We are currently at a crossroads in human history. In 1517, when Martin Luther nailed his 95 Theses criticizing the Catholic Church for the immoral practice of selling indulgences to the door of the Schlosskirche church in Wittenberg, Germany, it set off a series of events that later became known as the Protestant Reformation. This moment can be characterized as the beginning of the modern concept of separation of church and state. The 2008 financial crisis showed the world just how dirty the banking industry was. When the credit default swap market on subprime loans collapsed, it led to hundreds of thousands of foreclosures on homes in the US leaving millions of Americans homeless.

https://money.cnn.com/2009/01/15/real_estate/millions_in_foreclosure/ #:~:text=There%20were%20more%20than%203.1,received%20a%20notic e%20last%20year

In the end, only a small portion of those responsible for the financial meltdown of 2008 were held responsible for their actions. It was from this environment, Satoshi Nakamoto “nailed his 95 theses to the door of the church” when he published the Bitcoin white paper, outlining a decentralized peer-to-peer payment system. What has made Bitcoin successful thus far is that it checks off all the necessary traits for a currency to be successful. Bitcoin is fungible, portable, durable, highly divisible, secure, and scarce. What Bitcoin provides that regular fiat currencies do not is that it is sovereign i.e. it is not connected to a government, and it is decentralized, meaning it is not governed by a small group of people. Bitcoin proved that immutable open ledger blockchain-based currencies will be the way of the future. Although, a momentous achievement, Bitcoin is merely a working proof of concept, not a replacement for all fiat currency or banks for that matter. Transaction speeds on the Bitcoin blockchain are slow, and commission fees are dependent on the volume of transactions. Although useful as a store of value, Bitcoin is not a threat to central or private banks as it does not directly compete with the services that these banks provide. The creator of Bitcoin never could have imagined that their creation’s market cap would be valued one day at over $1 trillion, or use approximately 0.6% of global electricity consumption. It is important to note that Bitcoin is not as decentralized as many would like to think. More than 65% of the blockchain’s hash rate comes from inside of China.

https://finance.yahoo.com/news/bitcoin-mining-pool-hashratesplummet-110000621.html#:~:text=Reports%20state%20that%2C%20as%2 0of,reportedly%20between%2020%20and%2036%25

However, what the Ethereum blockchain provides that both fiat currencies and Bitcoin do not, is the fact that it is programmable, meaning it allows for smart contracts. Additionally, when the Ethereum blockchain transitions to a proof of stake consensus protocol from the current proof of work protocol, this will have an effect on lowering gas fees (fees for validating a transaction or executing a smart contract) as well as lowering the massive carbon footprint associated with a proof of work consensus protocol. Read more about the differences in Proof of Work vs Proof of Stake consensus models here:

https://www.investopedia.com/terms/p/proofstake-pos.asp#:~:text=Proof%20of%20Work%20(POW) %20requires,coins%20held%20by%20a%20miner

Ethereum occupies a slightly different niche than Bitcoin. Unlike Bitcoin, the Ethereum blockchain provides utility to individuals that is in direct competition with the services that traditional banks provide. Solidity, the programming language that runs on the Ethereum blockchain is Turing complete and allows for smart contracts to run on the blockchain. Smart contracts are essentially chunks of code that are self-executing, can be programmed to do different tasks, and run on the blockchain. These smart contracts are what make decentralized finance possible. Read more about smart contracts here:

https://www.investopedia.com/ terms/s/smart-contracts.asp

Smart contracts are what enable individuals to earn interest on deposits or to borrow currency from liquidity pools, swap tokens on decentralized exchanges, participate in open and blind auctions, and vote on various proposals. This is what gives the Ethereum blockchain the potential to displace banks or any centralized entity that facilitates transactions. It is the ability to deploy smart contracts on Ethereum that make it superior to Bitcoin in terms of utility. If Bitcoin is to blockchain technology what dial-up was for the internet, then Ethereum is akin to underwater fiber optic cables that allow people to communicate over video without latency anywhere in the world. Smart contracts are what give Ethereum the ability to replace all central banks, private banks, exchange platforms, and brokers. This is not even speculative as it is already happening. Decentralized Finance (DeFi) Liquidity pools commonly referred to as DeFi protocols, such as Aave (AAVE) and Compound (COMP), give users the ability to stake cryptocurrency to earn interest or take out a loan on a cryptocurrency. As of May 3rd, 2021, Compound and Aave provide $16B and $10B in liquidity respectively. Both liquidity protocols run on the Ethereum blockchain. You can check out their open-source code here:

https://github.com/compound-finance/compound-protocol https://github.com/aave/aave-protocol

Decentralized Exchanges (DEX) such as UniSwap (Ethereum), Sushi Swap (Ethereum), or Pancake Swap (Binance Smart Chain), give users the ability to swap cryptocurrency tokens. As of May 3, 2021, Uniswap, Sushi Swap, and PancakeSwap, provide $8B, $5B, and $2.8B in liquidity on their exchanges respectively.

https://info.uniswap.org/home https://analytics.sushi.com/ https://pancakeswap.info/home

