Blockchain and Cryptocurrency, the final survival attempt of global capitalism.
I have never watched Game of Thrones. Its unfortunate I have been told, but not regrettable on my part. However, I have had a very keen interest on the history of world empires how they gain power, organize themselves and
eventually cease or get destroyed. What is very interesting is that the survival and longevity of any world empire depends a lot on their form of economics and military prowess. In short the strength and survival of any empire depends on its money and its military strength.
The Gold Standard.
No one theory can pinpoint exactly where precious metals became the standard currency and medium of trade the world over. From as far as 5000 years ago during the world empire wars that ran through Egypt, Greece and Rome, gold and silver were the standard medium of trade, with all “money” coins being made from actual precious metals. With the establishment of the modern day Reserve/Central banking system, the actual precious metals were kept in a vault, while notes and coins were used as trade mediums.
The rise of Capitalism and the US Dollar.
The fall of the Roman Empire, approximately 476 marked the beginning of the Feudal Age, the time period between the Dark ages and modern times. In this era all land, money and property belonged to the monarchy and was ‘awarded’ to individuals for service to the throne. This created the “haves and have nots” as property and land was kept in the hands of a few, heralding the Age of modern capitalism as the few realized that ‘profit’ could be generated in the form of merchant, renting and lending activities and occasionally as small-scale industry with some wage labour.
From 1837 the United States had in itself been developing its own banking system that is recorded to have been very speculative and eventually culminated in the formation of The Federal Reserve in 1913. Coincidentally this was established a mere 6 months before World War I – the first “modern” war for control of world territory, politics and economics.
establishment of the International Monetary Fund and International Bank for Reconstruction and Development and the US Dollar being crowned as the standard for international trade. During this time the modern day capitalistic system had also been growing fuelled by the rise of industry and technological advancement, globalization and regulated international trade.
Fiat currencies and the fall of the Dollar.
A fiat currency in simple terms, is money that is created without the backing of actual reserve precious metal and is simply “printed” by order of the government to match its own spending, hyperinflation or demand for currency. In 1971 Richard Nixon, former president of the United States, separated his currency from gold backing. At this point it can be stated that the US could print “paper money” and use this to buy goods and services internationally. However, because of the ownership of money, capital and business by a select small group, at each point where the capitalism of the US has crashed, the rich have somehow emerged richer and the poor seem to be the biggest losers. There are many theories about those such as Muammar Gadaffi who have advocated for bullion backed currencies like the Gold Dinar have been wiped out by the US in order to keep the dollar at the top.
Cryptocurrency & Blockchain, the solution?
As global capitalism seems to be coming to its final end, cryptocurrencies and blockchain computing seem to offer a good alternative and a final escape from a system of money owned by small groups. Cryptocurrency is defined by Merriam Webster as any form of currency that only exists digitally, that usually has no central issuing or regulating authority
but instead uses a decentralized system to record transactions and manage the issuance of new units, and that relies on cryptography to prevent counterfeiting and fraudulent transactions. Blockchain is a system of keeping account and ledger of transactions via a peer-to-peer network of interconnected computers using cryptography – a secure form of communication, verification and signing.
Not governed or regulated by bankers and government – since those two will just create more paper money to fund fake wars and overspend on welfare, cryptocurrency offers the idealistic communist or socialist a chance to break the barriers as anyone can get to own and trade in cryptocurrencies and accumulate wealth as long as you have a computer or cellphone, an internet connection and a few cents to put into the system to start trading.
The Problem with Cryptocurrency & Blockchain in Africa.
There are several issues to address here with regards to Africa joining the cryptocurrency and blockchain revolution.
First, and admittedly more of a personal fear than anything else, it is accelerating the Singularity. I am not going to get too much into this one, but this does depend on a large network on interconnected super-network of always-online computers. But I have somewhat accepted our eventual transformation to machine as an unavoidable evolutionary step so lets not get too much into this one.
The second and first real problem with the cryptocurrency is the issue of the internet in Africa. African internet is slow, expensive and not very readily available for a lot of African natives. As per internetworldstats.com, African internet users only accounted for 10.9% of the total number of users. The internet penetration rate, a measure of people with access to internet agains the total population is 35% in Africa against 95% North America and 85% in Europe. African countries barely feature in the top 100 on internet speeds with South Africa ranking in the upper 70s.
Another problem is that the cost to begin trade is extremely high. Though something as simple as a cellphone can be used to start trading, the real value is made from “mining” cryptocurrencies. Mining involves setting up sophisticated rig of CPU and graphics cards that may be a little too hefty for the common man. During my research I found the cheapest rig for the most value would be worth about US$ 220(ZAR 3169.11). This is an entire paycheck for the month for some people I know.
An alternative would be to simply buy your bitcoin but as I write this the price for a single Bitcoin on the South African market is ZAR 48 953,68(US$ 3398.54). Which for most South Africans and Africans at large, is far beyond what they can afford.
My final issue with cryptocurrency is that it is in itself a fiat currency. Seemingly appearing out of nowhere and announced in a white paper document signed only using a pseudonym, it is weird that no one seems to be questioning the creator’s intention or motivation for creating the most popular cryptocurrency in the mainstream since 2008. Cryptocurrencies have been used in the Deep Web to pay for questionable things like human trafficking, illegal arms and illicit drugs, the appearance of it on the mainstream via an anonymous source is worrying.
In conlusion I don’t see cryptocurrencies as a viable option to put the African continent on the world trade map. In my opinion, the fact that we don’t know who this Satoshi Nakamoto is could easily mean he was hired by the powers that be to evolve capitalism into its next phase. The fact that setting up to mine or buying into the trade is extremely expensive means that it is not available to the world’s and certainly not Africa’s poor. The few who can somehow get into this “exclusive club” will just become the new 1%. Big corporate companies such as Google who own neural network computers such as Deepmind and cloudspace companies that already own so much infrastructure and money will make a smoother transition into the crypto age. It may be just another quasi revolution like we have seen at the time our poor continent got “independence”.
Do you think cryptocurrencies will work in favor of Africa by subverting banking and government regulation? Does it not bring the “free market” down to the individual?
Let me know in the comments below.
– The Uhuru Reporter –