Bitcoin: The legacy of the 2008 financial crisis

To understand Bitcoin, rethink when and why it was invented. The 2008 financial crisis led to the largest recession in US history since the Great Depression of 1929-1933. Consequently, confidence in banks and governments fell to an all-time low. This drastic change in public opinion inspired three movements to challenge the age. These were the Tea Party and Occupy Wall, which left their mark on American politics. But the third and most important movement is Bitcoin.

What happened in 2008?

According to the US Department of Labor, 8.8 million people lost their jobs after the 2008 financial collapse. This was the period of greatest economic recession and the widest range since the 1930s. shocked the world.

Subprime lending led to a financial crisis in 2008. This is when banks lend money to people that they cannot afford to pay back. Accepting financial risks amplified short-term economic growth, but ultimately led to the collapse of the banking system and the government had to rescue.

In addition to financial hardship for millions of Americans, the Great Depression also brought about the widespread distrust of organizations, from banks to governments. A decade later, the terrifying effects of the financial crisis were reduced. However, the political, social and financial fluctuations that it inspired inspired a permanent change in the American context. This is also the main factor leading to unemployment, famine and finally World War II (1939-1945).

Financial incidents have given us two political movements

Two political movements, one free and conservative, came out of the financial crisis. The Tea Party, a form of populism and conservative Republicism, was born in 2009. First, they protested relief packages sponsored by President George Bush and later, Barack Obama. In 2010, Tea Party candidates won a record 60 seats in the House of Representatives.

Today, the Tea Party has given way to the Republican party. In other words, a Republican 2018 member could almost swap with a controversial Tea party candidate from a few years ago. More significantly, many speculate that Donald Trump became president due to the wave of populism launched by the Tea Party in 2009.

The second political movement stemming from the 2008 financial collapse was Occupy Wall Street. In 2011, protesters gathered at the New York financial center, to challenge inequality and rich political corruption. Although their political influence is thought to be less, the concepts introduced in Occupy Wall Street still prevail in today's political-economic discourse. For example, 99%, meaning that the richest 1% of Americans have 99% of social wealth.

Bitcoin escaped financial trouble in 2008

A month after the 2008 financial collapse, a mysterious person named Satoshi Nakamoto introduced Bitcoin to the world. Bitcoin arises from similar dissatisfaction with the status quo of both liberal and conservative political movements. However, unlike these campaigns, which had little effect on the role of large businesses, Bitcoin continued to threaten the authority of financial institutions that caused the 2008 recession.

It is no coincidence that the first modern currency that could not have a central authority appeared about a month after a financial collapse that the world blamed big banks for operating through government channels. corruption. Therefore, Bitcoin exists in opposition to design organizations. Operating on a decentralized ledger system, it does not need a central authority such as the US Federal Reserve (Fed), credit card companies or large banks. It depends on supply and demand, rather than government-controlled inflation to regulate Bitcoin.

The act of creating Bitcoin was a rebellion against the institutions of our time.

The influence of Bitcoin continues to grow

Today, the 2008 financial collapse and the fear of the organizations it inspires is a distant memory. Occupying Wall Street has given way to complacency accompanied by renewed financial security. The Tea Party has since become similar to the GOP, which has been criticizing education and gaining corporate support. The fact that these movements have been decentralized, meaning they have never had a clear leader or mission, is indisputable.

But Bitcoin just became a more powerful version of itself. The 2008 worth of every penny digital currency is currently the most valuable, worth over $ 6,000 per BTC. With the advent of secure crypto wallets and more widespread adoption, buying, lending, or storing Bitcoin has never been easier while stripping exorbitant transfer fees from credit card companies. and the bank.

In addition, blockchain technology invented with Bitcoin has more applications than ever before. One of the biggest potential applications for blockchain is voting, which they have tested in Korea, Switzerland, Austria ... Because blockchain doesn't exist in one place, it is almost impossible to hack.

Blockchain challenges big corporations?

As the last example illustrates, blockchain has great appeal for large companies, especially those that cause the financial crisis. Bank of America has paid $ 76 billion in fines for their role in the financial crisis, according to Market Watch. Today, Bank of America holds the most blockchain patents in the United States.

Goldman Sachs, who bet that people will default on their mortgages, is also joining the blockchain with cryptocurrency securities. Fidelity Investments is another huge financial services company that invests heavily in blockchain intellectual property.

The proliferation of major business blockchain applications, from cheap to luxury, raises the question: Is the technology still opposed to large corporations, or have Fortune 500 companies replaced blockchain technology?

Bitcoin: The legacy of the 2008 financial crisis

Blockchain led to the creation of more compact, creative lending companies than the financial giants that led to the collapse. In contrast, large corporations are trying to control and apply the technology behind it.

But Bitcoin and blockchain are not the same. Bitcoin and other cryptocurrencies like it have made it easier than ever to spend money outside banks and credit cards.

Although the Tea Party's influence may diminish with the election cycle, Bitcoin has a life of its own outside the political context. Although the world first understood Bitcoin as a rebellion against the status quo, Bitcoin is now an officially operational currency. It was never just a movement that could wax and weaken.

This is not to say that the symbol of Bitcoin has won back in importance. When the next recession comes, people will remember why we need Bitcoin in the first place.

And, we are facing the economic crisis in 2020, which is expected to be worse than 2008 by the corona virus.

If you want to know how Bitcoin will turn out in this crisis, read on later.

Cao Cao

According to AZCoin News

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