Despite centuries of civilization, the global economy has remained marred with inequalities. The 19th-century saying about the rich getting richer while the poor get poorer still holds even in modern times.
Thank you for reading this post, don't forget to subscribe!According to the Global Wealth Report 2024, nearly half of the world’s wealth is controlled by the world’s richest 1 percent – those with more than $1 million. At the other end of the spectrum, about 40 percent of the world’s population holds less than 1 percent of the world’s wealth. Taking it a notch further, as of 2022, nearly 80 percent of the global wealth was in the hands of just 10 percent of the population, according to the World Inequality Report.
The bottom line is that although inequality is a known problem, it is evident that traditional methods have done little to solve it. And this is where blockchain technology appears to be useful.
Blockchain: A Knight Betrayed by Its Own Promises
The issue of global income inequality is multifaceted, fuelled by drivers such as tax policies, globalisation, gender bias, and low minimum wages, among others. Although early proponents of cryptocurrencies argued that blockchain, and by extension cryptos, was going to solve this problem, data suggests otherwise.
Here’s a little backstory. I have been an active participant in the crypto space since 2016. I have lived through multiple narratives, bull runs, crypto winters, and frenzies – think ICOs, airdrops, DeFi, NFTs, metaverse, DAOs, and now DePIN.
In the early days, financial institutions were generally fingered as one of the major causes of financial inequality, with a promise of massive disruption. But permit me to argue that many cryptocurrencies quickly became knights betrayed by their own promises. The narrative hasn’t really changed over a decade later.
While cryptocurrencies aim to decentralise finance, the concentration of wealth within the crypto ecosystem often parallels the unequal distribution seen in traditional economies. For instance, Bitinfocharts shows a highly concentrated wealth distribution in Bitcoin, with 0.5% of addresses holding over 85% of BTC. However, the situation is more nuanced since the data fails to account for multisig wallets and exchange holdings. Nevertheless, it is an open secret that the “wealthy” rule in crypto circles. This is particularly true in DAO settings where those with a sufficient number of tokens and voting power easily sway governance decisions in their favour.
A Second Chance for Blockchain: New Projects, New Promises
Amazon, eBay, Google, and several others, emerged from the dot com burst. Similarly, I strongly believe that many successful projects will emerge from the crypto industry. We are already witnessing disruptive change that cuts across a plethora of industries and spheres, and global inequality won’t be an exception.
That said, the remaining parts of this article briefly highlight DECENOMY’s approach to equitable money distribution. The nascent blockchain project is making a bold stand to build a future characterised by fairness, inclusivity, and interconnectedness.
The blockchain’s approach is inspired by Milton Friedman’s monetarism. Friedman, a renowned economist, advocated for monetarism, which emphasises the primary role of money supply in determining economic activity and prices. DECENOMY’s Dynamic Rewards System aligns with this theory by focusing on the regulation of token supply and its impact on the ecosystem.
From fixed emission rates to Dynamic UTXO analysis, staking power calculation, and a damping function, the Rewards System promotes equitable money distribution through predictability and active participation.
There are other interesting parts of the project such as its Dynamic collateral feature and multimode script for masternode operators.
In conclusion, rather than view blockchain as a rapid disruptive force, I am beginning to appreciate its potential to reshape key aspects of the global economy slowly. Just like automobiles, which have gone from horse-drawn carriages to self-driving electric vehicles, DECENOMY and several other blockchain projects will pioneer truly decentralised societies.
