Find out the three ways in which contributor and educator Kristina Demek sees cryptocurrencies contributing to a Sacred Economy via decentralization. She also helps define and demystify the world of crypto for our New Earth audience--and shares how a pig farm in the Philipines is embracing it!
Hopefully, by now, it should be clear that your money in a centralized institution (e.g., a bank) is not your money (yes, deposits are insured up to $250,000 per depositor, per insured bank but your money is not actually on hand at the bank). If 2008 didn’t teach people that, then maybe the current (and likelyto come) rash of bank failures will. Did you know that banks are not required to keep your cash on hand? In fact, in March 2020 (wink wink) the Federal Reserve Board reduced banking reserve requirements to zero, which means that banks are not required to hold depositor money in the bank (and prior to that, they were only required to hold 10%). If you still don’t believe your money is not your money, try to withdraw a good portion of it from whatever financial institution it resides in. You will find out; this is not such an easy exercise (I’ve done it).
While all the fuss going on the financial industry is to usher in CBDCs (centralized bank digital currencies), there is a silver lining…decentralization.
I have been participating in the crypto space for two years and the concept of decentralization is what attracted me to the space. I also believe decentralization is what makes crypto a viable asset in a sacred economy (decentralization, in general, is a concept that will become more pervasive in all areas of life as people start to yearn for a greater sense of freedom; e.g., homeschooling, self-healing, homesteading are allforms of decentralization).
Before I touch on some of the opportunities with decentralized digital assets, a little background…
What is cryptocurrency?
Simply put, cryptocurrencies are digital currencies. The first cryptocurrency was Bitcoin, which was founded by Satoshi Nakamoto in 2008.
While you own nothing tangible with cryptocurrencies, you do own an encryption key that provides access to your funds that you can exchange with other parties. If you own cryptocurrencies, you can store them in one of three types of digital wallets that vary in their level of security. Cryptocurrencies can be purchased through a broker or on cryptocurrency exchanges and can be purchased with fiat currencies (e.g., the dollar). The value of most cryptocurrencies is driven by supply and demand, which can create more volatility.
Currently, cryptocurrencies do not have a central issuing agency and are not regulated (although, I’m sure we will see much more regulation soon).
What is a blockchain?
Cryptocurrencies are built on and run on the blockchain and rely on a peer-to-peer system of validation. Blockchains are digital ledgers, which means they function as both a currency and a virtual accounting system.
Cryptocurrencies exist on a blockchain but a blockchain is not a cryptocurrency.
What are centralized and decentralized exchanges?
The primary difference between a centralized and decentralized exchange relates to who holds custody of your funds. In a centralized exchange (or CEX) your funds are held and controlled by the exchange (the equivalent to how banks operate).
In a decentralized exchange (or DEX) you have complete access and control of your funds, and your funds are anonymized.
As it relates to this article, I will share three ways in which I see cryptocurrencies contributing to a sacred economy via decentralization.
The first is through a DAO.
A DAO is a decentralized autonomous organization. A DAO could be good for any community type organization that seeks shared responsibility, transparency, engagement, etc. For example, I could see a DAO being used for an animal shelter. Where all employees, volunteers, donors are participants in the DAO. All voting and decision-making for initiatives within the shelter would be done at a community level and there would be full transparency of funds utilized within the DAO.
The second is through passive income.
Within the crypto space, one can engage in several types of yield farming that allows one to lend or borrow crypto on a decentralized platform and earn crypto in return. This ability to lend, borrow, and earn a return can mean that a person can “become their own bank.” For example, it is possible for me to lend my cryptocurrency to a platform and earn a return. In the meantime, I can also borrow against what I loaned and use that crypto to make a purchase. Then I can pay myself back through earnings on the crypto I loaned or other earnings.
For example, a small business can use yield farming to make a purchase for their business without having to go to a bank for a loan; therefore, taking control of the types of conditions/obligations around their “loan.” There are obvious risks within this process, and one will need to learn how to engage in yield farming, but there are also endless possibilities.
The third is through NFTs (non-fungible tokens). A fellow trader/friend is currently living between the U.S. and the Philippines, where he co-owns a pig farm.
I asked him to share his story…
“I always wanted to use crypto as a way to make a difference in the Philippines but never really knew how. One day, as we were discussing plans to grow our pig farm, I thought why not create a NFT project where people can buy our pigs? We designed the project to have minimal risk, but benefit everyone. We get to focus on expanding our farm while NFT holders help us buy pigs. Then, everyone gets to share in the profits generated from the sale of the pigs. The owners of the farm were very welcoming to the idea of NFTs and allowing crypto investors to buy the pigs. They understood that this meant the farm could grow faster; therefore, generating more profits for their family. This idea has the potential to not just benefit pig farms, but anyone who is looking to raise capital for their projects.”
As it relates to the pig farm, the NFT is a digital representation of an actual pig and each NFT is unique, just as each pig is unique. I chose to engage with this project and bought two NFTs for $100. Thus, I have two NFTs that are digital representations of the actual pigs I purchased for the farm. I named my pigs Sol and Luna. The money I spent to purchase my NFTs goes to purchasing and raising the pigs. They will eventually be sold within the community, and I will receive a portion of the profits from the sales (expected to be about 15% within six months), which I can then turn around and re-invest in the farm.
Even though Bitcoin is 14 years old, we are still at the beginning of the cryptocurrency evolution. It has been fun for me to be engaged in this space over the last two years and to see it grow, evolve, and expand. I will be able to say I was part of crypto when it was the wild, wild, west.
I would not, however, be a true Aquarius (i.e., a visionary humanitarian in the digital age) with strong Plutonian influence (i.e., the shadow side), if I did not add a word of caution. There are many benefits to crypto, digital assets, and blockchain, in general. There are also downsides – think social credit scores, restrictions on freedom, unethical actors, fraud schemes, etc. Now, more than ever, it will be important for people to consider their values, their money blocks and money mindset, and their personal financial and life goals. Discernment and self-mastery will be key in managing one’s assets in crypto. Discernment in choosing projects that are legitimate, discernment in investing in projects that align with one’s values, and self-mastery in managing volatility in the markets, especially when FOMO (fear of missing out) kicks in.
Kristina Demek is passionate about empowering others through education and personal development. Kristina is a Transformational Wellness & Life Coach. Her mission is to assist individuals in harmonizing their physical, energetic, mental, intuitive and spiritual bodies for resiliency and vitality. Kristina also serves as the Director of Education for Avalon DAO, a crypto education platform, and works in higher education. She can be reached via email at [email protected] and on Instagram @kristina.demek.
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