Building blocks of crypto — an overview, Pt. 1

Part 1 — Key Issues in The Current Banking System

Genesis Shards
4 min readJul 25, 2022

This article series discusses the building blocks of cryptocurrency — the series of events leading to crypto as we know it today. We begin by discussing some of the glaring issues in the current banking system.

1 — The Current system is Inefficient

The current system of banking is expensive and inefficient, and also takes a significant amount of time. Moving money around requires trust of centralized third parties. Owing to this — one’s funds are not always accessible when the banks are closed.

As an example — in 2008 when Morgan Stanley needed an injection of capital to keep them from collapsing, Mitsubishi UFJ did agree to lend $9 billion to them [1] — however as the banks were closed at the time in both Japan and the US (due to the Columbus Day long weekend), they has write a physical cheque [2] and hand it over to Morgan Stanley executives, in person.

The $9 billion cheque — written by Mitsubishi UFJ

Img Source -Andrew Sorokin [3]

2 — The Current System in not Accessible to Many

Around a third of the world’s population (~2billion) remains unbanked. The vast majority of the unbanked populace live in the developing countries, though there are some in developed countries as well. A key highlight is — there is a strong correlation between “living in poverty” and “lacking financial inclusion/access”.

In the words of World Bank Group President Robert B. Zoellick “Providing financial services to the 2.5 billion people who are ‘unbanked’ could boost economic growth and opportunity for the world’s [impoverished].” He further says “harnessing the power of financial services can really help people to pay for schooling, save for a home or start a small business that can provide jobs for others.” In fact, research shows that “the more [impoverished] people are banking today, the more they are banking on their future[s]”

Ref. — World Bank Report, 2015 [4]

3 — The Current System is Unreliable

Government backed currencies are not always dependable — recent examples being the hyperinflation in Zimbabwe. This led to the issuing of a 100-trillion dollar note!

100 trillion dollar note in Zimbabwe [5]

In 2008, Zimbabwe had the second highest incidence of hyperinflation on record. The estimated inflation rate for Nov 2008 was 79,600,000,000% 5

Image courtesy —

Also this is not a standalone example — there have been several other occasions of hyperinflation in national currencies in the 20th century alone, including

  • Greece, Oct 1944; Highest monthly inflation: 13,800% — mainly caused due to World War 2 which placed the nation in heavy debt
  • Germany, Oct 1923; Highest monthly inflation: 29,500% — caused by Germany printing a lot of German Marks to buy foreign currencies to repay World War 1 reparations
  • Yugoslavia, Jan. 1994; Highest monthly inflation: 313,000,000% — caused due to conflict in the region, local economic crises and governmental mismanagement

As seen above, the current monetary system does have several shortcomings. The next article in the series discusses the quest for digital money- which began as far back as 1983, and tried to address some of these issues.


1- PR from Morgan Stanley in 2008 :


3- [mentioned by Andrew Sorkin in Too Big to Fail]





Genesis Shards

Transforming NFTs into a liquidity vehicle for Pre-IDO tokens and a whole new suite of DeFi products across multiple blockchains.