Cryptocurrencies offer the potential for a revolution in decentralization. Whereas once financial companies were clustered in urban centers like New York, London, and Tokyo, where the industry heavyweights and the structures that supported them conducted the business that moved the world, blockchain technology has leveled the playing field, geographically speaking. Now, companies that once would have little choice but to pay the high rents for a Wall Street suite are finding homes in other boroughs and other cities. Worldwide, new financial powerhouses, such as Abu Dhabi, are emerging to rival New York or London. With blockchain technology, the term financial center might well grow obsolete.
Over the past several years, crypto has suffered its detractors. Household names like Warren Buffett and Jamie Dimon denounced the whole of the crypto world as one big bubble. Central banks warned of their terrible impact on economies. Regulators smelled fraud and market manipulation. As explained by Konstantino Anthis in a Finance Magnets article, over the past several months, critics in the private sector have largely been silenced.
The bubble they saw never burst. Now, investment banks and other companies that once avoided cryptocurrencies are now embracing them. Regulators and central banks remain the main detractors. As Anthis explains, this is largely because a decentralization revolution is under way, and this decentralization puts financial power in the hands of the general public, as opposed to where it has resided for the past century, in the hands of governments and central banks.
Blockchain can do more than loosen the financial chains of central banks. It also has the potential to provide a solution to the privacy crisis that has recently had many civil rights groups up in arms. As Johnathan Greenspoon explains in The Michigan Review, a solution to the issue of governmental spying, such as conducted by the NSA, and data mining, such as conducted by Facebook and Google, seems slim. Governments have been weak about creating regulation to protect privacy, and, rest assured, so long as businesses and government agencies can benefit from privacy invasion, they will continue.
Blockchain technology can reduce people’s dependence on applications that allow spying. By its very nature, blockchain guarantees anonymity. Development of blockchain technologies that could make Facebook, Uber, and Western Union obsolete are already in the works. Soon, storing money in a secure account may no longer require a bank. With these developments underway, the prospect of accelerating decentralization is stronger than ever.