The world’s attention is on the coronavirus right now. Not ones to let an opportunity pass by; governments around the world, and their central banks, are aggressively pushing for digital forms of their native currencies. We may see blockchain and cryptocurrencies as a way out of government surveillance and control, but they see it as the perfect tool to further tighten their grip on the population.
Only 3 months into the year and all of a sudden there are huge spikes in interest for centralized digital currencies, masquerading as the solution to a “diseased” world. The magnitude of this interest is conveniently overshadowed by the coronavirus pandemic. No one is talking about anything else, and mainstream media won’t even speak about this because they cover only what they’re paid to cover. And when they do it’s propaganda.
China will be launching its Blockchain Service Network (BSN) next month. The BSN will be run on distributed ledger technology (DLT) with an initial 100 nodes across a hundred cities in the country. This will likely be the inception of the digital yuan that President Xi Jinping alluded to last year. Like any other blockchain, businesses and organizations will be able to build and deploy their platforms on the BSN. However, as should be expected, this network will be completely centralized and under government control. Completely monitored.
Zimbabwe’s biggest bank has recently signed an agreement with Apollo Fintech for the development of 3 national solutions. Not much was said about the other two solutions, but one will be the creation of a gold-backed digital currency. Of course, I’m skeptical of government’s intentions to uphold integrity in maintaining its gold reserves. They did a terrible job with their Zimbabwean dollar currency after inflating it to oblivion. We’ll have to wait and see what the other two solutions will be. But looking at Apollo Fintech’s offerings they might be either a tax system, commodity exchange, mineral claims system, government bank platform, bank network, or any of the other services Apollo provides.
Earlier this month the Crypto-Currency Act of 2020 was introduced to congress, which is a bill that aims at differentiating between the three main types of crypto assets. If successful it will provide clarity over crypto regulation. More recently is two bills that hope to introduce a digital dollar run by the Federal Reserve Bank. It is not clear whether this digital dollar will operate on a blockchain or not. But from a government that casually prints $2 Trillion dollars… you get the point. This will likely be the government version of Facebook’s Libra – pegged only to the US dollar.
The most promising of all is the on-going discussions by the Bank of England regarding the possible introduction of a digital currency. Now what’s most promising about this digital currency is that England is considering decentralizing it. Yes, a central bank is actually considering decentralizing their currency and have shared this with the public to consider and offer their feedback on it. Whichever decision is taken the final say is reserved for her royal highness. It will be a heart-stopping moment waiting for her verdict on a ‘digital currency’.
Web of Control
Sure, a digital currency is more beneficial than physical cash, especially in our current environment. But a centralized (digital) currency poses far more threats than physical cash. In a world of centralized digital currencies everything you do is monitored and tracked. I wrote an article a few years back about how researchers in the mid 1900s gathered data about people from the trash they threw out. And how the internet was taking those same principles of data collection to the next level. Now a centralized digital currency would be the trinity to Big Brother’s master plan.
All things lead to data. In the times we’re living in it seems following the data bears more fruit than following the money. Maybe it has something to do with why data has since surpassed oil as the world’s most valuable resource. Keyword = resource, which by definition means a source of wealth. What data, or rather wealth, can a centralized digital currency provide its issuers?
The answer to that question is staring right at us – ‘Centralized Digital Currency’. Each word in that term holds a heavy value and responsibility.
Centralized: definition – brought under the control of a central authority i.e. government. This on its own holds its own dangers as we’ve witnessed many times in the past and still do. Control bodes corruption and the abuse of power. Case in point, the recent announcements by the Federal Reserve to print trillions of dollars into the economy, which makes every dollar in existence that much more worthless.
Digital: definition – that which represents magnitudes in discrete units of a physical quantity, as compared to using an analogue (physical) system. In other words, something you can visually see, but cannot touch. The digital world is now mostly live on the internet, and if you know the internet then you know how centralized apps are tracking every move you make. Google, Facebook, Amazon, you name it. This digital world is being monitored 24/7 by entities you know exist but can’t really see.
Currency: definition – a system of money or other items used as a form of exchange. Yes, paper in this day and age is considered money. Which is really the scary part because if you could convince people to accept a piece of paper as money, then convincing them to adopt a digital alternative will be as easy as asking them to throw paper in a trash can.
The wholly trinity of control, surveillance, wealth
Centralized means control, digital means surveillance, currency means wealth. The day we give any government or central bank access to all these three measures, is the day we begin our lives in a communist digital world. At first they’ll sell this digital currency as a convenience, think of all the benefits of a cryptocurrency but with non of them benefiting the user. Government can track every little thing you pay for and where you purchased it.
Dare question the government and you might find yourself in the “naughty list” and have your transactions delayed or even blocked under some guise that you’re a potential criminal. We’ve seen it happen before, even on centralized applications on the internet. It will be worse now because it’s not just a social media account that gets 24hr bans, but your money. Actually this system makes it their money.
China already has a similar system in place where the government social credits every citizen. In China, WeChat is king. Whether paying for a high-end hotel or simply buying a snack from a street vendor, you’re paying using the WeChat app. These transactions are tracked by the government, and depending on the things you purchase and your lifestyle, the government can deny you certain benefits. For example, people who buy cigarettes and alcoholic beverages have their medical aid premiums (costs) increased.
With a centralized digital currency privacy goes out the window, the little quality of privacy we had with cash is gone. Our money can be confiscated at any time, much worse than the confiscation of citizen’s gold in the 1930s. Can’t afford to pay your debts this month? Don’t worry, the government will access your account on your behalf and pay the debt. Or better yet you won’t be able to make any transactions until the debt is paid.
Clearly centralized digital currencies will spell the beginning of an end to some of the basic rights we still enjoy with cash. No doubt a digital currency will only intensify the kind of influence governments will have over us. In a way, centralized applications have proven the concept that data collected from the internet is extremely valuable. The government wants a piece of the pi (pun intended).
I have no doubt that this will become our new reality as we progress further into a digital age. The question I guess now is, how will decentralized cryptocurrencies co-exist with this new system. It will make it easier for government to control how people spend their money i.e. block people from trading cryptocurrencies. But this also creates an opportunity for regulated blockchains like EOS.
As you might remember, the settlement between Block.one and the SEC deemed EOS a utility token and legal according to current law. The settlement also stipulated that all current and future products from Block.one are covered under the agreement, which provides the kind of leeway blockchain products need to innovate for the future. The kind of leeway other blockchains lack. Which is why platforms like Voice are already past the doubt of legality and have been setup for mainstream success.
Where do you see the world headed in terms of decentralization? Can the two systems co-exist or will the government find ways to suppress it?
Thank you for reading!
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