Every once in a while I like to make this video.
In the video, I try to explain the difference in how money is created.
Cryptocurrencies vs. Fiat currencies (USD, euro, yen).
For me, the biggest difference is that:
Fiat money is created with a promise of work in the future in the form of a loan with interest (debt).
and
Cryptocurrencies are created with work (that is already done) and no debt. (the work is content creation on Steemit for instance or computer calculations with Bitcoin.)
Both are currencies but I prefer the latter.
Example:
If you want to buy a house and go to the bank for a loan. The bank looks at your potential future earnings and bases the amount of the loan on that. (let's say $250,000).
Now comes the magic that still so little people realize.
The bank then 'creates' this $250,000 out of nowhere 'thin air' and gives it to you and also tells you that the interest on the loan is 5%.
You buy a house with this money.
Now, you have to go out into the physical world and create real value there (a job for instance) to pay back the loan that was created with no work.
The funny thing is though that if you fail to repay the loan for whatever reason the bank then becomes the owner of the house that you bought. (even though they never did anything except create a loan with no work).
For some reason, we all believe this is normal and the way things are. But it isn't normal at all.
Yet, there was never an alternative to fiat money because truth be told fiat money is really handy.
It's nice to have a means of exchange that is the same for everyone. It makes transactions so much easier.
But luckily with blockchain and cryptocurrencies, there is a good alternative for the first time in history.
I talk about it more in my vlogs
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