What Does Decentralization Mean?
Countries facing hyper-inflation are becoming consistent proponents for blockchain’s first purpose-decentralize governmental power. Iran is the latest country to launch their own cryptocurrency-backed by state assets. Venezuela created the Petro to circumvent US trade sanctions and crude oil’s price drop causing their country’s money, Bolivar, inflated by 1.7 million percent.
The Hamas group of Palestine has asked supporters to give donations in BTC for the same reasons as Iran. The Hamas group has been deemed a terrorist group by the US and the European Union which has effectively barred them from the western financial system-cutting off most funding strategies. Russia, Turkey, and China do not consider Hamas as a terrorist group.
We will continue to see countries, companies, and organizations barred from major financial systems creating their own cryptocurrencies or using crypto-assets to skirt or neutralize trade sanctions. I estimate that less than 10% of the current global population holds any form of crypto-asset. User adoption of crypto assets has to increase in order for it to become an effective way of circumventing traditional financial systems.
In application, decentralization seems to mean turning monopolies into oligopolies-effectively re-centralizing power. With governments, they are considering using blockchain and crypto-currencies, as a source of taxable income, surveillance, fast information transfer, and anything else that gives them more power over competing countries.
Blockchain is becoming a major weapon for superpowers to retain dominance.
