Battle for money

Paper money Once they were considered an adventure, cryptocurrencies-a bubble. But the story is cyclical. How Bitcoin repeats the path of banknotes, and what awaits us next? We analyze the similarities and lessons of the past.

The introduction of new money into circulation is not just a bank whim or a toy for financiers. This is a chess party where the bet is the economy itself. The error in one course, and trust in the new currency evaporates like water in the sun. Paper money once went this path, faced with contempt, panic and depreciation. In the same way, today cryptocurrencies storm the financial Olympus, fighting for a place in the sun.

First Paper Revolution: when the money became easy

In the XVIII century, the financial system of Europe trembled on the verge of changes. Gold and silver were reliable, but literally heavy. I needed a way to simplify the calculations, but how to make people believe that a thin sheet of paper is worth no less than a golden Louidor? Attempts were made, and more than once. The most loud of them happened in France in 1716, when financier John Law decided that paper banknotes could replace gold. He launched a large -scale campaign: he convinced people that banknotes were reliable, released them in large quantities and … crashed. When the emission got out of control, the people realized that there was paper, and gold is gold.

However, the world has learned lessons. By the 19th century, paper money came into fashion, but already under tough state control. Russia under Nicholas I in 1839 fixed its financial system with a silver ruble, and the UK introduced the gold standard. People are used to trust.

Gold paper: who whom

The XIX century became an arena of the struggle for monetary stability. It seemed that paper money found their balance, but the 20th century again mixed cards. The First World War caused the avalanche of emissions, Great Depression made gold too expensive, and in 1971 the United States refused the golden support of the dollar. From this moment on, money existed solely on trust in the state. It seemed that there was nowhere to go further. But history does not stand still.

Cryptocurrency coming: Bitcoin, as an answer to a crisis

In 2009, against the backdrop of a financial crisis, he appeared Bitcoin – The world's first cryptocurrency. Not just another digital asset, but a call of an existing system. He did not depend on the banks, did not obey the regulators, was not published for the sake of politicians. It was impossible to just take it and devalue.

Ironically, but fate repeated: at first people did not believe. As they did not believe in paper money in the XVIII century. Then the first supporters, enthusiasts began to appear, ready to put on this new form of money. Bitcoin was followed by Ethereum, Litecoin and thousands of other crypto acts. Just as the coins were replaced by paper money, so cryptocurrencies today claim a place among classic fiat currencies.

Similarities and differences: what do we see

If you lay out everything into parts, then the process of introducing paper money and cryptocurrencies is amazingly similar:

1. Skepticism and distrust. People do not immediately accept new money. Paper money was called “fakes”, bitcoin – “pyramid”.
2. Attempts by state control. Over time, paper money went under the control of the Central Bank. Today, the process of regulating cryptocurrencies is just beginning.
3. Colors and ups. In the history of paper money there were financial bubbles and crises. In cryptocurrencies – ups and falling, from the collapse of bitcoin in 2018 to his last record maximum.
4. Inevitable acceptance. When paper money became more convenient than coins, they were accepted. When cryptocurrencies become more convenient than bank transfers, they will be accepted.

Future: We follow the bets

Today, states are not going to repeat the mistakes of the 18th century. They carefully monitor the cryptot, but so far they are in no hurry with decisive actions. This does not cancel the fact that bitcoin and other crypto acts can repeat the path of paper money and become an integral part of the world economy.

History moves in a circle. Who would have thought in the 19th century that someday gold would remain only in bank storage facilities, and people will pay paper banknotes without real support? Perhaps, after a hundred years, Bitcoin and other digital assets will become the same familiar part of everyday life, like plastic cards today. It remains only to wait and observe the development of events.

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