Notes of a Cryptonaut traversing the Metaverse contd. (8-10 mins)
When making that conscious decision to embrace the "Brave New World" of digital finance and cryptocurrency, as if standing before Morpheus at the virtual gates to "The Matrix" both hands outstretched before you clutching the blue and red pill options forward, gazing up at him in a manner likened only to glimpsing both the face of God and the Devil encapsulated in a Romanesque ruler, Godlike stance of Janus: Head of The Gods, the path chosen at that point determined only one truth and one alone, both pills lead to the all encompassing embrace and entanglement in a knowledge unknown.
New Industry, old strategies. As with ForEx, Stocks and Share trading the Cryptocurrency Industry birthed the DeFi (Decentralized Finance) which although built upon the foundations of the this newly harnessed Blockchain Technology, really didn't differ much in appeal, application or technique when it comes to the crunch.
Schematics Of Cryptocurrency Trading and The Crypto-Exchange: DeFi.
When we discuss cryptocurrency exchanges, we must outline where it all began with Bitcoin, and since $BTC has paved the way and laid the foundations for the DeFi, the definition of a cryptocurrency exchange is directly derived from the first digital currency exchange/s which is Bitcoin.
Here is the definition of a digital currency exchange with relation to Bitcoin.
"A bitcoin exchange is a digital marketplace where traders can buy and sell bitcoins using different fiat currencies or altcoins. A bitcoin currency exchange is an online platform that acts as an intermediary between buyers and sellers of the cryptocurrency."
- Investopedia.
The DeFi exchange is made up of all the Decentralized Finance token projects known as DeFi ALTcoins (Alternative Cryptocurrency). It’s infrastructure and overall appearance is similar to FOREX and the Stock Market exchanges of the world.
Cryptocurrency however is a volatile market place which is one of high risk and high reward. As with all investment options, we must take the good with the bad, as with Investment Markets, we must challenge the *Bull and the *Bear. (Definitions at end of article courtesy of Investopedia)
Let's first break down the difference between a cryptocurrency and a token.
“A token is above all a technological concept. It gives the holder certain rights depending on the content of the blockchain or a of a smart contract. If it is an asset or a right on a Blockchain, a token may operate without an underlying ad hoc legal framework.” - Hubert de Vauplane, “BLOCKCHAIN AND CENTRAL BANKS: LEGAL AND REGULATORY ASPECTS” 2018.
Not to regurgitate textbooks, although this being a brand new industry and Bitcoin having birthed the entire cryptocurrency movement in 2008 only 13 years ago, it is but a non conformist teenager saturated with discern for, and rebellion against centralized institutions and establishments and the unfair system of governance, with which said system exists to dictate over society.
Let's break down Monsiour Hubert de Vauplane's outline of the differences between a cryptocurrency and a token in the eyes of a Central Banking authority.
The main of these is that, not all tokens allow for a payment function. Which is evident in the DeFi which has majority stake control by Ethereum network in the form of ERC20 (Ethereum Request for Comment #20) tokens of which Ether was the first mined and minted.
In reality, Ethereum is both a cryptocurrency and a token. Why? Aside from being the first ERC20 token, it is both based on the fact that it circulates on the marketplace to be traded, swapped and held as a digital asset that can also be used as a form of payment, whereas other lesser ERC20 tokens are not yet recognized at the capacity of what would deem them to be used in the same manner as actual currency; paying for goods and services online being the first character trait of actual digital/virtual money.
Global adoption is not about cryptocurrencies and tokens taking over hard currency all together right away, that would be virtually impossible a feat to beheld. Global adoption is about recognition of cryptocurrency and the DeFi tokens as viable assets and investment securities which should when at a certain point of recognition and acceptance be adopted as a means of transacting real world goods and services attaining the value of money.
Let's reiterate, the most important factor at hand here, which is why cryptocurrency has boomed as an industry. Bitcoin has value based on the backers, investors and man power infrastructure which makes the community and in turn evolves the ecosystem that believes in it's value. Similar to how the Central Banks of the world are governed by their governmental infrastructure to proclaim unto us the people that hard currency and fiat money has an attained and attributed state of value.
Since we all should understand by now, the aspect of Deflationary > Inflationary. In the event that one doesn't have an understanding of Hyperinflation or the power of a Government's word that their money has value, then it is suggested to read "MONEY AND POWER: Great Predators in the Political Economy of Development. Sarah Bracking"
All inflationary circumstances in global economics stems from debt accumulation.
