As you read this, SwiftDemand store will probably be adding one more vendor to the existing list of people willing to exchange some physical goods or services for your swifts.
This is exciting, seeing that the platform offers you 100 Swifts daily as a user, but have you also ever wondered about the durability of digital currencies? for example, the possibility of the total value disappearing one day and leaving us all with thousands (or millions) of digital assets worth zero dollars? or for how long it will remain acceptable?. These are genuine concerns and this post was simply written to bare my thoughts on why digital currencies and government issued currencies are the same. The thought basically flashed in my mind after finding SwiftDemand a month ago (probably late).
So, are government issued fiat currencies any better than privately issued currencies? Let’s think about it, exchanging goods/services is probably one of the first think we did after we evolved into thinking humans, we had to figure out ways to exchange goods and services with one another using valuable mediums which at some point was gold and other (jointly agreed) precious metals. Fast forward to a few centuries later and the first currencies emerged, they were made from precious metals which represented value to the receivers. This gradually changed with the issue of gold backed paper currency since these promissory notes (fiat currencies) slowly lost their gold backing and today, there is a consensus that paper money is pure garbage and represents a value in gold that doesn’t exist in practical terms. This means our governments are simply printing paper and issuing it out as national currency.
- Consistency and continuity of Government; since the Government will always exist in a form or the other, people accept government issued currency as prove of value and will exchange their goods or services for the right amount.
- Trust in the Government: this also stems from the continuity and consistency of governance, people accept the government as authority and this same authority is transferred to the currency it issues.
- Must be divisible into units and have inherent value e.g precious metals are useful even when not used as currency. But then, a very hidden part of inherent value however is “agreed” or “consensus” value. This simply means there must be a wide agreement that the object is valuable to hold.
- Value however is derived from scarcity e.g, if Gold is unlimited and easily available, then it would be as cheap as sand.
HOW DOES THIS APPLY TO CRYPTOCURRENCY ?
AND, WHAT’S ALL THIS ABOUT? – SWIFTDEMAND AND IT’S STORE
I must say I am yet to order from the store but I hope to do it soon since I have collected about 3000 Swifts over 30 days. As it’s developers say ” SwiftDemand is currently a digital currency and will soon become a full cryptocurrency. In mid-2018 all Swifts on SwiftDemand will be transferred at a 1:1 ratio onto the new Swift blockchain. Swifts have no direct connection to any form of currency and are not backed by anything. Swifts are only worth what other people are willing to pay for them. There is no guarantee about the strength of Swifts in relation to any other currency.”