Behind the development of cryptocurrencies was the fact that people wanted to have more control over their hard-earned money. As it stands, the current situation couldn’t be any worse. And, governments and financial institutions are able use taxpayer money however they feel necessary and in the event of economic collapse, they can use this money to bail them out from their problems. Furthermore, this is exactly what happened during the US recession back in 2008, when the financial sector had to be bailed out by the Bush administration.
Government Bail Outs
By the end of 2007, most US banks were on the verge of filing bankruptcy. To resolve the situation, the Bush administration bailed them out by handing out money and loans that came directly from the pockets of taxpayers.
Nearly $800 billion US dollars were handed over to these financial institutions and a staggering $2.2 trillion dollar were passed out in the form of government loans. This situation combined with other economic factors were the inciting force behind protests such as the Occupy Wall Street movement.
And, this has not just been the case in the US. In the past, governments have always bailed out financial institutions that have been on the verge of bankruptcy. While this would be a good thing if the recipients of the bail-outs were companies that belong to the manufacturing industry, however, when a financial institution is bailed out, it’s almost always to protect and save people who already have deeper pockets than most of the population.
Bad Financial Habits
Many economic experts believe that these types of bail-outs are setting an affair precedent for financial institutions as it encourages them to take bigger risks to increase their profitability, while putting massive amounts of public capital in peril. This is true because most banks and financial institutions are connected in some ways to governments and they know that in the event of a loss, the money could simply be recovered from taxpayer money.
With problems such as these running rampant in our economic world, it’s no wonder that people are looking to alternatives to take control over their own wealth. However, it’s very difficult to stop big banks and governments from playing with taxpayer money.
The Ultimate Solution
One of the only solution to this economic problem is to create a completely independent financial system, where individual have complete control over their own money. Bitcoin and blockchain technology represents this exact solution since blockchain networks are completely decentralized from governments and banks, which allow you to make the decisions over how you spend your hard-earned cash.