In 2022, DXY index (showing relative strength of US dollar) was around ATH since 2002, and shortage of US dollars, which is still the most popular world’s trade and reserve currency, was reported for different countries in Africa and Asia:
- “Ghana plans to buy oil with gold instead of U.S. dollars” Ghana plans to buy oil with gold instead of U.S. dollars | Reuters
- “Egyptian banks tighten dollar limits after currency pressure mounts”
Egyptian banks tighten dollar limits after currency pressure mounts | Reuters
2023 is a bit better but still there’s shortage of dollars (e.g. India Offers Rupee Trade Option to Countries Facing Dollar Shortage - Bloomberg ).
Why is it the case? There’s no public information I am aware of, and in general offshore US dollar system (aka the eurodollar system , https://www.youtube.com/watch?v=g_aSqVyJ2wE , https://www.youtube.com/watch?v=8GwjR7yRGGs ) is very obscure.
Add on top attempts to create a plethora of new international currencies (such as BRICS’ one which will be gold-backed currency for international trade, similar attempts to build Latin American currency led by Andrés Arauz, attempts of sub-Saharian countries to get rid of colonial CFA currency controlled by Paris), and now it is quite clear that the World needs for more money for international trade, and so for more collateral money can be issued on top of (by private companies, private banks, central banks, and so on). Gold would not be enough.
Bitcoin as a digital gold is even better than gold under certain plausible assumptions (that is one of reasons why KYA approach, simple consensus protocols analyzed accurately from all the angles, cautious protocol update policies do matter). What it lacks is possibility to create trustless derivatives on top of it. For example, as Bitcoin (and other cryptocurrencies) users suffer from high price volatility, it is desirable for many to have stable-priced trustless asset on top of Bitcoin, i.e. algorithmic collateralized stablecoin, but Bitcoin does not allow for that. This is just one example where Ergo is useful for the real world when Bitcoin can’t help.
However, with overcolleralized trustless DeFi, ability to create money on top of collateral is limited. For example, if Ergo market cap is $1B, capitalization of an overcollateralized stablecoin on top of it would be less than $1B.
So for the real world, there is need for:
- including more assets, so not just Ergo, but other tokens, such as tokenized real-world assets, NFTs, etc
- allow user to choose fully trustless or trusted or hybrid financial tools on top of collateral
Good example of such flexible monetary system on top of Ergo and custom tokens is ChainCash ( https://www.youtube.com/watch?v=NxIlIpO6ZVI ).
Concluding, Ergo as digital gold with contracts giving possibility to build trustless financial instruments on top of it, and different solutions (such as ChainCash ) to expand monetary base on top of the base Ergo layer without forcing users to accept money of quality they are not happy about, are able to help the World to solve different economic issues.