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The primary use case for cryptocurrency was to replace traditional fiat currency. Printed on Bitcoin’s genesis block was a message about how banks were bailed out after the stock market crash, a clear indication of the intent of this new technology. A similar post was repeated in 2020, although fewer people are aware of this later reference to money printing.
Although the use cases have expanded considerably, it still remains a central goal of cryptocurrencies and NFTs. It offers wealth generation mechanisms unmatched in the mainstream investment industry and has provided all classes of investors with a means to build lasting wealth. It also offers possibilities of microfinanceto bank the unbanked and to help those in emerging markets establish themselves financially.
All of this is happening outside of the controlled, centralized and inherited banking sector, which has often prevented the many from acquiring wealth and allowed the few to keep it.
The challenges of centralized banking
The problems contained in the traditional banking model are far too numerous to list in a single article. But it is obvious that it promotes the centralization of wealth and allows a few key individuals to hold not only financial power, but also significant political power. All this centralization of power can result in a devastating resolution like war. The banking system and the system of political governance are inexorably linked.
On an equally worrying note, banks are responsible for determining whether or not you get a mortgage and at what price. Even so, they are known to shift customers to higher rates to earn more profit while cheating their customers. They determine loans of all kinds. Accounts can be frozen for activities that violate their terms and conditions. Redlining is a policy where lenders identify minority groups that are more likely to default on loans and mortgages. Those of particular ethnic origins have worse rates, almost a form of institutional racism.
Fiat interest rates are now effectively negative when all fees are taken into account. If you pay $10 a month to store your money and earn $0.50 in interest, you’re still paying for the privilege of having an account (although it’s not marketed as negative interest). At one time, those who put money in a fiat bank account were rewarded, as is the case in all organic systems of economic investment such as cryptocurrency.
Opening an account is difficult and there are tons of red tape associated with all sorts of financial activities, which are intimately linked to the traditional banking sector. The charges and fees are extremely high compared to what is offered. Even if you get rich, it will be very slow and you will pay dearly for every dollar you earn.
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Create sustainable wealth with Web3 solutions
A number of innovative Web3 projects are providing mechanisms that can allow people to safely invest in cryptocurrencies and build sustainable wealth for the future, in a shorter time frame. Right now, although the crypto markets are growing year on year, most investing is done on guesswork. There is no reliable metric to assess what makes a piece or project with powerful long-term viability.
New projects like Challenge the trends offer a solution by assigning each coin a score based on a number of reliable metrics including social sentiment, on-chain data, off-chain data, and in-depth web analytics. It’s exactly what individuals and businesses need to build diversified portfolios of strong Web3 businesses and projects. It provides advanced traders and novice investors with a framework to objectively analyze the value of tokens.
This will contribute to long-term wealth creation and can also contribute to the preservation of currency. Tools like this perform due diligence so investors don’t get scammed, which is all too common in the crypto markets. The first lesson in preserving wealth is to learn how to keep it and then grow it safely. Traders and investors need help interpreting the crypto markets correctly to preserve and grow long-term wealth.
Other companies like Circle and CoinsPaid help existing businesses make a seamless transition to cryptocurrency in a cost-effective way. They offer businesses a quick way to integrate with cryptocurrency while preserving existing processes, so there is no business disruption. All customers receive a ready-to-use self-branded crypto payment processor within one month. It allows instant payment in over 30 cryptocurrencies and provides an integrated exchange for 20 fiat currencies. This is the power of blockchain at work.
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Vast Wealth Opportunities
Web3 companies like this are instrumental in the transition from traditional banking to modern cryptocurrency. Bureaucracy is avoided, efficiency is improved, transfers are fast and immutable, and cross-border payment is effortless when using distributed ledger technology.
But the benefits extend beyond that into completely new investment paradigms. The real estate market, currently saturated by a small number of wealthy elites, is reopening in a different way. There are VR-enhanced metaverses where you can buy your own “space” and sell NFTs through it. The music industry is also being redefined with concerts that can be attended virtually, with recording artists being paid in crypto.
The NFT market has already exploded, with a collection sold for $69 million, although these are only digital artworks. There are also multiple opportunities in decentralized finance such as yield farming and cross-chain liquid staking, invented by Anchor. These can be compared to financial derivatives in the crypto market. Any financial tool from the traditional banking industry can be easily integrated with a blockchain and streamlined for optimal results.
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Retain ownership of acquired wealth
The new Web3 investment model does more than reopen access to existing markets. It creates entirely new paradigms and new forms of wealth generation and preservation.
Perhaps the biggest benefit is that Web3 will allow you to preserve the wealth you have already built up. No one but you has access to your crypto wallet, unlike a bank account which you only have a “right” of access to.
In traditional banking, your currency will be gobbled up or effectively stolen by charges, fees, inflation, taxes, and the many other creative ways in which centralized finance takes what’s yours and confiscates it. This is what I call the poor man’s tax. The money we have to pay when we have no money. It does not mean anything. It doesn’t seem like society should be able to operate that way. But there is hope.
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