A decentralised economy, also known as horizontally-planned economy, is a system that delegates the power of financial decision making among different economic agents. A decentralised planning exists in contrast to the traditional centralised approach, where a central authority accumulates economic information with the objective to set specific production plans, allocate resources and create investment opportunities. In a decentralised economy, neither the central bank nor the government enjoys an absolute control over the implementation of monetary policies.
The Pillars of a Centralised Economy
- Interest rates are the key drivers (essential policy variables) for economic mobility.
- Market equilibrium and striking the balance between demand and supply can only be attained through ‘natural’ price movements.
- A centralised economy projects banks as mere financial intermediaries like any other non-banking financial institutions.
- Savings is essential for economies that are willing to prosper by funding necessary investments.
- Governments must encourage deregulation, liberalisation and privatisation, which would help market forces in delivering stable and scaling growth.
Why Do We Need A Decentralised Economy?
Fight Against Arbitrary Banking Rules and Legislation
The global economy is bearing a heavy burden of $152 trillion debt. Banks and governments are forced to collect the money from people by implementing arbitrary changes in their policies. These coerced implementations are making wealth preservation extremely difficult for people. The rise of bitcoin and other cryptocurrencies is the first major step towards a decentralised economy, where transactions are tax free and don’t require intervention from intermediaries to carry out these tasks. To make this future a reality, bitcoin trading platforms like Belfrics are working towards making bitcoins effortless to use and accessible to all with an easy to use interface.
A bitcoin debit card relieves users from depending on bank accounts and thereby marks the first step towards eliminating tradition fiat currencies.
Freedom from Inflation
A centralised government and banking system may use currency printing as an instrument to boost the supply of money in the market. With more money in their possession, people enjoy higher purchasing power, which eventually leads to the price hike of essential commodities and inflation. The limited availability of cryptocurrencies (such as, no more than 21 million bitcoins will be made available to users) helps in setting the balance right between demand and supply.
Absolute Control over Your Money
Supervision over your monetary transactions is not the only ill that a centralised banking system brings but also it imposes unwanted fees to get the job done on your behalf. Failing to adhere with these norms and regulations might lead to frizzing your account and funds. In a decentralised economy you are your own bank. Through peer-to-peer (P2P) decentralised technologies you are in absolute control of your money, without the risk of being monitored or controlled.
The existing social media platforms, through publicly voice their concerns over users’ primary, are mere instruments in the hands of their investors, who promote centralised baking and governance. These companies synchronize users’ data and put it use for the purpose of ensuring users’ benefit. In a decentralised economy, an increasing number of decentralised social media platforms would emerge. They would create a public blockchain that anyone will be able to access for the purpose of evaluating their personal information. Owing to this, it would be a lot more difficult for centralised banking systems and governance to extort the mass.
The centralised economy is a carefully structured ecosystem that constantly supervises individuals, all the way down to their behavioral levels and thereby enjoys an “unprecedented concentration of power.” Such saturation of power poses immense threat to fundamental rights and civil liberties of common people. A decentralised economy, on the other hand, allows every individual to be in control of their lives and monetary resources, so that they cannot be extorted through the myths, such as introducing more mobility in socio-economic set up, national economic prosperity and protection of basic human rights.