Blockchain & Cryptocurrencies: Could They Be The Future Of World Economics?
Let’s go back to the year 1914, a very important year for America and the world in general. This was the year that the original Federal Reserve Bank was created, and along with its creation came the invention of arguably the most powerful item in modern world history – the US Dollar. This brand new currency was set out to dominate the world economy as we knew it.[2]
At the time, most currencies were stable and pretty valuable because they were backed by the gold standard [1] , so most of the world’s currencies were pretty much aligned with the price of gold, creating the illusion of intrinsic value behind these currencies. This all came to a halt, though, in 1914, when World War 1 started, and most of the world’s currencies were forced to abandon the gold standard to actually pay for the war, which significantly devalued their currencies and caused instability in the world economy, creating an opportunity for the US dollar to become king.
The final straw leading to the dominance of the US Dollar came around 1919, about 3 years into World War 1. Britain, who then had dominance over the world economy, finally abandoned the gold standard, backing their currency, the British Pound. When that happened, countries were buying US bonds under the dollar, which then made way for the US dollar’s rise to supremacy.
The currency is currently backed by our strong central government, and there are numerous adopting it. But is there a chance that the US dollar could soon be replaced with a new era of currencies? Something so potentially massive, it could easily change the entire course of the future world economy if adopted?
Works Cited
Author: Brody Spearman