Systematic risk is coming - a trust issue.

The financial crisis in 1929 made the first central bank in the US collapse, and private bankers rescued the government.

The global financial recession in 2008 almost collapsed the private banks until the government recused them.

The slowly deteriorated of the banking system and central banks showed the crack of how the current financial system may not be as sustained as we believed.

The fiat currency ran on the trust system.

The original idea is to link with the concept of the social contract.

The social contract is between citizens and the nation, and they exchange legislative powers for equal treatment and freedom.

Similarly, the fiat system was constructed to let everyone exchange the legislative power on the financial system for equal ability to spend the fair fiat currency.

Therefore, even the fiat currency runs on the trust system, which does not mean that the money is worth zero if everyone does not trust the system. It only means you should trust the government as much as possible so that the currency in your hand is worth what it states. Otherwise, you can't do anything about it.

You only have two choices: belief or can't do anything about it.

Until the cryptocurrency, you have another option, to use cryptocurrency if you do not believe in fiat currency anymore.

Why is this so significant?

Since the government has represented you, you had no influence and to express your objections instead of reaching out to your representatives to help you influence the government. But do they care about your opinions or just your voting right?

Similarly, whether you trust the financial system or not, the fiat currency is still working, and the government still is making mistakes.

Cryptocurrency offers the hope that you can express your opinion and empower yourself without letting others represent you.

People will have no trust eventually if the government continues doing its own way and ignores the rest of the people. And they will continue making mistakes.

At least we still have cryptocurrencies.

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Photo by Joshua Hoehne

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