Cryptos - the anti-euro
In the light of recent banking problems in Greece, it might be interesting to revisit the ideas behind the Euro and how they hold up in the world of cryptocurrencies. While some might view Bitcoin as a possible solution to the problem, other take a more sober look and realize that we aren't dealing with a currency crisis as much as a banking crisis.
There are many benefits to multiple countries using the same currency as opposed to everyone having their own. The currency itself can be more stable and reliable, there is an ease of money flow between the countries and the countries themselves become more interconnected in trade and therefore less likely to go to war.
All of these make sense if you consider both the longer history of Europe and how things operated around the turn of the millennium when Euro was introduced and adopted. Trading between different countries and currencies was an extra step adding complexity and delay considering how slow the banks can move.
Benefits of Euro
There are many benefits to multiple countries using the same currency as opposed to everyone having their own. The currency itself can be more stable and reliable, there is an ease of money flow between the countries and the countries themselves become more interconnected in trade and therefore less likely to go to war.
All of these make sense if you consider both the longer history of Europe and how things operated around the turn of the millennium when Euro was introduced and adopted. Trading between different countries and currencies was an extra step adding complexity and delay considering how slow the banks can move.
Benefits of Crypto
Now, if we jump ahead by a decade and a bit to the present state of affairs. On one hand we have the euro debt crisis, but also the modern technologies like Bitcoin and Crypto 2.0s.
If we look at Bitcoin, it can be compared to Euro in some ways. It is a singular currency that was designed to possibly replace the national currencies of multiple countries. Understandably, Bitcoin is more similar to gold than Euro when it comes to how it is issued (mining versus central bank issuance), but that's not what we're focusing on today.
Now, if we look at an efficient Crypto 2.0 system, it can be compared to what we had before the Euro - multiple entities issuing their own currencies and being able to trade between them. Everyone is responsible for how well their own currency performs and the value of their currency reflects that.
What are the benefits of Crypto 2.0 over how things used to work? Since the system is open and all trades happen in real time, the flow of money is greatly improved. Even if we don't use a single currency to settle, we can go to the open market, perform atomic swaps between as many currencies as we need to perform the trade. The buyers are not bound by the currency the sellers accept and vice versa - everyone can hold and accept one currency, while being able to spend it with anyone else easily. In other words, we achieve one of the goals of Euro, facilitating easy international trade, without the need for a single currency.
Conclusions
While adopting a Crypto 2.0 system instead of Euro might not achieve all of the goals of Euro (such as strengthening the currency on a global scene or unifying the monetary policies of multiple countries), it creates an alternative to the Eurozone solution. It might be an approach worth considering if Greece abandons Euro, or perhaps as a way to connect multiple countries in some other region.
If we wish to have a singular currency, let it be Bitcoin, but if we can't have that - lets at least have an efficient way to trade between everything else.
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