The Future Of Decentralized Monetary System In The Coming Years
Handling money and financial transactions have evolved in the wake of civilization and technological advancement. In the early times, the safety of one’s assets can be guaranteed in how discrete the holder of such an asset is in keeping them.
Before the establishment of banks, people dig holes in secured locations to keep their money, others find safe spots in roof and crevices to safeguard their cash, a practice still in operation today. Majority of people love the freedom that comes with them making decisions relating to their finances. The advent of modern banking or financial institutions did introduce a certain level of restriction, a development that man keeps inventing ways to subvert.
Decentralized Monetary System In The Digital Space
In this system, multiple parties make financial decisions as soothing to them. The concept of decentralization is sufficiently boosted by the advent of cryptocurrencies using blockchain technology which in many ways helps to provide an acceptable level of anonymity. The decentralized nature of blockchain technology means that it doesn't rely on a central point of control. A lack of a single authority makes the system fairer and considerably more secure. Decentralization is believed to be a credible alternative in digital space as it is gaining considerable traction but many fear for its future because of the perceived risks associated.
One of the fears of a decentralized monetary system as noted by Rohit Khare as published in The PACE project is that in a large-scale system, certain domain-specific behaviors may indicate the trustworthiness of a user. Trust relationships should generally improve when good behavior is perceived as a particular peer.
Similarly, when dishonest behavior is perceived, trust relationships should be downgraded accordingly. Rohit also hinted on impersonation, fraudulent activities, collusion etc. as other critical threats bedeviling the decentralized system.
The major proponents of decentralization in the cryptosphere hide behind decentralized exchanges that help curb the untrustworthiness of the peers in the decentralized system.
Decentralized cryptocurrency exchange offers in addition to the credibility of transactions, the opportunity for users or customer total control of the asset. Users tend to keep their private keys, the encrypted cryptographic code that is needed to access cryptocurrencies in decentralized exchange’s wallets. This way, holders can deploy the assets without fear of regulations.
Fate Of Decentralization
In the cryptosphere today, decentralization is not just gaining traction, it is serving as the long-sought solution to the many inconveniences that surrounds regulated financial institutions and centralized cryptocurrency exchanges alike. The utmost clamor is for stakeholders in the financial system to support the technological development of decentralized systems.
Should the proponents of this decentralized monetary system with regards to cryptocurrencies get it right with regulatory agencies which many believe would not happen in the next few years, then we would experience a monetary era where everyone would be their own “central banks”.