Protection against low interest rates (at 5,000 year lows)
It’s now normal that your bank pays near (0%) interest on your savings. The IMF (et al.) wish to transition to negative interest rates, as low as (-4%):IMFBlog
This makes savings in fiat currency earn far less than the inflation rates in healthcare, food, childcare, housing, utility bills, & insurance:Price changes Wages
For institutions, governments, & pension funds - there is now $13 trillion in negative yielding bonds (providing a negative return):World debt with 0% yield Interest rates at 5,000-year lows Bond yields
Protection against systemic risks of the global economic/financial system
Cryptocurrency is a relatively un-correlated asset class (that sits somewhat outside of the banking system):
"Crypto is seen by many of Fidelity’s [institutional] clients as the ultimate non-correlated asset, it will be the best alternative for diversification. As a relative safe haven from political and economic uncertainty, crypto will move to the fill the gap left when world events affect the financial system and more traditional types of asset start to seem less dependable."
Systemic issues include:
- a) $250 trillion in global debt (with further Quantitative Easing to continue)
- b) >$400 trillion in assets at risk globally (potentially to suffer severe depreciation in value)
- c) Bank bail-ins and bank bail-outs Where tax payers have forked out more than $24 Trillion ( CNBC News ) to bail-out failing banks from the last “big recession”, in a system that is unsustainable by design. And where depositors across the world are increasingly likely to have their savings confiscated in a severe “crisis-event” via bail-ins e.g. Cyprus, or Australia’s Crisis Resolution Powers (and Other Measures) Act 2018, of the Banking Act 1959
- d) Escalating trade wars
Protection against capital controls
- Restrictions on how much fiat you can withdraw per day from an ATM or branch (particularly critical during a crisis event)
- The transition to a centralized cashless society (where access to your own wealth can be completely switched off, censored, confiscated, or rejected)
- Where your balance is shared to numerous 3rdparties without your consent
- Restrictions on how much you can move overseas (borderless vs bordered money) e) where medium/large-size purchases require inquiry and consent from the bank
vs. Bitcoin (& other transparent-ledger alternatives)
To ensure privacy and (thus safety of funds):
- a) Whale Alert is one such entity (among many) that stalks large balances and shares the activity to others, publicly: https://twitter.com/whale_alert?lang=en
- b) privacy is essential for many commercial, personal, and public (government) use cases
- c) transparent blockchains allow competitors to data-mine and reconstruct sensitive information such as supply chain data, flow of goods, pricing, balances, and relationships.
- You are traveling through parts of a country with a medium to high violent crime rate. You need to use some of your Bitcoin to pay for something. If every person you transact with knows exactly how much money you have, this is a threat to your personal physical safety.
- You are a business that receives a payment from a supplier. That supplier will be able to see how much money your business has, and therefore can guess at how price sensitive you are in future negotiations. They can see every single other payment you've ever received to that Bitcoin address, and therefore determine what other suppliers you are dealing with and how much you are paying those suppliers. They may be able to roughly determine how many customers you have and how much you charge your customers. This is commercially sensitive information that damages your negotiating position enough to cause you relative financial loss.
- You are a private citizen paying for online goods and services. You are aware that it is common practice for companies to attempt to use "price discrimination" algorithms to attempt to determine the highest prices they can offer future services to you at, and you would prefer they do not have the information advantage of knowing how much you spend and where you spend it.
- You sell cupcakes and receive Bitcoin as payment. It turns out that someone who owned that Bitcoin before you was involved in criminal activity. Now you are worried that you have become a suspect in a criminal case, because the movement of funds to you is a matter of public record. You are also worried that certain Bitcoins that you thought you owned will be considered "tainted" and that others will refuse to accept them as payment.
Bitcoin never were completely anonymous, but it was somewhat anonymous for years until it started getting more attention. Companies specializing in Bitcoin deanonymization started to pop up and tools for deanonymization got better. At first so called Bitcoin mixers were used to reanonymize Bitcoins, but in some point governments started to shut those down and blacklist Bitcoins coming from certain addresses so that those tainted coins could not be used anymore.
To reinvigorate the urge to save money towards a better future
Money that aims to appreciate in value encourages people to save for a better future by providing incentives in which to save excess earnings/capital.
As opposed to the disincentives encouraged by legacy banking systems that make people spend more money and go further into debt:
- a) 59% of Americans (192.93 million) live payday-to payday
- b) 40% would struggle to cover a $400 emergency
- c) Half of Canadians have $200 or Less in savings
- d) 33% of Americans have less than $5,000 saved for retirement
vs. Gold & Silver bullion
- a) Gold is completely centralized, which may have ramifications on its usefulness as a SoV: 1 2 3 4 5 6 7
- b) Gold has been captured by the derivatives market for decades, leading to ongoing price suppression via the futures markets With the supply of physical gold completely captured (above) - Central Banks may never lose control of their price manipulation scheme over gold bullion, making it useless at doing what it is intended to do.
- c) Physical vs digital. Gold lacks portability – it’s more easily confiscated at checkpoints during crisis, and is difficult to store and transport
As Medium of exchange (MoE)
- Lower transaction & merchant fees
- Censorship-resistance for both buyers and merchants. Accounts can be frozen, for purchasing or selling products that are not illegal, but are not mandated by a centralized entity.
- Seamless international payments. Cryptocurrency makes international trade more accessible by removing barriers and restrictions to trade.
- Money arrives much faster.
As a Swiss Bank 2.0
It has been estimated that up to 13-21 trillion pounds or 26% of worlds wealth is being kept in so called offshore accounts. Those accounts can be considered to value privacy in general. Offshore accounts themselves are not illegal, but hiding the money is. Monero does have optional transparency ie. one can share the view key with all the institutions needed. If this money ever gets interested in Monero, we are talking about huge potential.
For example Satis Group's research try to take the offshore banking in the account and they estimate, that Monero could hit 6497$ in 2021, 18498$ in 2023 and 39584$ in 2028.
Here few quotes from the paper that summarize what they think may happen:
"Based on our forecasted growth of targeted markets by cryptoassets and defined share within each peer group, we believe the largest opportunity for cryptoassets will be in store of value markets (which drives substantial upside in particular for XMR and BTC)"
"The largest upside we see in the entire cryptoasset market is in the Privacy sector. Although Privacy networks are newer entrants, we believe the network effects seen from the likes of BTC earlier on will be repeated within dominant coins here. Not only do these coins target the same large and lower velocity store of value market as BTC and Currencies, they present a much deeper value proposition within those markets. As we stated above, the largest drivers of adoption within these networks will be continued pressure from capital controls, currency devaluation, and broader global turmoil. The use cases within the Privacy markets are incredibly sticky and feed on adoption, especially when regulators and law enforcement aremaking efforts to increase forensic penetration into public networks like BTC."