NFT For A Cause (Part 2): Replicant Army Strengthens Decentralization
Central Bank Digital Currency (CBDC) annoys me greatly. It is every little thing Bitcoin is not. Bitcoin is the new money of the world. Agree or disagree, you better go with it and not against it.
Before anything else, you can join the Replicant Army, an art collection with a purpose.
Replicant Army is a collection of 10,000 untracked and ultra-elite humanoids who protect your online identity against global financial slavery.
What is CBDC
CBDC stands for Central Bank Digital Currency. It is the cryptocurrency version made by the Central Banks around the world. CBDC is a financial slavery like social credit system in China.
These days, only five countries do not have central banks. These countries are North Korea, Iran, Cuba, Afghanistan, Iraq and Libya. Bitcoin is illegal to two countries of these six.
There is a competition between Central Banks and Bitcoin but the ability to understand the origin of the competition is limited when you do not know how money is created.
ColdFusion TV is a YouTube Channel with more than three million subscribers. In one of his videos, Dagogo Altraide narrates the creation of money without fear.
Who Creates Money
The year was 1694 when the first modern central banking occurred in England. Then, the 20th Century came. Nelson Aldrich and five other bankers began central banking in America.
The Federal Reserve System was born. It became the most powerful entity in the country. USD went on as the world reserve currency since 1971.
The government outsourced to the central bank the first creation of paper money and coins. A $10 paper money costs three cents to print but there is a profit of $9.97.
A central bank never allowed to print money all the time. This habit would destroy the currency and would result to massive devaluation.
Printing too much amount of money would also cause wealth inequality. The balance of the financial power would disappear as there would be conflicts of interest among the politicians.
Until now, central banks create 97% of all money through debt. Debt is a new money they create, which is considered an asset for the lender but is a liability for the borrower.
The financial world needs more debts to yield currency growth. Unpaid debt, however, means the entire monetary global system will collapse.
Opposite to what is believed, central banks cannot go bankrupt even with debts. They can still buy real assets.
A central bank is powerful. The high unemployment rate in America was caused by the central bank intervention in 2013.
The central bank printed trillions. These money were distributed to a number of commercial banks and funds with 0% interest rate.
The value of the money made it to the stock market. The value of stocks improved but the real economy of the country suffered.
Corruption in Central Banks
Even central banks are imperfect. Their management systems can go wrong anytime of any day.
In Lebanon, Riad Salameh is the 71-year-old head of their central bank. He disappears when his name is ‘allegedly’ involved with illegal business transactions and unlawful money transfers abroad (VOA News, 2022).
Lebanon’s national currency is down by 90% of its value, debt grown and foreign reserves.
In China where Bitcoin is banned, 25 financial institutions are under investigation (The Edge Markets, 2022).
People’s Bank of China (PBC), bank regulators, stock exchanges and major financial groups are in question for their lack of focus and risk control.
Jerome Powell is the Federal Chairman in United States. Senator Elizabeth Warren hesitates to re-elect him due to his incompetence to monetary policy (CNBC, 2021).
Warren believes Powell has a hard time separating personal financial gains and what is good for the country.
CBDC vs Bitcoin
It is expected to have a futuristic world with the meteoric rise of Bitcoin and with the global implementation of CBDCs.
Both Bitcoin and CBDC are the future of money. Central banks have the bigger reputation to outsmart the popular cryptocurrency but Bitcoin will never go down without a fight.
Cyrus Janssen interviews the author of the book “Cashless.” During the interview, Richard Turrin reveals 83% of central banks are investing into digital currency.
The author is right. Central Banks are getting more interested with CBDC for its efficiency, financial inclusion and protection of monetary sovereignty.
With CBDC, all payments are stored inside a centralized blockchain system. Payment transactions are quicker and easier wherever you are in the world.
With CBDC, there is also no need to create debt to create new money.
The Digital Yuan in China is the frontrunner of all digital currencies. It is reportedly that a digital version of Renminbi (RMB), which is the basic unit of Yuan, is China’s tool to reduce their dependence to USD.
The digital renminbi is China’s entry to digital logistics network. It means the citizens can save time and effort when making money transfers, either people-to-people or business-to-business.
There is no need to travel by foot or by bus for bank deposits or withdrawals. The mobile app has all the features essential for daily needs.
However, the real-time mass surveillance of CBDC worries millions of citizens who value privacy and confidentiality.
The weakness of CBDC is Bitcoin’s strength. There is no Big Brother watching in financial decentralization system.
All transactions are stored in a safer and shared through a series of power databases around the world — a public blockchain.
The regular use of Bitcoin and other cryptocurrencies such as Stacks and Ethereum means you control your funds without any middlemen.
There are no central banks. There are no political favors too. You simply need to trust math formulas that are tested for years and won’t go wrong.
El Salvador approves Bitcoin as its legal tender in June 2021. The citizens are now enjoying the perks of having a stress-free cashless lifestyle.
Just keep in mind: The value of your Bitcoin grows as its market rises. CBDC do not. It is similar to having a saving account. Nothing is gain.
Both apps of CBDC and Bitcoin can be used even without a quick internet connection.
The Pony Direct in Android transmits Bitcoin transactions via text messaging (Cryptomode, 2021). Blockstream can launch a satellite to put a Bitcoin in space.
CBDC or Bitcoin? This competition reminds you of a story between David and Goliath for sure, and the truth is neither white nor black. The truth is about trust.
Will you trust an expected financial system that goes digital? Or, will you embrace a financial innovation with a reputation that is free from politics and cultural fads?