Unlike a traditional cryptocurrency exchange like Coinbase or Binance for example, it is important to note that these decentralized exchanges obtain their liquidity from individuals who stake currency pairs to earn a percentage of fees generated from transactions processed on the exchange. Smart contracts on the Ethereum blockchain can cut out the need for companies to serve as the middle man between transactions. Companies like eBay, Uber, and Airbnb will all eventually be replaced by smart contract protocols that run on a blockchain. What can private banks do to not become relics of the past? In the short to medium term, private banks must incorporate blockchain technology into their business models to stay competitive. Private banks can use blockchain technology to aid in processing internal transactions and making sure internal records are not tampered with. Although traditionally slower than the current mainframe computer systems banks use to keep records, banks could tailor their own internal blockchains by increasing block confirmation times to make transaction speeds comparable to mainframe systems. This would create an added layer of redundancy of record keeping. Banks could store account balance data and internal records on their internal private blockchains. This would reduce the risk of tampering data and human error as well as add an increased layer of security. However in the long term, as people become more comfortable and familiarized with blockchain technology, traditional private banks will find it difficult to compete with decentralized blockchain technologies. Banks are burdened by complex regulation, KYC laws, and ultimately will not be able to provide the same lending or interest rates that DeFi protocols can. The outlook for central banks is a more dire one. Whereas private banks at least provide some utility to individuals by providing them with loans and facilitating transactions in fiat currency, while it is up for debate, the central banks of most countries have a net negative effect on their countries and the fiat currencies they control. Central banks exacerbate income inequality between social classes. Individuals who hold tangible assets such as real estate, land, precious metals, stocks, or bonds maintain approximately the same level of purchasing power in an inflationary economy since their assets’ valuation keeps pace with inflation. Owning tangible assets during an inflationary period is akin to being in a boat as the tide is rising. However, the purchasing power of individuals who do not own tangible decreases as their income will not keep up with the rate of inflation. Those who do not own appreciating assets in an inflationary period drown. This is the harsh reality of a system where a group of six people have the power to make monetary policy decisions that affect the lives of billions of people.

https://en.wikipedia.org/wiki/Federal_Reserve_Board_of_Governors

We are beginning to seeing the disastrous effects of hyperinflation caused by quantitative easing, excessive government spending, and stimulus check printing. One of the reasons why the S&P500 is at an all-time high is because investors are hedging potential loss by not keeping their wealth in fiat currency. Essentially, the current market consensus is that cash is trash.

https://www.wsj.com/articles/americans-cant-get-enough-of-the-stockmarket-11619947800

In the 1930s, Weimar Germany printed the Reichsmark to insignificance in order to pay off the massive debt of war reparations set forth by the Treaty of Versailles. By printing their way out of their debt, they essentially defaulted on their debt. Guess who had to pay the price for hyperinflation? The citizens of Germany with their decreased purchasing power and lower standard of living. Currently, the debt to GDP ratio of the US and Eurozone is 130 and 98 percent respectively.

https://fred.stlouisfed.org/series/GFDEGDQ188S

https://ec.europa.eu/eurostat/documents/portlet_file_entry/ 2995521/2-21012021-AP-EN.pdf/a3748b22-e96e-7f62-ba05-11c7192e32f3

The fundamental problem with banks is that they are centralized. With decentralized currencies, central banks no longer have the ability to destroy a currency over time through inflation. The battle between central and private banks against blockchain technology is as futile as when Hollywood attempted to block web torrent protocols and the Pirate Bay. It is nearly impossible to censor torrent as it is decentralized. The same applies to cryptocurrencies. The fundamental nature of blockchain technology is that is decentralized, thus making it exceptionally difficult to censor. However, the battle between blockchain technology and the banking industry is going to be a much bigger battle than that of Hollywood and the BitTorrent protocol. As investors and everyday people become more aware of the risks involved with keeping their wealth in fiat currency, this will lead to the inevitable widespread adoption of cryptocurrencies. Additionally, as people learn of the increased utility provided by Ethereum as compared to Bitcoin, this will lead to the price of Ether to outpace that of Bitcoin's. We have already begun to see this trend emerge as the price of Ether has increased 230% to that of Bitcoin since September 2019. Just as we look back on 1517 as the year when the concept of separation of church and state was born, in the future, humanity will look back on our time as the birth of the concept of separation of government and currency. Although Bitcoin is the first step in transitioning to a world without central banks that inevitably lead to the devaluation of their fiat currency, and private banks whose actions led to the 2007-2008 financial crisis, Bitcoin is not the technology that will ‘carry us across’ the metaphorical finish line. Bitcoin is merely the beginning. It is the paradigm shift technology that changed the way humanity thinks about currency. It is the technology that has proven to the world that blockchain technology is synonymous with the future. The Ethereum blockchain, on the other hand, has and will continue to prove to be more disruptive to the financial industry than Bitcoin, as it is fundamentally more decentralized, offers liquidity protocols for lending and borrowing, decentralized exchanges, and the ability to programmatically create and execute smart contracts. Decentralized finance and exchanges are already here and will continue to take market dominance away from banks and centralized exchanges. 
 The faster the world transitions to using cryptocurrency and decentralized finance protocols unregulated by governments or centralized entities, the sooner we will live in a more peaceful and equitable world. The Ethereum Blockchain is our path to that future.