Governments are showing Symptoms of Crypto FOMOApril 24, 2021
The concept of FOMO or fear of missing out is nothing new on the crypto scene, reaching back to its always embryonic beginnings. Ever since the story of a couple of pizzas that were paid 10,000 BTC tokens began making their rounds in 2010 (and never stopped since), there has been a growing sense among many individuals that they are missing an incredible opportunity in cryptocurrency investment. To date, that same emotion brought about some success and countless other failures.
Some of those failures have been beyond catastrophic for individuals and their families who lost things like life savings in disastrous investment moves. However, for most of the crypto history, the phenomenon of FOMO was reserved for individual investors and their desires. Now, the tide of FOMO appears to be sweeping over governments as well. These entities are not gunning to invest billions of USD of national funds into crypto – after all, they have gold bullion already for the same purposes. Instead, countries are racing to create their own version of crypto with individual CBDCs – central bank digital currencies.
One thing needs to be addressed first and foremost. That is that the term britcoin does not sound half bad in a linguistic sense. However, any deeper dive into the same term opens up a world of the contradictory information and half-baked ideas that quickly start piling up on each other. The same process is something that for years, crypto professionals, and experts saw in any governmental initiative that deals with blockchain and native central bank-issued tokens. Britcoin is just the latest one in that regard. Here as well, experts are arguing that the GBP, just like USD or any other fiat currency, is already a digital currency in its own right.
That includes even the EUR, which is not backed by an individual central bank that belongs to a nation, but the entire European Union. It is very daunting to imagine any modern currency that is not already a digital currency as well. In contrast, only a small amount of money presently in circulation in the entire world is not digital in any sense. For example, the German government makes its bank still accept Deutsche Mark, which has long since been discontinued, as valid. So, two German Marks can still be exchanged in Germany for one EUR. Yet, it is one of the rare examples of existing currencies that are not digital in any shape or form. This unique fact makes the drive of governments to create their own digital currency only stranger.
Types of Records
People are quick to jump to conclusions about how money operates. For example, the fact that physical cash exists is reason enough for many to believe that its paper and coin form somehow drastically defines it. Yet, the reality of almost all modern enterprises, no matter if it is a digital currency, esports league, or fiat monetary system of a small nation, is that they are all digital. When it boils down, all of these things are digital ledgers of influxes of data, outflows, and all other procedures that are relevant for any given system.
In the case of bitcoin and its BTC token, that system is recorded on a decentralized ledger through the procedures of a blockchain network. In the case of USD and the Federal Reserve, that system is recorded on a centralized ledger that follows all of the data. This ledger and the entities that the government decides how that system is controlled, regulated and directed. It makes no difference if it includes physical elements like coins or if it is completely digital like any cryptocurrency network. It all comes down to a ledger and that is why concepts like CBDC are so strange to people who actually understand both the monetary systems in their traditional sense and the way digital currencies are supposed to operate.
Centralized vs Decentralized
The key difference between a bitcoin and a BTC is not in the fact that the UK GBP is available in something a person can put in their pocket. Instead, it lies in the notion that the BTC is completely decentralized and independent from any form of a central overview. That does not include just the government and their regulatory and enforcement bodies. It covers the founder or founders of bitcoin, any mining organization, and everyone and anyone who might desire to rise to this role.
So, the entity of the BTC crypto network is independent of anyone and anything, apart from the internal mechanisms that are hard-coded into the network itself. There is no way to change or edit them in any shape or form, and this provides cryptocurrencies, in general, their main advantage. They are unique and unusual, but very useful and also fiercely independent of all who might aim to somehow curtail their effectiveness for ordinary users.
While this might be somewhat intuitive to regular citizens of almost any country, it is likely completely clear to any government in the world and their financial experts. They understand that the effectiveness and the entire point of having a centralized currency that is fully digital – or better said, a version of a fiat currency that is all-digital – would be completely redundant. An exception, in this case, is China and its PBoC’s issued digital currency that is already in testing. This country, with its growing relevance and economic power, is trying to mitigate the issues of a frog leap technological and social development.
There, with a large percentage of the population having little or no access to traditional banking services, an option of having a digital type of yuan currency, which can then be used for some financial technological alternatives, like a digital loan, is a huge benefit. However, the UK is not a country like that. It is odd even to think about the same country offering its citizens something like bitcoin and having no clue why and how is that different from using something like PayPal loaded with GBP. Yet, the fear of missing out on something – in this case, the Chinese development of a digital currency – will allow for the same idea to actually take root.