FCC #3: Exploring Bitcoin and cryptocurrencies beyond just currency

The third installment of Finshots Cracks Crypto delves deeper into the world of Bitcoin and other cryptocurrencies. In the previous weeks, the basics of Bitcoin and blockchain were explored, alongside a historical journey through the evolution of money, pointing towards a possible significance of Bitcoin in the future.

One might wonder why cryptocurrencies like Bitcoin matter. To illustrate, consider a scenario where a person, such as Gopal living in a remote Indian village, lacks access to basic banking services due to the absence of a nearby bank or the hurdles of identity verification and complying with KYC norms. In such cases, the decentralized nature of cryptocurrency networks, based on blockchain technology, can provide an alternative solution. Without the need for documentation, intermediaries, or bureaucratic processes, individuals like Gopal can simply utilize an internet connection to set up a crypto wallet, essentially creating their own “bank.” By generating a public address, akin to a bank account number, users can conduct transactions without the involvement of traditional financial institutions, resulting in cost-effective transfers regardless of the amount sent.

The concept of financial inclusion through cryptocurrency transcends beyond the implications of basic banking services. Non-custodial wallets stand out as a representation of true crypto ownership, offering individuals complete control over their assets without the need for KYC verification. This form of ownership enables users to navigate the crypto space independently, bridging the gap between traditional monetary transactions and the world of cryptocurrencies. By becoming their own “bank,” individuals can engage in global trade seamlessly, a privilege previously unattainable, ensuring financial inclusion for a broader population, extending opportunities to individuals like Gopal and his community.

The utilization of Bitcoin and cryptocurrencies extends beyond mere financial inclusion, potentially addressing deeper economic issues by aligning with the principles of Austrian Economics. Rooted in the belief that economic phenomena are governed by cause and effect relationships unique to each circumstance, Austrian Economics challenges traditional theories like the labor theory of value, emphasizing subjective value and scarcity in determining prices. While traditional currencies derive their worth from government backing, Bitcoin’s decentralized nature mirrors the Austrian concept of naturally emerging money, free from governmental control.

In essence, Bitcoin’s revolutionary potential lies in offering a decentralized financial system accessible to all, eliminating barriers to traditional financial services and evolving the economic landscape to integrate principles of subjective value and natural monetary emergence. As the future unfolds, the adoption of cryptocurrencies like Bitcoin could pave the way towards a more inclusive and adaptive economic framework, transforming the way individuals engage with financial systems globally.