The era of digital currencies .. Will it give us freedom or subjugate us to Big Brother?

Did you know that women in Saudi Arabia cannot open their own bank account, in Indonesia the instability of the rupee makes it impossible to maintain business, but what if there is a currency that everyone can access, a currency that they feel is their own, Of their own, a currency without borders, devoid of government legislation and cannot be confiscated? ''

This is how Easy Morales, the star of the series "StartUp", addressed her first arguments during her presentation to persuade a commercial company to finance its project and its digital currency "Gencoin", then continued: "Money spoils people, but what no one admits is that people are the ones who spoil money." You might put an end to that. "

Gencoin is a digital currency "better than Bitcoin," or this is what Easy claims, and provides levels of stability, security and privacy than any other digital currency.

It is not talking about a payment system like "paypal" or "American express", but rather a separate currency.

But what motivates us to design a currency for trading electronically, will this not lead to the ruin of banks and the traditional banking system and the displacement of workers in the economic field?

This question is the first thing that comes to anyone's mind when it comes to talking about digitization in all areas: Are we going to replace?

Will we lose our jobs?

But make sure that what we are talking about is much more than job replacement.

Easy Morales - Star of the TV series StartUp

The Chinese used seashells as money 3000 years ago, and since then societies have been searching for forms of money that are easy to carry, easy to divide (a quarter of a pound, half a pound, etc.), not easily damaged, and available.

With the passage of time the money became less and more symbolic.

Tangible commodities - such as gold - gave way to symbolic paper (banknotes) and now to ephemeral numbers in the computer.

Now everything is numbered, in some countries the use of traditional money is almost non-existent.

Clients use payment applications such as "WeChat pay" in China, or Vodafone digital wallet in Egypt, or "paypal", the most famous in the world, and most companies and payment systems are run by private institutions such as "Paypal", "Zelle", and "M-pesa". "The Kenyan currency used by Vodafone (1) in several countries, all of which are private companies, which has led governments to consider creating a digital currency;

For fear of leaving the digital economies to the private sector only.

PayPal

Cash is coins and paper, this is what you may think of, but what we care about is the most abstract meaning;

Cash is the money the government owes you.

In the past, this was a real debt owed by the state, and this debt formula still exists in the currencies of some countries such as Britain.

In our era, this theoretical guarantee of your right has been transformed into an abstract guarantee, which guarantees the holder of the currency the right to use it in the buying and selling operations.

On the other hand, the numbers in your bank account indicate what the bank owes you.

When you go to the ATM and put your credit card, and you withdraw some cash, you are converting the bank’s debt into government debt, that is, into liquid money.

Some people trust the government and its promise more. The bet here is that the government is impossible to bankrupt - this belief is true in most countries - unlike banks.

Five British pounds coin.

The phrase debt under the word "Bank of England"

Gabriel Sodberg, an economist at the Riksbank, says that because of this, his country may be in trouble if it decides to fully adopt electronic forms of cash.

The main fear here is that if there is such a comprehensive transformation in the Swedish financial system, people may lose confidence in the entire financial system.

In fact, everyone in Sweden uses an application called "Swish" for buying and selling operations, and because of this widespread use of the application, and the scarcity of use of cash, Sweden may stop producing cash by 2023. (2)

Do you have a friend who always talks to you about his love for paper books and that he cannot integrate with the e-book because he does not touch it?

Most likely your friend, and everyone like him, may grieve for the abolition of coins in this arbitrary way without taking into account the rights of lovers of touching money.

However, those concerned with the real problems are those who are drinking the scourge of digital illiteracy. The fear here is that they may not consider themselves part of the financial system, and no country wants this, of course.

Therefore, the prototype that Sweden is preparing was taken into account to have a version that is easy to use and negotiate for those who have difficulty dealing with modern technology.

This major shift will not be the Swedish government alone, but will hold a referendum for the people;

Because it is not an easy decision to change the financial system completely.

Oh, how would this currency be?

Is it the same as Bitcoin with a new name?

Would they invent an electronic gum to replace change, as grocers do in Egypt?

Before answering these questions, we have another story about money, but this time from the far east, from China.

Unlike Sweden, China has already made up.

The renminbi is coming.

Where the governor of the People's Bank of China - the central bank - stated that the Chinese digital currency "will be out soon" (3), and indeed the renminbi has entered the experimental stage (4) by the end of April 2020. The cash has already been transferred to retirement in China, as Sweden has "Swish" China has two widespread applications: Alipay and Wechat Pay, which are applications that rely on QR technology in payment, and these applications have reached their peak in the past three years.

The transfer and payment (5) that took place through the applications was estimated at more than 80% of the total operations for the year 2018 in China alone - applications are used in other Chinese-speaking countries - in contrast to 2013, for example, where it was barely 20%.

It is not known how much or what kind of data the Chinese government acquired as a result of its monitoring of the purchases and transfers of "Wechat" and "Alipay" customers, but with the issuance of its sovereign currency - compatible with these applications of course - (6) it is expected that the outcome of this information will increase, This sounds scary, even suspicious.

