin is not a currency like $ or rupee. It is based on blockchain technology.
There are many reservations regarding bitcoin. According to Warren Buffett, bitcoin has no intrinsic value like gold or silver. The second reservation is that Bitcoin is just a coding of numbers in the computer system. Thus, though there are many reservations about Bitcoin, it is considered to be a peer-to-peer, trustless electronic cash system based on technology called blockchain.
A major reason seasoned speculators or investors find Bitcoin irresistible is its deflationary nature. Since there can only be 21 million bitcoins, it cannot suffer a loss in value due to inflation. At present, all the governments of the world issue coins/currency, we call it fiat currency. The government used to print fiat currency indiscriminately. This led to a decline in the value of fiat currency. In this regard, cryptocurrencies like bitcoin may herald the next stage to store money/currency or wealth. The privatization of currency and disciplining the state by reducing fiat currency into one of the many competing currencies may remain in the future.
To conclude, though the use of Bitcoin by the common man appears to be a distant future, still, no one knows how the future economy will take shape.