"A short history of development finance, page 19
The period where the current debt overhangs of the poorest countries were largely accumulated began in the early 1970s. After the oil shocks and the inflation that ensued, world international liquidity greatly expanded within the private banking sector, spurred on by the large deposits made by the oil exporters (Folkerts-Landau 1985; Lindert and Morton 1989). There followed a concomitant expansion of the external debt of developing countries, accumulated in large part for financing balance of payments deficits. Non-oil-developing countries began to finance their balance of payments deficits on commercial terms from 1973 with loans from banks, banking consortia and, in a eurodollar market swollen with liquid dollar assets, from oil-exporting countries."
The economic evolution of investment asset options which can be traded in the public market/s, could be seen as Gold - Oil - Bitcoin & Cryptocurrency, with the creation of money slotting in between the trade of Gold & Oil.
Decentralized Exchanges
Decentralization is the term given to non-centralized institutions or systems of operations. A centralized system of operations would be the Central Banking System, backed by the strength of it's Government.
This central authority governs the value of the state of finances and the fiat currency of that nation. A Decentralized Exchange exists and operates without the need for authority or governance by a central banking system or one government, in a state of global democratization of decentralized finance.
A Decentralized Exchange is a P2P (Person 2 Person) network of; investors, traders and token project sellers; the token sells to the exchange and the network community buy that token project from the exchange directly without the need for a centralized authority to facilitate the transactions.
As cryptocurrency was designed to be a decentralized in a democratized stance of "we the people" created "for the people", governed by (community) consensus, "by the people", reliant on an written code of trust, embedded through the miner's validated transactions on the blockchain which in more recent times has been further guaranteed by use of smart contract technology, which acts as previously stated in our NFT write up "a digital handshake between two entities interacting on the blockchain".
Issues with KYC (Know Your Customer) in the P2P extension of Crypto Exchanges, is lessened due to a state of anonymity between the two parties involved in the transactions on the blockchain being represented by only their blockchain crypto wallet addresses.
This is one of the key difference between trading on the ForEx or Stock Market where one can simply put just cannot buy; assets, shares and securities direct from another shareholder on the actual stock exchange, they buy from the exchange only.
Being able to deal direct limits the risks associated with AML (Anti Money Laundering) & fraud related issues attributed to some investment trading options existing today, and also lessens the chances of falling victim to hackers or security breaches that result in theft.
Which has unfortunately happened in the short history of cryptocurrency exchanges more than once; Mt. Gox, Coinbase and Robinhood (to name 3) all have fallen victim to hacks.
N.B It is to be noted that the blockchain networking technology is thought, by design to un-hackable, is not what gets hacked (yet...) the exchanges and wallets are vulnerable though however, they are what has been and continue to be attacked.
Another valid reason to choose Decentralized Exchanges to buy; sell, swap, or trade is the price point.
Exchanges are less likely to fluctuate in pricing and at times may be cheaper based on the volume of an asset held, or their rank in the blockchain networks costing less to operate and perform transactions, like Binance Smart Chain in Comparison to Ethereum Mainnet. (*side note, BSC's native is BNB which is an ERC20 token which is also mentioned in an NFT writeup relates directly to the Ethereum blockchain and mainnet, so even the BSC relies on the ETH-network to function, to check for ETH based networks one simply needs to look for the '0x' the start of the wallet address.)
IT TAKES THE NATIONS OF MILLIONS...
Socio Economics And 3rd World (Conditional) Problems.
Bitcoin and cryptocurrency/digital money was created for the benefit of those who lack access or the means to access the centralized banking system, its greatest benefactor is the 3rd World, for whatever reason that may be;
- Not enough identification for KYC to apply for a bank account in person.
- Not enough recognizable income to qualify to even meet the requirements for a bank account.
- Lack of access to the developed urban environment; residents of the 3rd World rural regions who live too far from civilised development, in the form of banks and remittance centers.
Let’s assess the situation of the 3rd World, which in reality exists to breathe in the developed 1st world.
One only has to look at impoverished rockets of North America to realize that “The Land of The Brave & Home of The Free” is not as “Free” as it may appear from the offset.
Firstly we have to look at what defines the conditions of a lower level society in comparison to a higher level developed society?
- The degrees of civilization and development.
- How advanced in comparison to what would be deemed as an advanced civilisation/developed city.
- Poverty and the existence thereof, that dividing line which is both visible and invisible at the same time.
The recent announcement by El Salvador’s President: Nayib Bukele to adopt Bitcoin as legal tender, alongside the US dollar just goes to show the world the potential of the value of the cryptocurrency as a digital asset.
