ForexMinute.com – Despite the recent scandals that punctured the reputation of digital currencies, their market is yet one of the most booming ones. You can notice the speed at which new cryptocurrencies are being launched. They are now over 200, and is promising to flourish even more.
We are indeed entering into a new era in which the world finances will not be just limited to the state of the US Dollar. Instead, this era is breaking the shackles and upsetting the way we used to create and distribute global money.
Currency from the Heavens
It is ironic enough to know Santa Claus is rumored to reside somewhere in the North Pole, the same place where Baldur Friggjar Odinsson announced to distribute 31.8 virtual coins to over 320,000 denizens. The generous donor, or the new-age Santa Claus, aimed an “airdrop” to eradicate the ongoing financial crisis from his country, for which he blamed the poor supremacy of its Iceland’s government.
It is one of the first examples in which a nation’s debt policies, mixed swelling balanced sheets, and dozen other financial norms and mistakes led a man to completely eradicate a process he believed will ruin his country. And his weapon was not a gun or a herd of rebellions, but it was a simple cryptocurrency, a bunch of Litecoin-inspired codes that accumulated together and made Auroracoin – the world and Iceland’s first national cryptocurrency.
On its website, Friggjar Odinsson condemns the interventionist government policies, which prevents traders and investors to convert Krona into US Dollars and Euros. The man says that the power of money should be given back to the people, who were sacrificed on the altar of a failed financial system.
For the new-age Santa, if Auroracoin is accepted by a majority of Icelanders, it will soon assume the role of a new national currency of Iceland.
Auroracoin is Just the Beginning
The idea of a nation-based cryptocurrency has now fostered inside the minds of many developers. We see the quotient of patriotism now in many recently launched cryptocurrencies – all of which call themselves the result poor monetary system. Spain has Spaincoin and Pesetacoin; Greece has Greececoin; Scotland has Scotcoin; Cyprus has Aphroditecoin; and list is increasing with each passing day.
For the years to come, people soon will acknowledge the benefits of cryptocurrencies over traditional money. But will such acknowledgment give cold sweats to lawmakers and politicians? Or will they simply adopt them after making some amendments concerning their regulations or use. As per now, only two governments – The UK’s Hull City and Canada’s Alberta – have launched Hullcoin and Altacoin, respectively. Both are the government-based versions of cryptocurrency meant for local use. Apart from Alberta and Hull City, no state or country has officially announced to adopt cryptocurrency as fiat money.
Why Governments are Against the Idea of Adopting Digital Coin
The mother of cryptocurrencies Bitcoin has its name involved in certain scandals, which somehow affects its child-currencies as well, including Litecoin, Dogecoin, Peercoin, etc. Mt. Gox bankruptcy, Silk Road shutdown, money laundering and drug smuggling issues, and many other anti-social events and elements have tarnished the reputation of digital currencies before the law.
But as the number of people accepting these virtual currencies are growing exponentially, lawmakers are not looking for an outright ban, for obvious political reasons. But instead, they have imposed groundless taxes to deviate people from using them – the recent IRS guideline and PBOC warning to Chinese exchanges are some among them.
Is Regulating National Digital Currencies a Solution?
In the industrial era, the benefits belonged to those who owned the means of production. In the digital era, the profits belong to those who hold the power of calculation. Currently, all these cryptocurrencies are deflationary, a way-too technical, and vastly decentralized, which makes a normal person deficient to earn it. In a few years, only companies with vast computational powers will be able to mine these currencies. This means instead of the current regulators, Intel, AMD and Qualcomm will be issuing the money.
Thus, to really make sure such currencies comes into effect, without falling into the pits of mishandlings and corruption, we need rules that can be implied on exchanges and miners under the supervision of some strict authorities, say FINMA (Federal Supervisory Authority for Financial Markets). We already have strict laws against money laundering and frauds because they target behaviors, not tools. Bitcoin, for instance, is a tool, as well as a mechanism for total transparency. This is what governments don’t like at first, as the software to mine cryptocurrencies is open and adaptable.
The time seems to be gone in which people will use digital currencies only to buy pancakes. The introduction of national cryptocurrencies have initiated a much larger debate on international scale about their potential to save world’s economy from inflation, recession, and from the kinds of financial monarchism. It is the people who can simply depend on these currencies for a while as a form of experiment. Local governments from Hull City and Alberta will give us the best example of how to use cryptocurrencies under an observant eye.
For now, what cryptocurrency creators need is to stop competing with other altcoins and start innovating with this new technology. It is time to reach and teach people about these currencies and involve them in a movement. Greed here is out of the question; and now is simply a time to renovate the financial standards and give people the power to choose what is good for them.
To contact the article’s writer: Yashu Gola at firstname.lastname@example.org