With the US presidential elections this year, there’s been a lot of lines being drawn, sides being taken, and the everyday vernacular seems to encompass words such as Democratic, Republican, Libertarian, left-wing, right-wing, and more. Some people feel that you can’t hold aspects of each party’s beliefs and that it’s only one way or the other. So when Bitcoin and virtual currencies are discussed and the word “democracy” comes into play, it makes people a little nervous. Problem is, they’re only nervous because it’s a very misunderstood concept.
What democracy means within any virtual currency protocol, including Ether, is simply that in order for it to work, there has to be a general consensus or agreement on the protocol. This isn’t much different from the value that our fiat currency holds. The government is controlled by a multitude of authoritative leaders- not just one individual who runs the whole gamut. However, it’s not just the government wielding that currency sword. The banks hold even more power than most people realize. They’re not out in the open with their techniques, decisions, and rulings. Central banks generally run their operations with what could be considered “questionable” consent at best. They purposely remove themselves from any democratic “political” process, putting them into the seats of the silent partner of the government, and the assassins of our money. They are businesses after all.
Now, most people usually just sit back and let the government do their thing in other matters, but when it comes to our money people start to get a little antsy and make noise. This is where that “democracy” thing comes in. Virtual currencies generally exist on a system of self-governance. Ether and all other cryptocurrencies, quite literally exist because of the consent of its users. If they did not consent on the rules of the protocol, they wouldn’t use it in the first place. And because of that, it’s what makes the currency more valuable. They would all plainly be source code if it weren’t for its users and their consent. If there are users who don’t fully agree with certain cryptocurrencies’ “waste” of energy, or their mining algorithms, they have the power and potential to bootstrap their own virtual currency or pony up support for the many other altcoins already out there.
It is merely a tiny fraction of the populace that understands what these institutions do, and virtual currencies are such a new financial concept that the majority of people truly don’t believe that they have any intrinsic value. This is where democracy is such an important thing. As long as there are sufficient people who believe in virtual currency’s intrinsic value, and know that the blockchain works, then they will continue to have (and most importantly) hold that value. At the end of the day value is determined upon supply and demand. If virtual currency usage grows and it becomes a mainstay, then its value will increase as well. As time has gone on since virtual currency’s inception, government regulations have come into play and they are now, indeed, considered a commodity in many different countries. A commodity is simply the first step, and as we have learned, (especially with the Apple vs. the Government case), laws are slower to pass than technological advances. Just because our technology advances at a faster rate than our government, there’s no reason to shun a currency that holds more democratic power than the banks.
The majority of people continue to cling to the archaic belief that our fiat currency holds so much intrinsic value because it’s just… always been that way. Yet that paper money people so rarely hold in their wallets, is not backed by gold anymore and it only holds value because a large government and the big banks still say it does. Unfortunately (as stated previously) those banks often tend to work outside of the best interest of the people whose money they house. But when it comes to money, everyone should be able to hold democratic power over their own finances- right? Truth is, they don’t. Generally, whoever holds the most power makes all the rules. And the biggest players right now are the banks since they hold the largest piece of the currency pie. And guess what? That currency pie comes from the kitchens of the people housed outside of those banks. Now… how does that seem fair?