The modern financial system is usually traced back to the Bretton Woods accords, which were negotiated in the shadow of World War II. It was a system designed for great power politics to solidify alliances and prevent another World War through shared financial incentives. Beginning with the financial crisis of 2008, and again after 2020, global leaders have called for a second Bretton Woods. But in the blockchain industry, we think that moment already happened when Satoshi Nakamoto published the Bitcoin whitepaper in 2008.
If we are going to create a new system that banks the unbanked, works across borders, and treats everyone fairly, it needs to come from the ground up. We can’t rely on great power politics in the modern era—businesses and individuals need access to an open system with clearly defined rules and logic that they can understand and trust.
Public blockchains, like Bitcoin and Ethereum, are the first truly fair and open global financial system that’s proven to be safe and effective for trillions of dollars worth of transactions across every nation in the world. The next phase of this evolution is decentralized finance (DeFi) technology—rebuilding banking functions like lending, borrowing, and market-making as smart contracts that anyone can use.
Blockchain provides people the exact same data, access, and speed, regardless of where they live in the world. Unlike most online services, which tend to work better the closer you are to Silicon Valley, blockchain technology works exactly the same in San Francisco, California, as in Kandahar, Afghanistan. Compare this to the old system, where a lack of trust and transparency makes transactions expensive and slow, requiring a complex web of banks, regulators, law firms, accountants, and insurance companies to simply enforce a ledger of who owns what. This system was designed around the needs of the people with the most money to lose and often locks the average consumer out of the best investments and highest returns.
Blockchains are public ledgers that anyone can use, and everyone can trust. The cryptocurrencies that use these public blockchains are leading to the creation of an alternative financial system that could be leaner, safer, and more efficient. A system that allows savings, investment, peer-to-peer micropayments, and lending—that could one day enable financial inclusiveness for billions of under- and unbanked people for the first time. The new system is created by people, for people, and links our shared interests across borders, parties, and political systems.
Read the rest on the originally published version via Fast Company
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