The blockchain: the commitment to decentralization

The blockchain is a decentralized system without intermediaries that is putting States in check. Europe is debating the introduction of the digital euro and cryptocurrencies are in the news every week. What are all these changes due to?

We have already written about the current debate the country is having regarding the digital euro in the previous note Bank of Spain, blockchain and the digital euro. The PSOE has presented the project in Congress and the Bank of Spain warns about a possible financial destabilization that this could bring about.

The debate is still open, the positions are very disparate and blockchain is gaining more and more ground.

The blockchain and governments

The blockchain is forcing us to rethink many ways of managing ourselves financially and politically in the real world. Private entities, governments and global organizations are waiting to see what will happen with cryptocurrencies and the tax systems of each country.

But the importance does not lie in the tax levy or in the restrictions they may have, but in changing the concept of how monetary transactions work, even the notion of a system.

What we understand by decentralization

When we talk about decentralization brought about by the blockchain, we are referring to a new system that exceeds and surpasses the pension and tax systems of each nation. Thanks to these new technologies, alternative forms and different social systems emerge.

Decentralized entities, digital currencies and different types of governance are questioning the foundations of our system as we know it. Entities that are managed through decentralization use blockchains to manage their money, which are more resistant to fraud.

These financial systems are inclusive as they do not discriminate by asset type or origin and the custody of funds is personal. Within them, new forms of democracy are practiced, and decision making does not depend on a nation but is transnational.

A vision of the future

These new practices enabled by the blockchain, these new systems and social contracts will help communities to organize themselves better in the future. Without relying on large centers, they will be completely autonomous and more reliable.

But it may also happen that States will be defunded, and social benefits will be lost. New technologies allow all people to coexist and live together, but this does not always mean that they cooperate with each other. This is where ethics comes in and how important it is to create healthy and fairer systems.

The double face of cryptocurrencies

Cryptocurrencies have, on the one hand, transparency and traceability in operations, as well as financial inclusion. But, on the other hand, they have anonymity and are free from the various state control mechanisms.

Goldman Sachs’ opinion on the blockchain

Goldman Sachs claims that blockchain will be the center of the digital Metaverse space as it will be the technology that will allow owning and transferring assets in the digital world.

Let’s remember that the metaverse is the new generation of the Internet, understood as a sensory and immersive experience. Through different devices and technological developments of the network, the user will experience from another completely revolutionary side many activities of his life.

“Blockchain is the only technology that we believe can uniquely identify any virtual object independent of a central authority,” explained Goldman Sachs. Now, Facebook is the largest technology company currently focusing on the metaverse.

Don Tapscott’s views on blockchain

Don Tapscott is an international economics guru, one of the world’s leading authorities on innovation, media, and the impact of technology on the economy and society.

In recent statements he has said that we are facing a second digital era: that of blockchain and smart objects. He also predicts a system of peer-to-peer asset exchanges through a blockchain system where intermediaries are excluded.

The second digital era

According to Tapscott, the first digital era came with computers, the Internet, social networks, the cloud, among other things. In this second era, technology is introduced into the physical world through millions of smart objects. The pinnacle of this second digital era is the blockchain, as it is the fundamental technology for all this to happen.

Bitcoin should not be confused with the blockchain, as the former is only one of the thousands of applications the system has. And he compares central banks with cryptocurrency networks, as both create money.

The social changes that are coming

The international guru refers to the ultra-connected world in which we already live, a world where we can exchange values among equals. Transaction intermediaries are being replaced by decentralized figures.

Software is replacing banks and they will have to reinvent themselves. The basis is to build new systems with clear, reliable, and transparent principles so that people are encouraged to trust.

Blockchain and sustainability

The energy model we are moving towards, with self-consuming communities and generating their own electricity, is supported thanks to new technologies. In this new system there are many citizens, companies and entities that exchange their energy.

The blockchain revolution is that it allows to streamline, optimize, and facilitate transactions between these new actors that will generate and consume renewable energy. The financial basis will be cryptocurrencies and users will be able to exchange surplus energy according to their short-term needs.

The blockchain will be the basis for smart contracts, digital contracts that self-execute under specific conditions without the need for external verification. Small solar power generators will also benefit as transaction costs are lowered.

The challenges of the new energy system

The technology must mature to be generalized and massified to all sectors of the population, not only the energy sector. In addition, work must be done on rules and regulations, which are still undefined, so that governments can adapt to this new way of operating.

Another challenge is to solve the high electricity consumption in data mining processes, although it only represents 0.43% of the world’s energy.

Conventional finance is coming to an end. The new era is decentralized finance. Venice Swap is the best step to getting into it. Trade on Venice Swap.

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