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Is the $100 Bill in your Wallet, Money, or Something that has No Value?

The first official currency is thought to have been created in 600 B.C. by King Alyattes of Lydia, now part of Turkey. However, the present system of currency has a vague future. Let’s try and find out why?

What is money?

What Happens when the Government Controls the Money?

During WW2, i.e., from 1939 to 1945, Germans were finding and killing all the Jews present in the country. At that time, the German banks were working, and everyone who had an asset used to keep them in banks for extra security.

Jews During WWII (Source: AnneFrank.Org)

What is Money?

Now according to google, money is a medium of exchange in the form of COINS & BANKNOTES. But didn’t we just say that the currency provided by a government has no value until the government says so? Do you think it’s not how that works? Ever heard of something called demonetization?

What does the term money mean in the present era?

As of now, our entire financial ecosystem is built around the debt/ credit model run by the banks. So basically, it's the banks that run the world. What banks actually do is, through credit, they expand the supply of money.

2008 Financial Crisis (Source: The balance)

The aftermath of failure

We did talk earlier that the government can print more money, as much as they want to. Hence to tackle the failure of banks, the government keeps printing more money, such that the condition remains stable.

Why would you want a transition to something else?

Since FIAT is an inflationary currency, and Gold is too hard to transport. We need something better, something that is able to fit in the below points (including many others):

  • A single entity does not have control over it (Governments control FIAT).
  • It is limited in supply, so we cannot produce more of it (we can print as much currency as possible).
  • Something that’s easy to store, carry, and widely acceptable (The cost of transporting hard metal like gold, silver, etc., is too much).
  • Nobody must have the power to take it away from you (The government can seize all your assets, including the currency in your bank accounts. Further, anyone can put a gun on your head and take away your gold holdings).
  • If it’s digital, it should be secure enough so nobody can access it except you.
Bitcoin vs Gold (Source: Forbes)

What are the alternatives to FIAT?

We can rule gold out as it’s too hard to carry from one place to another. Further, once its reserves are near to end, humans tend to find more and hence keep the supply constant.

Bitcoin in Making

What do Cryptocurrencies change?

We are observing a revolution; some call it a technological revolution, I prefer it calling a financial revolution. Blockchain technology (the tech behind crypto assets) is still in its infancy, hence with time, its growing at an unprecedented rate. Even while I’m typing and you’re reading this story, things are changing in the crypto ecosystem. The thing that matters is whether we’ll be able to stay updated with the changing world.

Statue of Satoshi (Creator of Bitcoin)

Is it too volatile? Yes. Will it stay that way?

Most of the people who despise bitcoin come forward with a claim that it is too volatile to be accepted as legal tender for the exchange of goods or services. The thing they forget is, bitcoin has been here for just more than a decade, whereas the concept of banks was first introduced in the 14th century.

So in the end, what’s going to happen?

Bitcoin is here to stay; it has been in the process of making for a long time, long before 2008, when Satoshi Nakamoto first released its whitepaper. We are in the middle of a financial revolution, and I believe the journey forward is coming with a lot of ups and downs. However, in the end, the crowd will always choose something that gives them more control over their assets. Finally, the reason all the governments and banks are scared of bitcoin, as it takes away their monopoly, i.e., the currency.

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Coinmonks (http://coinmonks.io/) is a non-profit Crypto Educational Publication. Follow us on Twitter @coinmonks and Our other project —  https://coincodecap.com, Email  — gaurav@coincodecap.com

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