What raises questions from several angles is that Facebook's announcement (7) of its intention to launch its digital currency, "Libra," was the catalyst for China to issue the renminbi.

Of course, when mentioning money, one of the planet’s richest men should not be mentioned.

Mark Zuckerberg.

"An extravagant privilege", this is what was called the dollar by Valerie Giscard d'Estaing, the former president of France, do you know why?

The dollar is used as the global reserve currency, meaning that when countries want to save, they will save in dollars, and this increases its position, and thus gives the exporting country a privilege.

Because it is used by many countries, and this term is not applied to a currency unless it is universal in terms of handling and use.

Now imagine with me a digital copy of this dollar, the country that will issue a currency that is widely used to reach the level of the dollar as a digital reserve will be granted the same privilege.

If we put China in mind, it would like to have this privilege of its share, which is what it seeks to accelerate the exit of the renminbi to the world as soon as possible, as it will govern the global digital economy, or so they imagine.

The problem is that the renminbi will not pose a significant threat;

Simply because lawmakers in the West do not trust him, and he does not have full liquidity.

The race between China and Zuckerberg is now like a struggle for the throne.

The Chinese central bank stated that its currency would be like "Libra" (8), while Zuckerberg (9) insisted to his country's leaders that if they do not allow him to dominate the throne of the global economy - by agreeing to the issuance of Libra - then China will surely do.

Thinking about it, the leaders and lawmakers do not trust the Chinese renminbi (10), but they certainly will not trust a person who has been tried for leaking and selling public data, and those data, which we are about to discuss, are not like any data.

Obviously, you know that what prompted Mark to use the China card as a means of pressure on lawmakers was not his love for the public good of his country, or even of the world, or that the real motive was most likely his dream of controlling the world.

Well, if he doesn't want to take over the world then he definitely wants your money.

Yeah, please feel important.

If China owns WeChat and Sweden owns Swish, then Western examples such as PayPal, Western Union, Visa, and American express are the paved roads for the digital economy.

Huo Van Stens, a former advisor to the head of the British Central Bank, pointed out that these companies added (11) more percentage value than the "FAANGs" combined (Facebook, Amazon, Apple, Netflix, Google).

Every time someone uses their credit card, these companies benefit from that process, and if it is by a penny, it will double in the end, because that happens hundreds of thousands of times per second.

Zuckerberg knows that.

Mark not only wants this money, but by proposing to use Libra, he wants the entire global financial system to be under his control, by putting Libra in place of the dollar, and the extravagant privilege turns into one that no one can afford at all.

But what if central banks came together and launched their "unified hegemonic currency" as former central bank governor Mark Carney suggested, would it be a good alternative to the dollar?

Especially with the Federal Reserve’s intention not to release digital dollars?

(12)

“It is possible that his proposal will turn into reality,” Andy Pelligo, an economist at the University of Rome Tor Vergata, tells Maidan, and adds: “Given the continuing risks and the continuing threat that innovation faces in monetary policies in the world at the present time, I think the move Towards an artificial dominance currency would be an expected step. "

Even when the proposal turns into reality, trust between citizens and central banks is still poorly established, but it will not remain that way, Bellejo says to "Maidan":

"There is an interest, not just for the Bank of England, but for central banks in general to restore people's confidence and not let them destroy the notion that central banks are where money is safe."

"Certainly there is what is called private money," Pelego assures to "Maidan" whether there is a clear and commonly recognized concept of "private money" among central banks. He continues: "There are many banking institutions that do not have legal problems to submit any kind of reports about "The money they have in their possession and where it came from at all. There will always be people whose money will never be revealed."

This reinforces the concept of private money, or money that the government does not reach.

Andy Bellejo - Economic Researcher at the University of Rome Tor Vergata

Do you remember the last time you used cash?

What did you buy?

Candy?

Sleeping pills?

Prohibitions?

Have you rented a womb for your terminally ill wife and you cannot conceive by normal means?

Nobody blames you for your money for what you spent, or for where you earned it, this is what no one has anything to do with, or maybe he?

If you were to buy some contraband, do you think you would like the government to know about this?

Of course no one wants that.

This feature is precisely the most important characteristic of cash, not credit cards, not cryptocurrencies, perhaps bitcoin, but cash and cash alone possesses this lost privacy, which perhaps if Al-Mutanabi was among us now, he would sing a poem from a thousand houses like the pendants of ignorance to flirt with.

Some people put their complete confidence in their government, as we said before, they may sacrifice privacy in the hope that the government will never go bankrupt and waste their money.

But the rest of the people will not accept giving up their financial privacy;

Simply because it does not trust the government on the issue of privacy - if not at all - then let alone financial privacy?

But Jeremy Warner, economist and journalist for The Daily Telegraph, believes that there is no such thing as private money (13) as an entrenched concept in central banks.

And since it is a necessary evil, trust in the government will be easier than trusting Zuckerberg and falling into his trap.

So, since it is a necessary evil, can currencies be designed by the government, but with the feature of the government intentionally "turning a blind eye" to this information?

