"The root problem with conventional currency is all the trust that's required to make it work. The central bank must be trusted not to debase the currency, but the history of fiat currencies is full of breaches of that trust." - Satoshi Nakamoto
In the late 2000s, Bitcoin’s pseudonymous creator, Satoshi Nakamoto, set out to find solutions to the problems inherent in the financial system.
Nakamoto’s vision for Bitcoin was of a digital currency independent of centralised organisations such as governments and banks. In 2008, these entities had proved themselves poor custodians of the financial system. Many believed time was ripe for change. Time for a system that wasn’t reliant on trust. Time for a system without those who had exploited currency for their own short-term gain.
Nakamoto believed that money could be fair, equal, and trustless. To do this, they wanted to give control back to the people. They set out to create a decentralised financial system where you have control.
Who’s in control?
The idea of a decentralised financial system is extremely popular. For many we spoke to during the Pennydrop project, it was what brought them to Bitcoin. Centralised control over currencies dates back centuries, and back then it made sense. But not today.
Today, we live in a digital age. Technological innovation has exploded over the last two decades, driven by the desire to make things cheaper, safer and easier to use. Our financial system, unfortunately, hasn’t quite caught up.
For economist, Dawie Roodt, crypto affords users the opportunity to make decisions for themselves. He believes that “people are fundamentally good” and they will mostly make the right decision. Therefore, they should have the freedom to make their own mistakes.
Ultimately, as an adult, you wouldn’t ask your Mum for permission to attend a party. So why do you need your bank’s permission (and a whole lot more) to send money across borders?
Roodt also explained the difficulty he had when wrapping his head around the concept of Bitcoin for the first time five years ago, suggesting the concept of control is going to take some getting used to.
“There’s this idea for a private kind of money and it was difficult for me to get my head around that because we’ve been brainwashed to believe that it’s only a government that should be allowed to or can make money,” said Roodt. “Why is that? The only reason it has value is because we believe it has value. It’s exactly the same as the Rand or the Dollar.”
“I realised that Bitcoin was to money what the internet was to human communication”
Our lives rely heavily on the expectation that our financial system will function and deliver the way it was intended to, every day without fail. But that’s not possible. There are so many external factors that affect our money that we, as individuals, have zero control over.
In countries with political unrest, access and equality are giant obstacles for people to manoeuvre around.
For entrepreneur Simon Dingle, Bitcoin brings transparency to the financial system. It removes oppressive forces such as censorship and corruption and opens money up to everyone.
“I’ve always been excited about open-source software, open educational resources, open content movements and really the distribution of our human networks. It’s always for the better [...] Money was always centralised, opaque and exclusionary. The penny dropped for me when I realised that we can use the internet to create a financial system that benefited everybody potentially – that was resistant to censorship, that no-one could take control of.”
Today, we’re no longer only interacting with people in our immediate circle, or within close physical proximity. Our world is becoming increasingly interconnected, which means our financial system has to follow suit.
"Governments can continuously debase and devalue their currency"
Laurence Tilli, founder and manager of crypto group, BBAG Community, went even further in his Pennydrop moment. He explained to us the negative consequences that centralised control has historically had over the financial system and how he saw Bitcoin changing that.
“Governments can continuously debase and devalue their currency,” he explains. “And the more money central banks create - or whether it’s through quantitative easing - the less purchasing power individuals have. We saw it in the 20s with the German Papiermark, in the 40s and 50s with the Greek drachma, the Zimbabwean dollar early 2000s, the Venezualen Bolivar.
“Since the Federal Reserve was created, the US dollar has lost 98% of its value. Bitcoin is a finite resource. There will only ever be 21 million. It’s the first time we’ve had a currency that supply can never be changed, it can’t be manipulated by any central power. So there’s no possibility for Bitcoin to be debased as a currency."
When did it finally sink in for you that cryptocurrency is the future? What excites you about its potential? Was it the shiny new technology? Taking back control of your own money? Was it just plain old human curiosity?
There’s no tale too big, no tale too small. Whether it's a video, a social post or even a blog article, we’d love to hear from you. You can share your story with us on Twitter, YouTube or Facebook using the #pennydropmoment.
Share your moment today and help inspire a movement.