Live through the years, if you live enough you may know that price of almost everything around you has increased in prices. Why that happen, by the other look, you may know the truth is that not exactly like that. It is because of devaluation of fiat currency aka inflation.

1. Story about the collapse of the economic

1.1. Bankrupt

In years 2007-2008, property prices have increased to the all time high, then crashing down suddenly. It make some opportunity to buy a house may be cheaper than to rent one. In that period of time, many banks and people lost their money when investing property. And that’s not a small number, bankrupt happen first at there, then business lost their money from that too and many of that not enough money left to keep the business running so they has to be bankrupt. Because all of that, many people lost their work, money becomes scarce make them spend less. Therefore, the economy cannot develop or in other words, an economic recession.

Because all of those reason, the government has issued a policy called quantitative easing. It mean many money suddenly printed and drop into economic, firstly it make banks and businesses have more money to operate and people has money from work to spend it again. But after all, it make total money greater than before but other asset still equal. So the money lost it price and inflation occurs.

1.2. Fiat money problem

Before 1971, US dollar is gold standard. It mean that the price itself changes depending on the price of gold. At that time, medium range of salary workers is increase time by time because totals value rise, so their life is better by time. Under the incumbent President Richard Nixon in 1971, he announced a fiat money policy and eliminated the gold standard.

That policy mean now central banks or SEC can print any amount of money without have enough gold to protect it price. From that time to now, a huge amount of money was print make US dollar price down. Over time with one dollar, the amount of redemption value will decrease and you will buy less items because of that. Fortunately, thanks to the development of science and technology, life is getting easier and easier with a small amount of money.

2. A wild Blockchain is appear

2.1. First generation: store value

Around the end of 2008, an anonymous person calling himself Satoshi Nakamoto was present a thing called Bitcoin. It is the first Cryptocurrency in the world and it was backed by some special infrastructure called Blockchain. Blockchain is a technology created by combine 3 main another technology: Cryptography, p2p network and game theory.

2.2. Second generation: Smart contract

In the life we have some kind of information can be public, it hardly to be change and if it changed, it need to be record change condition, date time to change somewhere. When you think about that, a traditional database like Oracle, MySQL, MongoDB, … might be a good choice but it’s still not be really good solution when it come to trust issues.

In 2012, a youth developer named Vitalik Buterin propose an idea is that kind of information can be store in Bitcoin. Most of Bitcoin community at that time not accept that idea, so he need to find other solution to replace it. In 2015, he again propose that idea but in other Blockchain network called Ethereum that he is a Co-founder of it.

In order to write custom data to network, user and developer need to follow a rule that written by code named Smart contract. And smart contract code was compile to byte code and store directly in Ethereum network.

2.3. Third generation: Scaling

Day by day, business is bigger and Ethereum’s prices too. So many people have tried to find some solution to have a better Blockchain for their business like faster network, a lower prices, bigger data store, …

And Proof of Work too, when you come to Bitcoin and Ethereum, problem is how it cost energy to be decentralize. So many other consensus solutions have been implemented like Proof of Stake, Delegrated Proof of Stake, Byzantine Fault Tolerance, …

3. The future of innovation

At the present, we have so many solution is applied in to the Blockchain like: Defi, Gamefi, decentralized autonomous organization (DAO), … And in the future, it will combine to many others industry in Metaverse and others that we still don’t know about that.

So what do you think?