When I was new to the blockchain and cryptocurrencies, my first question to my learned seniors was, "why does cryptocurrency fairytale have to do government bashing?", I mean they are not forcing us to use their services, and in a democratic form, the government does impose taxes on the citizens.
The reply was quite intriguing and that's when I came to know about Violence Hack and how over the years it has taken the shape of formalized looting or what we want to call as ‘taxes’
What is Violence Hack?
The value of currencies are now being backed by either gold or petroleum, but the most prominent factor is acceptance. The more widely the currency is accepted the greater its value or importance.
In order to understand the violence hack, we need to take a hypothetical example to understand it better. Let us go back to the time of anarchy, where the violence was the answer to anything and everything. There was no hard-bound rule in place and the most powerful dictated their terms.
Suppose a king X invaded a kingdom and won the battle to take over it. Now X might have won the battle but still, he does not have any control over the people inhabiting them. The best way to take charge is by taking control of the finances. So, the X decides to release X-coins and make it compulsory for people to pay taxes in X-coins. There is a limited supply of coin out of which a portion of the share has been distributed by the king to his ordinates.
These ordinates keep a portion of the coin and pass on a share towards the lower end of the food chain. The scarcity of the coin makes up for its value and the punishment associated with it if the people are not able to pay them in time is called violence hack, the fear of punishment without committing any crime.
Before X invaded the kingdom, the barter system was commodity based where the farmer exchanged wheat or other food items for things he needed and Shepard did the same by exchanging dairy products.
Now with the introduction of X-coins, the whole barter system is changed, and there is only one source of getting the X-coins i.e from the king or his confidants. This is where violence hack come in the picture. If the farmer fails to pay the taxes in time he receives the punishment, even though he never asked for the introduction of such a system, now he needs to pay taxes on his own produce.
Mind you even without the new tax system the barter system was just working fine, and the use of violence hack made people not only pay extra but also live in constant fear of punishment.
Over the years the form of violence hack has been standardized and we call it taxes, where people do not only pay a portion to the government's what they earn but also on the products they buy with money, after paying the tax on that money.
Satoshi Was not a Big fan of Centralized Banks
This is the reason Satoshi Nakamoto came up with the idea of Bitcoin or cryptocurrencies, which is sensor resistant and apart from paying for the service charges you need not pay any other form of taxes on it.
Satoshi’s Vision was to create a financial system where the peers on the network are responsible for everything and no third-party or authority holds a monopoly over people's money. The system which cannot be compromised with violence hack no matter how sophisticated it is.
Cryptocurrency Negates the Violence Hack
Cryptocurrencies were created so that we do not have to be dependent on a centralized institution for any kind of support or need. Banks are in business because they promise to keep our money safe and help us make transactions using the database they have. In return, we need to pay taxes on our own money and not just for the services we use.
Cryptocurrency works on the distributed ledger technology or decentralization, where the database is universal and can be downloaded by anyone with enough space on their PC. all the transaction are verified by the peers on the network. Each transaction is encrypted making it impossible for anyone to make any changes in the ledger.
The other factor that helps the cryptocurrencies to negate the violence hack is decentralization and how even the creator or his ordinates does not hold the monopoly over their own asset. anyone with a good computer can use it for cryptocurrency mining or transaction verification process to earn a block reward cum digital asset.
In the case of the traditional form of currency, you can earn the benefits if you are a close aid to the creator or the one handling the currencies, but in case of cryptos either you can mine it or buy it against the fiat.
Thus cryptocurrencies take the power out of the hands of the banks and put it back in the hands of people who are the real owner of that money.
Why Cryptocurrencies Are the Best Alternative To Banks?
Banks have failed us big-time, look at the world debt which is nearing a $22 trillion dollar and no matter which violence hack dies the bank use, it's already a lost cause, there is no coming back from there. The situation is so bad that we are nearing another major financial disruption.
Look at Venezuela they are already fighting a lost battle and their economy is in shambles, banks and other centralized institutions have failed us big time.
Although, it's a long way until we are able to convince the regulators that cryptocurrency is the answer to most of the financial woes created out of the greed by banks and financial institutions. Any significant change needs some time and the resistance force is the government and Banks so it might be a long battle.