By Richard Forrester
Our finances really need cryptos now
A bit of history, condensed. As soon as humans began farming, the concept of money must have developed very quickly thereafter. Barter must have been pushed aside by the soon teeming and crowded markets in small villages and cities as they grew. Imagine, trying the entire barter scheme for a family with children, carrying trade items, holding transporting purchase items, etc. At that point, using dried mud balls of differing shapes might seem attractive.
Money then is a thing, or substance of perceived value which is commonly used in a group, state, region or, recognized group as a means of value exchange. Salt in the Roman Empire, silver, gold, seashells, pretty rocks, useful rocks and, many things have been or still are being used as money.
Fiat, as a type of money is nothing more than a place marker in modern systems. It’s a piece of paper [or adulterated metals/useful rocks] which the jurisdiction/king/government has mandated to have a certain value, in our monetary system. Its true value comes from the common agreement of all who use it at an agreed upon price. It’s the change in the dollar from being a certificate attached to a certain amount of useful mineral to a piece of printed paper which is said to have value, thus fiat. Look at any of the countries in modern history with an economic crash and a thriving black market - where you see an official and a ‘street’ exchange rate, you see the real value of fiat currency.
The problem we see with fiat currencies these days is that there turns out to be little to no effective control placed upon governments or national banks in their printing of money, which leads to hyper-bubble markets, negative interest rates and derivative anchors of more than $60 trillion USD at some individual banks. It leads to the gross, wholesale dissolution of the value of the currency via price inflation. This is an intentional and additional tax upon almost all working people of a country.
I think we can all find ourselves enough facts to determine our collective governments in this country are extremely out of control - in much more than one way.
Social uses of money types
So do crypto, wampum [sea shells used by American Indians] or, salt turn out to be fiat? Not really. Fiat is usually supposed to be that financial instrument whose acceptance or value is mandated by a singular authority; king, ministry, department, central bank, etc. Therefore, if cryptocurrencies like Bitcoin or Litecoin are not fiat, what are they and how do they work?
Cryptocurrencies are really an intriguing obverse of money[s] used up to this point in human history. Cryptocurrencies are nothing more than a commonly agreed upon money, which seems to be better in a few key instances than modern fiat currencies. Where market regulation is free, value attains a price agreed upon by all, via pricing. Cryptocurrencies, as a commodity, meet this definition. During the development of cryptocurrencies, major amounts of trading didn’t occur until several exchanges were developed, opened and financed, so that value could be established via transactions. That value has been established. As well, cryptocurrencies and their markets have been very quietly being accepted by most major financial systems around the world. Not many of them have begun acceptance of Cryptocurrencies by choice.
What and how?
Crytpo means or refers to cryptography. A key point of cryptocurrencies is that the transaction records are encoded via cryptography after they’ve been recorded in a software application. The transactions are linked and, referred to as a ‘blockchain’. Therefore, the network itself begins to take value.
The means of “making value” via recording and transmitting actions is done via bookkeeping but, in a slightly different fashion. Once the bookkeeping is done, the package is wrapped back up and sent onto the network, for approval and/or confirmation. Once you receive confirmation of your transaction, it’s on the blockchain/network forever. That ‘bookkeeping’, the act of getting software blocks onto the network AND accepted/confirmed, is known as mining cryptocurrencies. That’s another article.
The very best of features though, for consumers of cryptos is that they are deflationary, making them the opposite of fiat currency. How this works is that, for cryptos, part of the software code dictates how many ‘coins’ or ‘tokens’ will be made by the network. A true crypto, then, always has a finite number of coins that can be ‘mined’ in the system. This ensures that, if the coin [network] attracts enough use, over the course of years, the value of the token/coin should rather generally increase. With a finite number of cons and a generally good security scheme, looks like it’ll do well, as Bitcoin has done.
How do these represent value? Well, most generally by the agreement of all who purchase at the agreed upon market price, so there you go. When folks begin to understand that, not only can ‘this money’ not be overprinted, if it’s used at all, the value most likely can do nothing but increase over time. That increase in value over time is mostly due to the value of the token/coin/network as more people come to find value in using it. The cryptography, plus timing of transactions and other methods used in the network, provide near certain proof against network cheating, double spending, and most other common and not so common hacks. So, there’s safety, both physical/digital and, financial….
Controlling your keys
Another of the great features of crypto is control at a personal level. You alone control access to your valued investment unless you give it to someone else or, you don’t follow good security procedures.No bank officer, teller, no vault guard, nothing, nobody. You control you and, that’s it. And the larger part of that control centers around storage.
Storage relates to the storage of your private keys, the keys that control access to your funds. This can and is accomplished by several different types of options depending again, upon what you select.
Keys are really the un-encrypted ‘addresses’ where the transaction that added or subtracted from your balance rests. They’re very easy to store, starting with writing them down on paper and keeping the paper safe. Keys and or wallets can be stored on USB disks, hard drives, documents, any other types of media. Wallets are the approved apps where all this data, including transaction histories, addresses, etc are stored. Valid wallets are almost always easily available on your app store.
Why useful now?
Cryptocurrencies have been in development for a very long time. Of course, most folks realize that Bitcoin was developed/released about 10 years ago - in a white paper authored under the nom de plume Satoshi Nakamoto and, nobody yet seems to have deduced exactly who he is - or was. There are many who claim to know the identity of Satoshi, but none have yet proved it.
The usual parade of blathered economic success figures and stats, grand announcements from central banks and/or central bankers, various articles reviewing the grand success of the stock market and, yet there’s more. Many and/or all of these items seem to be combining forces to produce a really large world wide debt crisis, based upon the leading governments of the world printing almost unimaginable and unmanageable amounts of their currencies, this devaluing it even further and adding more fuel to the potential economic fire coming soon.
Is it difficult?
Many folks simply presume that purchasing and keeping cryptocurrencies is just too technically difficult for them. There’s been quite a bit of development over the past 10 years though. Quite a lot. If you have the ability to install and use an app on your phone - without the aid of children, nieces or, grandkids, you can easily get yourself some cryptocurrency.
Do you find yourself rather consistently leaving the house with your pants on, for example, or driving the car with the keys and your glasses? Then yes, you too can get through the security requirements, basically. Although this has been a very brief take on cryptos, I’m more than happy to help you. For that, I’m adding my Bitcoin and my Litecoin address at the bottom here, as is now customary for when you need to contribute to me. If you need some direct help, please contact me at richard@darq.io.
BTC: [1AAXresRbDJuGAbqBUkQhEeBVjmDgsDnrm]
LTC: [LMtZkcMykiwUDdHUa2xEouV5tBeWJVYHte]