Translated by: Blockchain in Plain Language

Cryptocurrencies are attracting widespread attention globally. El Salvador has made it legal tender, requiring merchants to accept it like cash; meanwhile, the blockchain summit in the United States has drawn billions of dollars of companies rushing into the Web3 domain.

Behind this trend, cryptocurrencies like Bitcoin and Ethereum are far more significant than money itself, they are redefining how money operates.

However, complex terminology and overwhelming information leave many confused, as if everyone assumes you already understand. In fact, many are still struggling to comprehend the true value and meaning behind cryptocurrencies.

01
So, what is decentralized money?

Imagine if Venmo, PayPal, and your bank disappeared overnight, how would you transfer money?

This is a reality for millions of people worldwide.

But the issue is not just about accessing banking services (though that is a big problem). It's about who controls the money itself.

Currently, when you transfer money, you're not really transferring it yourself. You're requesting a bank or payment processor to do it for you. They are intermediaries who charge multiple fees, decide who can or cannot use their system, and have the right to freeze or block transactions at any time.

Decentralized money eliminates all of this. Simply put, you can transfer directly to others through a digital wallet without going through multiple banks. A blockchain composed of a global computer network verifies and records transactions through cryptography and code.

No company, no country, no CEO can intervene to stop it.

Unlike banks, decentralized currencies like Bitcoin, Ethereum, and others operate 24/7. No business hours. No waiting for "processing time". Banks don't close on weekends.

This is not just about speed, but about control.

02
Why is decentralized money important?

For the first time in history, people can send, store, and control their own funds without bank or government approval. If you live in a country with a stable banking system, this might seem unremarkable. But for millions, decentralized money equals survival.

1. No one can freeze or stop your funds

Countries and banks can (and do) freeze accounts when they see fit.

Take Canada in 2022 as an example. During truck driver protests, the country froze bank accounts of protesters and donors without a court order. Or in Nigeria in 2020, the state shut down bank accounts of activists supporting the #EndSARS movement (protesting police violence).

In both cases, the state believed this was necessary. But at what cost? When you take away a person's money, you deprive them of the ability to eat, pay rent, and survive.

With Bitcoin and decentralized money, this cannot happen. If your assets are in a self-custodial wallet or traded through a decentralized exchange (DEX), no bank, country, or company can freeze, stop, or confiscate them. This is suddenly not just financial freedom, but a basic human right.

2. Serving the unbanked

Now consider this: 1.4 billion people worldwide have no bank account. Not because they don't want one, but because they live in places without financial infrastructure, lack appropriate documentation, or are restricted by their country.

In El Salvador, before Bitcoin was adopted as legal tender, over 70% of the population was unbanked. Now, people can send, receive, and save funds without a bank.

For billions, decentralized money is not just an alternative, but the only viable option.

And, beyond basic banking services, DeFi is becoming a powerful alternative to traditional financial services.

3. Potential protection against inflation

Even if you can use banking services, inflation erodes your savings. Inflation means your money buys less over time.

Traditional currencies are controlled by countries, and when they print more money, its value decreases. This is exactly what happened in Venezuela, Zimbabwe, and Lebanon, where inflation destroyed people's savings.

Bitcoin's supply is fixed at 21 million. No country can print more, and no central bank can arbitrarily change the rules. That's why some call it "digital gold".

In the short term, prices fluctuate quickly. But in the long run, some believe that due to its fixed supply, it will become a strong store of value.

Bitcoin is not yet a perfect anti-inflation tool. But it is an alternative currency not controlled by any state. For many, that's enough to pay attention to it.

03
Decentralized money changes everything

Bitcoin and decentralized money are far more than just Bitcoin and decentralized money. For some, they provide cheaper and faster transfer methods; for others, they are potential anti-inflation tools; and for millions worldwide, they are the only way to access financial services.

Cryptocurrencies and the technology behind them are not perfect and do indeed carry risks, but they are pushing us to rethink how money operates. This is the first time in human history that people can access a financial system not controlled by banks or states.

Regardless of our attitude towards it, decentralized money is already shaping the future.

Article link: https://www.hellobtc.com/kp/du/03/5722.html

Source: https://medium.com/thecapital/3-reasons-why-decentralized-money