What if you can create the money, not the government? But how and what are the advantages?

Remember Federal Reserve used to keep gold as collateral to create USD. What if you can keep your gold (or any asset) as collateral to create currency? Just like you do at the time of taking the loan. You deposit your asset and get the loan from the bank in the normal currency but this time there’s no bank and you’ll create $ out of thin air. What if I say you can do this at the end of this article?

credits — here

What? When? How? Why? I can see many questions popping in your head. Let’s dive in. Let’s start with the question of “how”.

How will anyone be able to create $ without the involvement of Federal Reserve itself?

Beware: The further content would be bit complex. I’ll try to be as simple as possible but I think creating money should not be simple. Right?! 😜

Heard of blockchain? Nope? Then, Bitcoin? Nope? Then I’ll prefer getting basic knowledge about blockchain by basic google search and by reading this article.

The blockchain is the underlying technology of bitcoin. Bitcoin is a small use case of the blockchain, to be precise it’s “👌” much. Blockchain has many use case just like the internet. We’ll get more into ethereum blockchain. So let’s get back into solving our main problem of “how to create $”.

Do you know you can buy gold on Ethereum Blockchain? Yeah! Real gold, check out — Digix (DGX).

But, in this article, we’ll focus on ETH (Ethereum) as asset/collateral to deposit and to create $(DAI). Now, what’s special on ethereum blockchain. Anyone can create the smart contract, it’s a piece of code which is deployed on the blockchain, so it’s immutable and will do exactly as it says. Imagine a smart contract, which does all the things I mentioned above, from depositing ETH to get the loan in a stable coin which is equivalent to $1 and the loan you’ll get will be newly made coins, they will get minted out of thin air and when you pay the loan it burned out of existence. This will give everyone the power to take a loan by depositing their asset without the need of a bank, creating currencies without the need of government and enabling the whole new era of giving the power of government (centralized organization) to every person globally.

credits — here

I’ve not gone into too many technical details assuming many of the readers are a noob to blockchain but curious people can always check — MakerDAO.

When would we possibly be able to do this (create currency)?

What if I say now? I minted around $715(DAI) by locking 12 ETH as collateral on InstaDApp, myself. Now, I’ve spent all the $715 and I’ve no idea who has my money and now whenever I want my collateral back I just have to pay my debt with the interest that’s all no government, no banks. Anyone with the ETH can create DAI without any permission.