Cryptocurrency Success: Become The Leading Financial Center
There are a lot of discussions surrounding what is going to be the most successful cryptocurrency project. Everyone wants to know what coins will skyrocket over the next half decade.
Of course, when dealing with markets, this is a hard question to answer. They tend to be poor reflections on value. For this reason, we have to ignore them to a certain degree.
Instead, we have to look to history to tell us what happened with currencies, money, finance, and business. Here we get some indication of what will take place.
If cryptocurrency becomes the dominate form of money in the future, then it is reasonable to expect it to follow the same pattern as what we saw in the physical world.
Hive Financial Network
Over the past year, we discussed many ideas regarding some future ideas pertaining to Hive. A lot of this centered around the Hive Backed Dollar and the potential it carries. Much of this is in the mental phase although there are things being built which are vital.
One of the concepts we introduced was the Hive Financial Network. In it, we delved into the idea of Hive bonds. This led to even further discussions.
The net result was some optimism about HBD along with the potential it offers. Many still do not buy into it yet we are seeing a foundation going into place. There is a lot of work to do but the potential is there.
Why do I say this? At the same time, why is there so much attention placed upon finance and the stablecoin.
It stems from one simple fact throughout history:
The currency that is tied to the location of the world's leading financial center always became the reserve currency.
This is something that goes all the way back to the days of the Roman empire. Hence, for Hive to excel, it needs to create a robust financial network that can ultimate add insane value to the coins located at the base layer.
Extending Past Borders
One of the main reasons why reserve currencies operate in a different manner is due to the fact that demand extends past one's borders. Again, throughout history, we see where currency had imitations, often with greater commodity substance, yet still were not valued as much as the original. Why is this? It all comes down to confidence.
The US Dollar is so powerful today simply due to the fact that Wall Street is financial epicenter for the entire world. London, Tokyo, and Hong Kong are not even in the same realm. This provides enormous power to the USD.
It is also why it extends far beyond the shores of the US. When China buys US Treasuries, it is affecting the global demand of USD. The Federal Reserve doesn't even have to do anything for this to take place.
We can arrive at the same conclusion regarding the digital world. Even though it operates in a completely different fashion, we can see how the network effect is applies. Within the world of blockchain, the network(s) that can construct a sophisticated financial center will thrive.
How many do we see doing this?
It should be one of the primary areas of focus for all Web 3 system. Becoming the leading financial center is the main goal.
Ultimately, most of the financial activity will lead back to the source. Here is where HBD stands to benefit greatly. Something like the Hive Financial Network will do wonders to aid in this pursuit.
DeFi Is Key
One of the keys to transitioning the existing financial system is decentralized finance (DeFi). This is a revolutionary concept that helps to move the power center from the present financial world to the digital.
Cryptocurrency was designed for this realm. It never existed in physical form. This truly changes much of what will be utilized in the future.
DeFi has incredible potential due to the fact that it allows anyone to participate. It is a move that will grow the numbers significantly. Hence, forming true DeFi is the key.
Of course, as we saw over the last year, we were infected with a lot of the same actions that are present on Wall Street. To me, this is not cryptocurrency and it certainly was not DeFi.
Building out a thriving DeFi network will be the downfall of the existing financial system. The only question is where that takes place.
If we keep the focus upon networks, we see who this could unfold. Those that are truly out of the reach of governments, i.e. decentralized, will have a chance to develop without intrusion. This was a problem over the past century as academics and other leading thinkers bought into the idea that governments could control the economy. This has shown itself to not be true.
Therefore, the challenge before Hive is to become a leading financial center for DeFi activities.
With the actions of centralized entities putting a bad taste in many people's mouths, DeFi has the opportunity to reverse that. Through transparency, it can provide confidence since anyone utilizing the platforms realizes it is outside the control of any single entity.
This is not something we presently see. Corruption is rampant because the financial world is full of entities that assert their control over everything.
Hive can alter this. Since it is a decentralized base layer, it already outside the bounds of most other projects.
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