Especially since it is technically possible to do this thanks to coding techniques such as (14) "Zero-knowledge-proof", used in the "Z-cash" system?

There is no evidence in any way that the government of any country might turn a blind eye, when it is able to know valuable data like this about its citizens, it's like you play hide and seek with the government, and then the government cheats on it.

What about Bitcoin?

Why not create a currency that resembles it, or use it as a currency?

The answer involves a philosophical, ethical, and technical side.

First, what does resemblance mean?

Central banks and financial institutions adopt some of the characteristics of Bitcoin and apply them according to their goals, but can they be adopted as real digital currencies?

No, the version of Bitcoin or Libra that governments may adopt, or any currency that comes out of the womb of central banks, loses the most important characteristics of real cryptocurrencies: decentralization.

Cryptocurrencies are decentralized, as there is no entity responsible for them in the authoritarian sense, and there are no failures, or even weaknesses that any opponent can attack.

In the absence of an intermediary such as the bank that witnesses the completion of the transactions, each operation must be approved by the contract - the sender and the receiver - in the network of cryptocurrencies, but this requires enormous computing power;

This is why the Bitcoin transfer process may take an hour or longer to complete.

Can any digital currency reach the same level of security and privacy as Bitcoin?

Mohamed Abdel Basit, founder and director of cybersecurity at Seekurity, answers Meydan’s question, saying: “None of these currencies will be able to access the privacy that Bitcoin has. When building these currencies, the first thing that is taken into consideration is privacy, and its being Built with Blockchain technology supports this consideration. Let's not forget that its inception was to exchange money between "gamers" even if the identity of the sender and the receiver was unknown, and what helped spread their circulation further is that particular point: privacy. By tracking the sender and the receiver here, the currency has lost its most important characteristic, which is decentralization. If we look at one of the cryptocurrency vulnerabilities, for example (The 51% attack). When one of the parties in ownership holds 51% of Bitcoin, it will have the upper hand in controlling the entire process; This party can cancel the process or reverse it for any reason he wants. "

When we asked him about whether this is the opposite of the concept of decentralization, he said: “Indeed, this is against the concept of decentralization, but it is reassuring that no party in the world owns 51% of Bitcoin, even China, which owns the largest amount of Bitcoin, has not reached that percentage. Therefore, there is no control over it, and this is the secret of its power, which is to reinforce its decentralization. "

On the speed of circulation, Mohamed Abdel Basit says to "Maidan":

"The same speed can be reached in trading easily. When we transfer an amount of money in traditional banks, for example, what delays this trading is the procedures, and there are also systems that analyze this trading; who is this sender? Is he allowed to trade? And what is the source of this transfer?" Followed by taxes, etc. Some countries do not have "Madame Afaf" in this process to act as references, because they have automated these systems, which speeds up circulation. It will be difficult for any country not to know the sender, the receiver, and the reason for the operation, especially if the amount transferred is This knowledge violates privacy and decentralization, because it can simply stop the process if it turns out that the amount is being sent to a terrorist, for example.

Mohammed Abdel Basset to Maidan

In a recent article, Gilles Carlson (15), the co-founder of the Open Money Initiative, argued that decentralized cryptocurrencies - such as Bitcoin - might not have been used extensively by the public.

Its purpose was mainly to avoid transactions being subjected to oversight;

From paying for drugs or sex, to supporting dissident political opponents, or getting money from countries where transactions are subject to restrictive currency controls.

So Bitcoin users have given up speed - it takes hours to convert - and cost in favor of just one feature: "censorship resistance."

Let us now imagine a world that carries out all its financial dealings with that kind of dealings, it is a terrifying world indeed!

I can almost assure you that you heard that the world will change hundreds of times after the "Covid-19" pandemic in the past few weeks, even if the change will take place at the level of organizations and will not extend to you individually soon, but there is no denying that this is the reality.

Cryptocurrencies are making promises to transform the global financial system, as does the coronavirus pandemic.

Since the virus is fast spreading, some people guessed that it might spread through the transfer of cash, so they said that using a digital wallet as an advertisement for a wallet is an advantage, for example.

But the danger still exists despite that. The virus may have spread to you by touching an automated teller machine after one of those infected or carrying the disease, so some have suggested that the pandemic may accelerate the release of digital currencies, so will it?

“Well, that's a very difficult problem,” Andy Bellego comments.

“First of all, there is still no clear response from central banks on how to manage the crisis, but the Covid-19 crisis has certainly shaken people's confidence, and this could shift their attention to digital cash.

We can actually expect a boom in digital cash in the coming period due to the uncertainty. "

Of course, the phenomenon of getting the rest of your money in the form of chewing gum will end, but the crisis has revealed many of the faults of the global financial system. Here are eleven members of Congress calling for the US Treasury to use blockchain technology (16), the technology on which digital currencies will be built, to reach Monthly aid to those who are entitled to it.

Even before those coins were issued, this point appears to be one of its main advantages.

It is absolutely free for you to put your full trust in the government basket, or to demand a digital financial system that gives you real financial freedom. Although it is difficult to achieve and may take longer, freedom certainly has a price.

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