Shortly after El Salvador announcement in June, the Swiss and French Govt. announced that their Central Banks would consider acceptance of cryptocurrency in a joint operation called “Project Jura” Which is a focus on Government backed stable coins CBDC (central bank digital currencies) which would see a case of Centralized Decentralization.
(links at end of piece)
With Bitcoin being the figurehead flagship for cryptocurrency and our proclaimed leader in this digital money and Decentralized Finance revolution, this purely outlines the mass acceptance of Bitcoin representing cryptocurrency as a whole industry.
There are several countries who already accept Bitcoin.
(Investopedia)
The United States, Canada, Australia, The European Union, El salvador.
Mind you there are still several countries who reject it;
China, Russia, Vietnam, Bolivia, Columbia and Ecuador to list a few.
We can argue the case of pro’s versus cons until the proverbial cows come home, then we can highlight how Bitcoin and the DeFi has saved the Global Economic infrastructure from complete collapse which would send us into global recession and depressions worse than The Great Depression of the 1930’s.
This being upon inception in 2008 right in the midst of the GFC (Global Financial Crisis) and then again in more recent times in 2020 with the grips of Pandemic Poverty amidst the aftermath of COVID19 ravaging the globe still to this day in a seemingly never-ending story of lock downs and panic shopping, coupled with heightened restrictions and PPE fashion additions, now with the addition of vaccinations and vaccination passports.
To the naysayers against cryptocurrency it can be said, seriously take a look at what Bitcoin Exchanges and the DeFi Exchanges have done for the world’s people, the ordinary everyday people in most part, some of whom (like myself) turned to crypto and the cryptoverse to work and live off/on.
Imagine what life during the pandemic would/could be like without crypto? Personally IMHO it would be straight up FUBAR.
To highlight the title of this add on piece of freeverse; It Takes The Nations Of Millions. (closing section to this part of Decentralized Democratization Of Society, yes this is a book ;) which will hopefully become a free NFT pdf one day.)
Just the advent of blockchain gaming alone, and adoption of one game in particular here in The Philippines, Axie Infinity, has provided a replacement income to so many affected by the pandemic and this COVID crisis. The perfect example of this is documented in a short video by a Australian Cryptocurrency writer Journalist /Writer for Coindesk/Emfarsis; Leah Callon-Butler living in The Philippines. Without it a lot of people and families would surely starve.
If you have not heard of or seen this proactive movement in the right direction for assisting the under-developed and underprivileged greatest affected by the Pandemic shutdown of society, through loss of jobs, loss of public venues to peddle goods and services and general loss of livelihoods and income, then please bookmark the video to watch later.
This is the perfect example of the positive ripple effect blockchain technology has on our physical ecosystems within society and the most hit when financial crisis looms; The Urban Poor.
Coindesk article here;
https://www.coindesk.com/nft-game-filipinos-covid
Disclaimer:
* I am NOT a financial advisor and only aim to provide assistance with guidance and knowledge resources in the world of cryptocurrency trade investments and maneuvering around the cryptospace. Advice given and offered, is not intended as financial or investment advice.
** The cryptocurrency and DEFI (decentralized finance) marketplace is the most volatile investment trading platform in the investment finance industry sectors. Please proceed investing with caution and do not invest more than you can afford to lose.
*** Please consult an actual financial advisor if you require assessment of your financial position if uncertain about entering into the world of cryptocurrency.
I am a blockchain & cryptocurrency technology enthusiast whose main focus and main avenue of income during the pandemic has been earning various cryptocurrencies and tokens for Graphic Design and Social Media Marketing and Multimedia Content Creation.
Additional to the Art, design and Multimedia work, delving into the realm of NFTs (Non Fungible Tokens) and learning to code Smart Contracts in Solidity for Ethereum having embarked on the creation and design development of my first educational dApp game last October 2020, designed to be housed on the Ethereum Blockchain and also other dApplications which are designed to be multi-chain or cross-blockchain compatible with focus on NFT integration into educational gaming and educational GUI's (Graphical User Interfaces).
Having been an artist since age 5 and first dabbling in computer aided graphics design at age 8, studying Information Technology avidly both independently and in and then out of High School, constantly keeping up with the ever evolving world of Computer Science Technology in relation to Art & Design.
Ongoing Portfolio of Art: IG - @realitymeetsdreams
NFTs on mintable.app: rechid monk designs...realitymeetsdreams
