Trustless

by Matt Hrones

Trustless. The concept was brand new to the financial world when cryptocurrencies were first released. There had never been a system in which there was a hard currency that could be transacted between individuals. Every single money system on the planet was regulated by some central third party, and most everyone relied on either a bank or another payment processing company to handle their daily transactions. With the introduction of credit and debit cards, a handful of these major corporations were literally handling the world’s money, almost wherever it went.

We can look to our past to see what happens when the “too big to fail” mentality comes crashing down around the general public. The Great Depression is the obvious example, when most people’s life savings were wiped out. The government was forced to step in to maintain some order in the economy. It happened again in 2008, with banks all over the nation desperately needing bailouts otherwise their customers would all be completely out of luck. We all really don’t have control over our own finances. Almost all of our money is in custody of someone else. In the US, we have a very free economy. Other than some illegal things that are restricted, we can pretty much spend our money on whatever we want and transact freely. Elsewhere in the world however, people’s right to have control over their monetary status is threatened every day.

In Venezuela, it is illegal to purchase anything with any currency other than the bolivar, and it’s also illegal to convert bolivars into any other currency. A person’s entire net worth could be decimated because their currency just isn’t worth anything anymore. A sort of black market was created to trade US dollars for the worthless bolivars. Since you couldn’t go to the store and buy dinner for your family with USD, you’d trade your dollars on the black market for the currency you can use, but convert it back to USD so your money would retain some of its value while you just held it. People who just kept their money in bolivars lost out enormously.

This is a great example of a broken system. Many people don’t live in Venezuela or any other country going through such economic and political turmoil, so they don’t give it a second thought. They can simply go to their ATM and withdraw as much cash as they need. But what if it wasn’t that easy? Imagine living in one of these countries, where you couldn’t decide what to spend your money on and there was nothing you could but watch as your live savings turned into peanuts.

Cryptocurrencies have, for the first time, created a trustless system of finance. There is actually no one that can limit your ability to send or receive transactions through the network. The only thing you need to control your funds is to remember a twelve-word passphrase and have some sort of internet or telephone/SMS connection. Its this trustless system that has the potential to disrupt so many of the world’s industries and help millions and millions of people take control of their future once again.

Platforms such as Auctus aim to provide a solution to a world where everything you do requires some level of trust. Stories of pension funds drying up and massive bailouts being required stain the news constantly, giving some insight into the lives of some of the people whose entire rest of their lives are called into question because of a broken and corrupt financial system.