I started this mini-series to give you a look into this strange new concept. It's so foreign to so many and there is so much fake information attached to Crypto Currency.
Among it's many attributes, crypto is censorship and inflation resistant. Let's talk about the censorship 1st.
If you are a news junkie like myself; I am sure you heard of a South American nation called Venezuela. Venezuela was one of the most prosperous nations in the world until a communist political regime change took over. Now; most business's are owned by the Government and are either shut down or non-productive. Inflation is rampant and the National Currency is almost worthless.
So, how do the people survive with food shortages and the military demanding payment for every little infraction. Or imprisonment and even death.
One way the people of Venezuela have continued an underground economy and source of trade is with crypto currency. Since the actual value of each coin is digital and encrypted, it can not be taken from your hand or your house. And who would know you owned this coin unless you offered it in payment to a like minded person.
The wallet that "holds" these coins exists in a digital format on a public ledger that is posted and kept uptodate in thousands of computers networked together around the world. A public ledger that all can see and examine, but only the owner can open this file called a wallet. Also, there is no name on the wallet. Only a code. This makes the owner anonymous , and secures the value of these coins.
Now, with just a simple old style SMS text /flip phone, you can transfer these digital coins back and forth to buy and sell goods and services; payment of debt, and a store of value.
Most recently, China has started to enforce some old laws (and new ones). They have now made crypto trading, mining, exchanges, etc illegal. The miners have already left the country, and now the exchanges have notified everyone with a cut-off date. But, with a VPN and a smartphone, people are still trading and still buying.
The China Central Bank has rolled out a new Central Bank Digital Currency, which promises to be tightly controlled by the Communist party. Is has been reported that this new CBDC is programable so that it will be controlled as to where you can spend it and when.
The age old barter system of trading comes into embattled societies with value, security, and is near inflation proof. ( think of post war Germany and now, Venezuela with a wheel barrow full of money trying to buy a loaf of bread)
So, even a repressive regime can not stop people from buying and selling; Even when the money is controlled by the government and driven down in value to almost worthless, or worse dangled on a string and controlled from every direction.
Bitcoin is stored and transferred and bought/sold on an open source and public ledger. This makes it so anyone can see the money, but it does not have name on the file that the BTC is stored on. So, proponents for a censorship resistant currency are served very well, and at the same time, evil doers can not hide the bounty from ransome ware attacks and hackers.
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