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Old Payment System

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Written by   137
1 month ago

Why do you hold crypto? Are you in it for the technology? Or are you in it for the crazy games. If it's the latter then that's nothing to be ashamed of. That's what draws most people to crypto.

But it does beg the question. Why do we need crypto in the first place?

Is it all about spinning the wheel in that altcoin casino and getting more dollars?

Well today I'm going to expose how terrifying traditional payment systems are and how they are consolidating power over your financial freedoms into the hands of governments and fat cat C.E.O'S.

All that's to help you understand a really important reason for holding crypto.

Why digital payments are important?

Simply those card payments and paypal transactions that you take for granted drive commerce and the global economy.

Think about how much harder things would be if you had to send Jeff Bezos a handful of sea shells or a load of cash if you wanted to get that hot item on amazon.

Digital payments are super important for us to function as a society and to get the things we need.

For Example:

  • Think about the last time you paid with something like a bank card, paypal or wechat pay. Sure there are a ton of benefits with using all those types of traditional payment systems. It's okay to go for a jog and lose that bank card. All you need to do is ring up your friendly bank and ask them to cancel that card or just freeze it on a banking app and get them to send you out a new one. You don't lose your money and your money is safe. Easy right?

Maybe you bought that bitcoin online for tens of thousands of dollars using paypal only to discover that you were sent a bit of metal stamped with a bitcoin logo. It's all okay, you can submit that payment dispute to get your money back. Also if you spend on a credit card you can earn some pretty insane perks too.

Now with all those types of benefits, I hope you can see why so many people are scratching their heads and wondering why we even have those paper rectangles that we call "cash".

Problems with payment providers.

Let's start with those good old-fashioned credit cards which gives consumers like us all those loyalty points and perks out of the goodness of their hearts.

Yes, you can benefit from them however, here's the deal. There are numerous studies about how consumers with access to large amounts of credit are more likely to use that credit and spend more.

Logically this all make sense. I mean even a normal person walks into a Louise Vuitton without a credit card, how many people can actually afford to buy that snazzy 1000 quid man bag.

However, walking to that store with a credit card and chances are that pretty much anyone could splash that cash, get those credit card points and use that bag to carry around their trezor wallet. Im just kidding, I will not suggest to anyone to buy a Louis Vuitton Bag.

If you don't pay back that credit at the end of the month then you are going to pay an insane rate of interest. That's a key way that the likes of American Express make money.

Positive effect of the governments is that access to credit boosts consumer consumption in the short term. Prettt handy if you are only worried about a several year term in office.

What is credit?

It's simply a mechanism of bringing future cash flows forward to today. So yes, that debt needs to be repaid later and means that long term economic growth is hampered.

However, most politicians out there don't really need to care about that as they'll likely be out of office when the chickens come home to roost.

Dangers of Cashless World

To give you and example of the dangers of a cashless society, you need look no further than Hong Kong. When protest there are popping off a lot of people wanted to attend those pro-democracy gatherings. So how to get there?

In a city as dense as Hong Kong, you're most likely going to use public transport. In Hong Kong, a contactless smart card called an octopus card is used to pay for that train or bus fare.

But guess what, people stopped using thejr octopus card to move around Hong Kong during the protests. The reason why was the fear that Chinese government could use that transaction data to determine who had taken part in a protest and most likely be rewarded with a one way ticket to jail.

So those smart people turned to cash to ensure they didn't leave a digital trace of where they'd gone. Unfortunately in a cashless society using only wechat pay that anonymity simply wouldn't be possible. Step out the line and the chances are you'll be disappeared. So in China, wechat pay could be a great solution if you completely agree with the Chinese communist party, if you don't then the ccp can tap into wechat and leverage one of the greatest government surveillance on the planet to catch you.

Thoughts

Crypto market are looking rosy and I'm sure many of you have made a tidy profit. In all that hype it's easy to lose sight of just why crypto is so valuable. It can act as a store or transfer of value that operates outside of the traditional financial system.

If all this comes to pass why wouldn't people cashout their fiat to crypto. Now that's something to think about and have a nice day!

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Written by   137
1 month ago
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Comments

Your article is extremely interesting, it really gives a lot to hang on, I in particular do not know practically anything about cryptocurrencies but I have proposed to learn a lot and soon since the future is knocking at our doors and cash is already part of the past

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1 month ago

It's better to move our asset into crypto because there's a safety and freedom rather than moving on to cashless transaction which also had control of government.

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1 month ago