Cryptocurrency Explained for Beginners

2022 and the Case for Cryptocurrency

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💡 "Cryptocurrencies are the New Hedge Against the Dying Dollar"

Table of Contents

Intro – The Same Old World Of March 2022

Photo by Sharon McCutcheon / Unsplash

In March of 2019, governments from all around the world took unprecedented actions to shut their borders and force many of their citizens to stay home. They had now acknowledged that there was a disease called Covid 19 that could spread across the world, kill many people, and slow down the economy.

And that it did..

Over the last 2 years as many people lost their jobs especially those in sectors involving global travel. Others lost people who were close to them as a result of the disease. These tragedies collectively resulted in global economies tumbling with the major stock markets imploding by 20~30%. In response, the U.S federal reserve did what they had done before to save the global economy: Print more money and give them as stimulus checks to Americans. The concept of giving free money to people so that they can consume can make economic sense. The economy is after all about the flow of money and as long as the cycle of people buying things and companies are making things for people to buy continues and grows, the economy will be okay.

Print more to save the economy!

Fast forward 2 years…

The year 2022 would show again that history has repeated itself in an ugly way.

1. A country called Russia invades another country called Ukraine
2. Covid-19 is still around and has mutated to survive
3. Inflation – the highest rise in prices in 40 years

The real question is: Should we allow things like world wars, viruses, and political actions “supposedly” taken on our behalf haunt us and make us poor?

It is tragic but realistic to assume that the human race will not change its attitudes on power and viruses will continue to survive and threaten the human race. But what about my third point?

Problems with the Current Financial System

It now takes me more to fill up gas in my car or to buy food from the store. So in turn, I now don’t have as much I did before to save and invest for my retirement.

We can’t point out a single root cause behind all the negative consequences of inflation, but we can point out one of things that caused it for sure: Governments printing more money and bigger centralized companies owning the storage and distribution networks of money.

The truth is that we are all part of a world where we willingly allow our money to be controlled by other organizations and other human individuals that command great influence.

For the most part in exchange for this social contract, we are able to live in peace, able to buy anything we want at a reasonable market price and be compensated for the value that we generate when we work.

However, the social contract also does not allow us to be in complete control of our wealth. As shown during the 2008 financial crisis, even a big bank that people had trusted their $400 billion worth of life-savings with collapsed because of the risky, greedy practices of a few human individuals. There is no guarantee that other powerful individuals would make the same mistake and jeopardize the financial livelihoods of thousands of people like us.

The problems of the current financial system can be summarized using 2 words: Centralization and Brokerage  


Account holders like you and I store our money in the bank which is operates under a corporate hierarchy that ultimate bestows the control of the bank’s funds into the hands of a few executives at the top. Physical money is also pooled together and stored in a bank vault in a centralized way. So are the digital transactions records of the account holders which are stored on the bank’s secure servers. The problem arising from centralization is that the bank is in charge. They have the power to do whatever they want with the money we have asked them to hold on without telling us. I don’t have a say in who my money should go to should a bank decide to loan my savings to somebody else. I don’t have a say in the fees that the bank may decide to charge me for their ‘maintenance’ purposes. The money that I leave in the bank is also technically NOT my money if I don’t physically withdraw it. Not that they do it on a regular basis, but a bank can step in and freeze my bank account if they deem it necessary and revoke my access to wealth. The bottom-line is is that a centralized company controls the money I ask them to hold onto.


The other problem is brokerage. The bank is somehow entitled to charge me a fee when I wish to make payments or send money to another account. It also can dictate the amount of time it will take for the money transfer to take place, despite however fast I want the transaction to complete. The other reason why bank transactions are slow is because of bureaucracy. As a result of the combination of an oligopoly system dominated by only a few large institutions and an ever growing no. of acts of fraud, the global banking system has evolved into one where there are too many middle entities that approve and broker transactions especially if they are international.

The centralization brokerage problem created by banks directly translate to loss in both value and control over one’s wealth.

Conclusion – The Case For Cryptocurrency

Bitcoin held in hand.Photo by Kanchanara / Unsplash

Throughout history, technology has impacted the human race in many unpredictable ways.

Some like machine guns or anthrax gas enabled the darker sides of the human race to commit horrible acts of violence and death.

Others like the internet, social media, and ecommerce democratized the world by giving anybody access to voice their opinion to the world, access to capital, and the power to make a living from the world as well no matter what their backgrounds were.

Today, there is another technology that may enable the next thing that needs democratizing – people’s access to their wealth.

This technology combines cryptography (encryption technology) and currency (a system of money) gives rise to a new, decentralized, paradigm for money that is digital, secure, and faster/cheaper in terms of transactions than ever before.

In case you did not get the hint, this technology is called Cryptocurrency.

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