Why do we need a decentralized global currency?
Tags: Blockchain, Jaxnetwork, Decentralization, Jaxnetworkblockchain101

Talks of a truly decentralized and global currency have been going on for many years, and especially during the last 5 years. Bitcoin, Ethereum, USDT, and other prominent cryptocurrencies have advanced the conversation with their successes, not only as digital currencies but also as reliable stores of value.

Though these cryptocurrencies have enjoyed great success, they are still clearly in a totally different class when it comes to notoriety and utilization compared to traditional fiat currencies, such as the US dollar or the Euro. Whether or not cryptocurrencies have gone mainstream is still very much up for debate, but when is certain is that these currencies are not being used regularly for day-to-day payments.

This means that the implications of a decentralized global currency can still be considered theoretical, as they are still not being used like a truly global currency. A decentralized global currency seems like the obvious next step for societal advancement.

Below are three reasons why such a currency would be beneficial to the world today.

A more competitive environment

One of the bottlenecks in modern societies is that productivity and business competition is mostly local. One main reason for this is due to the geopolitical restrictions that governments levy on entrepreneurs and businesses.

For example, the government of one country may choose to levy a tariff against another country in order to protect an industry within their own country. Though this may be beneficial for the businesses being protected by the tariff, it is detrimental to global competition, as the protected businesses compete only locally, rather than globally. Furthermore, the act of transferring money or making payments to those in other countries can already be a deterrent, as taxes and fees usually apply. This pushes individuals and businesses to limit their transactions outside their own countries, thus diminishing the benefits of global competition and trade.

With a global decentralized currency, businesses and individuals can choose to do business with and make payments to anyone from around the world more seamlessly. This is because governments cannot control commerce or levy taxes the way they can with fiat currencies. Thus, because there is a more global and varied choice, competition for goods and services increases, leading to better quality and better outcomes.

Power away from central authorities

A massive benefit cited by many blockchain and crypto purists for a decentralized global currency is that it takes away power from central authorities.

One way that central authorities (such as central banks and governments) exercise power over people is by controlling the economic output of the countries they control by setting and controlling interest rates, printing money, creating economic policies, and creating tax policies. All of this means that not only do central authorities have power over the economic output of their people, but also over the way people behave with and spend their money.

Many argue that the power that many central governments hold is too great, especially those with libertarian views who advocate for limited government control and intervention.

A decentralized global currency that is widely used by the citizens of different countries would drastically reduce the amount of power which those countries’ central authorities exercise over their economies. Central authorities will be unable to set tax rates, print currency, or effectively enforce their policies on a currency that exists on a decentralized network.

Lower fees

Typically, for people to shift from one system to another, there needs to be one aspect, one unique selling point (USP) that encourages them to make the switch.

For many people, this USP will be lower fees. Existing cryptocurrencies such as Bitcoin and Ethereum have remarkably low fees compared to traditional payment services. Payment services such as Visa, Mastercard, Paypal, Stripe, etc. have dramatically higher processing fees, which are in orders of magnitude higher.

Additionally, because decentralized global currencies are run on decentralized networks without intermediaries, taxes and other hidden fees typically do not apply to transactions on those networks.

At the end of the day, people worry about their bottom line. If a secure service that can reliably execute transactions at a low price is able to emerge, it will be tremendously useful for people all around the world.