We are living in an era of crypto currencies and block chain technology where companies like diffinity are bringing new solutions that are so promising and worth your time and money.
This is not financial advice by any means nor is it a financial blog but right now we all know and start to get our hands on crypto, but how does crypto work and what promising future it shows?.
Can it change how governments are working and bring transparency in the system? Or maybe it can remove the whole concept of corruption from a democratic society .Let’s know how.
Lets understand blockchain in layman terms.
Well you can look blockchain as a database well this data base well as you can understand by the name blockchain its kind of like a chain made up of blocks in which each block contains the timestamp(The time proof of work done), the cryptographic hash(in layman terms its a encrypted message which cannot be inverted or deleted.) and transaction data(Financial orders, invoices, payments , plans, activity records,Logistic data etc).
Once the data is recorded in a block it contains the hash of previous block and hence get linked to the previous block making it reinforced and impossible to edit ,tamper or delete. If anyone attempts to tamper he/she needs to tamper every block in the whole chain which is not feasible.
Enough for the basic understanding we will not go in details although block chain is a complex architecture and can take time to understand fully but for now we know it can store data which cannot be altered.
But how can it end corruption and why is it going to be the future?.
Blockchain has a range of qualities, like tamper proofing and permanent databases and record-keeping, that can help tackle government corruption.
Well transactions made by governing parties will be available to the general public and everyone can look for the big amounts of transactions hence big scams like some of the great land scams in our country or telecom scams will not happen because of it. We can track down every authority and hence the government will be forced to be accountable and transparent .
Well this is not just a piece of cake and it will take time certainly the technology must be paired with thoughtful legal frameworks and structures. Blockchain alone cannot prevent crimes as we are humans we can find loopholes in even the most perfect systems.
Let’s dive deep and know how it can save the world.
With U.S Government Printing currency without any back support, trillions of dollars printed in just a few years of time span, it’s undoubtedly inevitable that the banking and financial system that we are working with right now is going to end up very soon and we will then need a new way to tackle the economy. Or countries with the current model will get debts that cannot be controlled and inflation that will skyrocket.
Hence Decentralization is a very important aspect and a topic that needs to be discussed.
That’s the reason crypto’s like ripple(XRP) and Ethereum(ETH) and new Internet Computing(ICP) are starting to show up some real solutions in front of the world as they are developing solutions using blockchains for defi apps (apps that are decentralized), smart contracts( a contract between two parties that cannot be changed once made), internet computing(layman terms AWS but decentralized and much secure and affordable its brand new tech) etc.
Please note we are not supporting any crypto currency trading. It’s not financial advice but they do show some promising future and all this information is based on many analysts , experts and my personal research. Crypto trading comes with market risk please invest with caution and proper research.
Well Let’s Summarize Things and If it’s still not clear how its the future?Then understand this.
Well when you keep your money in banks you get an interest for keeping the money the interest rate can be anywhere from 3-7 percent of interest where interest rates can always rise up and rise down with time but due to slow methods and infrastructure it does not rise up to an level where you beat inflation .
To understand easily , just know this till 1990-2004 or maybe even more years. You can easily buy a toffee for 50 paise and for one rupees you could get many of them but now 1rs of your income is equal to the 25-50 paise of that time. Hence in 10 years of progress our Indian rupee lost its value hence resulting in increased prices which resulted in a need for higher income higher education and similarly higher returns on your investments.
While money saved in your bank accounts is neither tackling inflation nor its use in proper investments will not only result in losing to inflation but more lose its real value hence 10 years from now your 1 lakh rupees will only worth like 10 or maybe upto 50 thousand rupees until and unless you diversify it.
How inflation occurs in first place
No one can predict when inflation occurs but it will soon as countries like U.S and others are printing a huge amount of money without even considering the assets that are need to be assured by a country to maintain the balance of their currency with actual raw materials and assets.
Hence inflation is inevitable considering how the pandemic also affected the growth of the economy , until and unless we shift to crypto currency.
How Cryptocurrency hedges ahead from inflation.
Crypto currencies like bitcoins are structured technologically to encourage a deflationary attitude and a relatively stable store of value that partially harkens back to the “gold standard”.
As there is only a certain amount of bitcoin that will come in circulation at certain intervals of time. The 21 million Bitcoin limit means that at a certain point, there should be less Bitcoins versus the demand for them, meaning that in terms of value, the price per unit should increase as the supply decreases and no one can tamper this limit or just go and start make more bitcoins or even get more which gives it the same fundamentals of gold.
In this way, the society and community acts as a place where investors and community participants can raise their hand against the inflationary consensus. So this way the cryptocurrencies are a true and meaningful hedge against inflation and the economics and policy thought that drive it.
Now, more than ever, inflationary hedges are important. Crypto currencies like bitcoin is the gold of 21st century.