Money can no longer be explicitly defined, what I mean is, there is no fixed formula to how money is created and valued. When you talk about money, value comes to mind and not physical and scarce. The concept of money is complex and varies from country to country.
Interesting, most successful cryptocurrency’s project values are pegged to the limited supply circulating the market. When you look at the finite supply, you will find out that it leads to scarcity which in turn adds value —this will not allow the currency to get devalued by excess supply.
The purpose of creating this post is to create new innovative solutions for our society because the increasing move online makes us more fragile. This sadly has been experienced by people living in countries where their banking systems have failed. There are lots of story from people who lost their life’s savings.
It’s no news that our systems are now more interconnected, more complex and less security. I feel blockchain can reform our foundational systems and create a more transparent, stable, and accessible system for everyone.
A writer once came across a man walking his four dogs, three of the dogs ran to play but the forth stayed close to it’s owner running in circles. The writer asked the man about behaviour dog’s behaviour, the owner explained that the fourth dog is a rescue dog that as been confined in a box all its life, and still think it’s still confined to its box.
Come to think of it, are we running in circles obstructing innovation? Are we limiting our careers because we still don’t know that we are free?
Over the past century, most of the working environment we find ourselves are narrowly defined and they don’t give room for creativity. As we embrace the future of work and embrace new working techniques, most narrowly defined jobs will go obsolete, this will bring about a revolution in our educational system and future proving our business.
The future of work is innovative, collaborative, linked in a way that it can solve problems without boundary limitation. Markets that are competitive and combative will have little or nothing to offer shortly. Collaboration is the keyword, and blockchain comes first when you talk about a global digital collaborative tool that solves problems.
The earlier we acknowledge this impending change, the earlier we enjoy a higher capacity and time to future-proof our careers.
Tangible and Intangibles economies
There is an increase in the adoption of technologies and our society is more enlightened on their data usage by a third-party, this means within the next decade we need to set foundations that are capable of creating a more comprehensive intangibles-based economy.
When we talk about intangibles economy we are talking about an abstract concept that is poised to drive the 21st-century economy and boost new and exciting technologies, a good example is a blockchain and other decentralized applications.
This non-physical market is one area I feel the peer-to-peer payment enabled by blockchain would strive, becoming a backbone for our society’s financial structure and the future of better inclusion.
Blockchain has proven this to be true, it has already made the society have a rethink about what money is.
Come to think of it, companies like Airbnb and Uber were once concepts, and they don’t own the ideas that they sell. No doubt they created highly scalable digital products that innovatively enable the buying and selling globally, they do this without owning the real assets as well as financial risks.
According to statistics, these companies are experiencing a boost in revenue despite the abstract nature of these companies.
It’s surprising that till date financial professionals and investors still find it hard to value abstract ideas, we don’t have to blame them because there have been a few over-inflated valuations of ideas-only based companies and the blockchain concepts that have failed.
Despite this, there’s an estimation that in the next four decades, the intangibles-based market would witness a boom with an estimated value of $1,281 trillion.
How the blockchain is transforming our financial systems
The introduction of blockchain is not here to eliminate but to reinvent our current financial payment system. It has created a space for grand collaborations in a pace that has never been seen before.
Blockchain and other cloud computing have been in existence for close to 2 decades now, however, it’s not until the past decade that more people start to embrace them as a standard business practice.
Is there a need for reinventing our financial services?
The answer to this question is simple, reinventing our current financial systems and embracing blockchain will create a more inclusive future for all. What blockchain offers is lower transaction costs,
Blockchain will also replace the current insecure centralized financial system with a decentralized transparent one free from cyberattacks, and data theft.
Blockchain would create a financial system that is secure, efficient, inclusive, and user-friendly. Your data is safe on the blockchain, free from malicious attack and protected at the highest level by complex mathematical problems that require solving to penetrate the perimeter making it impossible to manipulate.
The cost of transaction fees worldwide
One issue plaguing global trade is the issue of high transactional fee, this cost alone makes it difficult for our centralized financial systems to adopt micropayments.
What this means is that not everybody can participate in global transactions. This means lots of people are either excluded or are forced to use a third party for small transactions. A hit from a 2018 McKinsey report has shown that transaction fees could hit $2 trillion business by 2020.
But with blockchain, we can have more affordable transportation fees for all types of transactions. This means more people can participate in global trade since there is now a technology that allows micropayments.
With blockchain, both businesses and individuals are allowed to participate as seen with bitcoin. Other networks such as Algorand, Ethereum, Celsius Network, etc are trying to transform our global payments system.
Is there a future for finance?
Without a doubt, blockchain technology is the future of finance. And it has taken revolutionaries like Algorand is taking it upon themselves to transform the narrative. Algorand has developed an open, permissionless, pure proof of stake blockchain but what makes it stands out is that it does not allow forking, that’s exactly what the financial system needs.
How different is the Algorand Blockchain
Forking is when all parties on a blockchain fail to agree on a block.
A block stores asset details, this means if a fork is enabled, it automatically compromise the data stored on the block.
What Algorand did is to allow all financial institutions to participate in a decentralized economy without risk, thanks to an upgrade in the 2.0 release.
Factors that make Algorand unique are:
Simple programming language
Algorand was built to be scalable. The code used is rich and designed to be an easy build for new users and old-time crypto professionals alike. It is designed using the programming language “Go”, this makes it easily accessible for developers.
Pure Proof of Stake Algorithm
This is not the first crypto to make use of pure proof of stake, however, the future of blockchain technology is entirely proof of stake, because it is more efficient and less time-consuming.
Proof of stake is a step up from proof of work it is the perfect alternative.
No need for Miners
Algorand does not give room for mining, rather it uses a random selection process to confirm transactions. More like a lottery will take place to find out who is going to confirm a transaction. This will not give room for calculated attacks.
Self-Selection via Verifiable Random Function (VRF)
Algorand plans to achieve its vision through Self-Selection and user replaceability. It invites users to participate in the certification of blocks through VRF which makes a random selection.
Dutch auctions for coin release
Algorand uses Dutch auctions for their coin release (Algos). This makes it easy for anyone to own Algo.
Algorand primary objective is to truly decentralize crypto by releasing tokens into the market within the next five years.
The pioneering Dutch auction was held in June 2019, all participants of the coin offering paid an equal price for the Algo tokens.
Decentralized applications or dApps are applications built on top of a blockchain infrastructure layer.
Here’s a better way to understand this, let’s say the blockchain infrastructure is a real building, the builder who builds the foundation is completely different from the joiners.
Each person plays a different and unique role.
This has not stopped scammers from manipulating people to think that their company is built on blockchain technology.
Blockchain does not offer an automatic solution to your business needs, but it promises to serve as a foundation for a new business Era and offers inclusion and sustainability.
We are moving towards reimagining money, the future of work, and the foundations that could help society with this transition, and blockchain sets to pilot this change.
It would be a smart move to embrace blockchain and follow the banking and financial institutions evolve.