This series of articles aims to explain how Ethereum has the potential to become the new oil. However, in order to do so, for people to understand the concept that underlies and supports this idea, it is necessary to go through certain stages, and consequently through history as well. I believe that this series will be divided into four parts. It could be done in one, but the text would be so long, that in my point of view, it would not be so attractive to you readers, as it could become quite tiring reading. Therefore, I will try to launch these articles and complete this series as quickly as possible
For a brief explanation, the first part of this series talks about the history of gold as currency, and how gold migrated to paper money. The second part, aimed at the birth of the Internet and Bitcoin and how it evolved and paved the way for new technologies like the creation of Ethereum. In the third part, we will go back a little bit in time, to understand the beginning of the oil industry and its participation as a driving force in human development in the last century, as well as the history of oil barons, or as I like to call them, " OILgarchs ". And finally, in the last part, with our structured base, we will discuss why and how Ethereum has the capacity to become the new oil, as well as to become the driving force that helps our civilization to develop in this century in which we are living.
I hope you will forgive me for this division, but I hope you like the content.
Part 1 - "IN PAPER WE TRUST"
For a long time gold was considered the most precious asset on planet Earth, and even today, by many, it is still considered to be. For centuries, if not for millennia, Gold was the currency, it was the material used to move the economy, and it was through it that humanity developed economically. For a long time, gold was the base, the structure that takes empires to glory, and men to war. Gold was life, but gold was also death. Time passed, societies changed, and the policies and the men who governed them too. Empires fell, monarchs were beheaded, and republics were born. Revolutions that would give power to the people, dismembering the power controlled by the Church and the Aristocratic elite, finally, leaving the power in the hands of the people... which on a false pretense of freedom, failed. What was supposed to be the inversion of the pyramid did not happen, the top may have changed, but the base was still the same.
(The French Revolution)
The fall of empires, which gave birth to governments, brought a new form of slavery to that so-called ordinary citizen, because in the meantime, banks were born. Private bank.. There are two types of people that I hate, politicians and bankers, in my opinion, both should be hanged in a public square. Strangely, it seems that both of them were born together, and worse, they started a relationship ... a long-term relationship. Anyway...
Gold became a problem, and as a solution, they transformed it into paper, notes and more notes that represent and had their intrinsic value to that precious metal ...A brilliant plan. So great, that people started to stop carrying and making exchanges with gold, and started using banknotes. Faith is motivated by trust, and the creed of value in the paper note has spread around the world and taken root ... and has become so ingrained, that it survives to this day, through the sheeps that screams "IN PAPER WE TRUST ". The ease of a dream, which would soon become a nightmare.
First were the banks with the genius of a subtle idea, a fractional reserve. Most people deposited their gold in the bank and removed the notes that were worth their guarantee of return, however few were those who claimed this guarantee and took the gold back. The banks realized that, and finally, there were more banknotes out there than gold inside there. When people found out it was a scandal. Suddenly people ran to the banks to claim their gold back. But there were too many notes for little gold. Banks went bankrupt and people lost everything. In the midst of despair, people lost confidence in the notes, their faith had vanished. Disgusted, people asked for a solution, and their cries were heard by the governments, who came with the medicine, a very bitter medicine by the way ... Central Banks. The treatment worked, confidence was restored and so was the faith.
(The Panic of 1907 - The big run to the banks)
From that moment on, the government would carry the obligation and the duty to protect its population against the harmful practices of banks. What at first seemed to be an effective treatment, would fall apart, because in the end and over time, governments did what they did not want banks to do, print more notes than the gold available. But the government, learned from the mistakes of the banks, and ended the backing of the note with gold. After all, the idea of ??"IN PAPER WE TRUST" was once again rooted in people's minds.
With time, and with the blessing of the governments, the private banks returned to function (in fact they never stopped, since they were the ones who built and in fact were the owners of the central banks), and the relationship between the two was fully consummated. With this consummation, it was no longer only the Central Banks that could create money from nothing, now Private Banks had that power too. The Fractional Reserve idea was not only brought back to life, but it was being expanded ... and it was being expanded with full steam.
(Painting depicting the Federal Reserve Act signed into Law in 1913 by Pres. Woodrow Wilson and Bankers Moguls)
Over time, few people start to realized that their money was losing purchasing power, that goods and services were becoming more expensive, thus discovering the power of inflation and the consequence of printing paper without ballast in any asset. And to protect themselves from this possible lack of control, or economic and mainly political and governmental instabilities, they turned their eyes to the old and safe asset in which humanity had long relied on .... the good old Gold.
(The banking Fractional Reserve Cycle Explained)
Gold has always been a defense mechanism against government action, in its incessant practice of monetary policies, especially when it comes to printing fiat currency, and the consequences that this brings, such as inflation and consequently the devaluation of the currency, or the loss. of their purchasing power. But gold still had the same problem that it had centuries ago, it is difficult to transport and worse, in a world that embraced the idea of "IN PAPER WE TRUST", it was almost, if not impossible, perhaps forbidden, to made a trade using gold. With technological advances, several possibilities arose, money was being created less and less in notes, and more in numbers on the computer. But gold was still there, to defend and protect in times of need, despite the same problems of the past ... But that was about to change. A new option was about to emerge. A new, decentralized asset that revolved around a deflationary rather than an inflationary model. An asset created for the new century, which applies to new generations created in a digital world ...the Bitcoin.
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