Since Aeons ago, people are trading goods and services among one another, first through bartering, then exchanging them through using alternative securities (such as commodity like gold, cash money, cheque, credit card, etc) as payments.
A simple example of a barter arrangement would be when a carpenter builds a fence for a farmer. Instead of the farmer paying the builder $1,000 in cash for labor and materials, the farmer could give him $1,000 worth of crops or foodstuffs.
Although virtually any item or service can be bartered if the parties involved agree to the terms of the trade. It is impractical because it takes a lot of time and work. Consider what life would be like in a barter economy. You were a skilled artisan who made tables, then you’d barter tables for the things you need, like food. You need to search for someone who is both in need of a table and has food you want. It takes a lot of time and hardwork, and you’re hungry now.
Another problem barterers run into is deciding on an equal trade. You’ve probably heard the expression, “It’s like comparing apples to oranges.”
The 2008 financial crisis was the worst economic disaster since the Great Depression of 1929. Since then, the ‘trust’ element of our existing financial instruments is lacking in the minds of most people. People started to lose confidence in governments’ and financial institutions’ abilities to manage currencies using existing laws and regulations. This gave rise to the impetus of developing alternative ‘trusted’ security from Fiat currency (such US Dollars, Euro, etc).
Notes: Financial instruments are monetary contracts between parties. They can be created, traded, modified and settled. They can be cash (currency), evidence of an ownership interest in an entity (share), or a contractual right to receive or deliver cash (bond). Fiat money is a currency that a government has declared to be legal tender, but is not backed by a physical commodity.
In 2009, a person or group of people known by the pseudonym Satoshi Nakomoto invented and released the blockchain technology as a way to digitally and anonymously send payments between two parties without needing a third party to verify the transaction. It was initially designed to facilitate, authorize, and log the transfer of bitcoins and other cryptocurrencies.
In September 2017, bitcoin broke a previous all time high of just over US$5,000 before falling back down in price. With a current market cap of approximately US$88 billion, Bitcoin now has a larger market capitalization than the GDPs of nearly three quarters of the world.
Chart from https://www.cryptocompare.com/coins/btc/overview
Flash News (31-Oct-17): CME Group Inc. is planning to have Bitcoin Future Contracts listed in its exchange before end of this year – The implication is volatility of Bitcoin currency can be hedged! It addresses a major concern of Bitcoin’s usefulness as a stable stored currency.
CME Group Inc. (Chicago Mercantile Exchange & Chicago Board of Trade) is an American financial market company operating the world’s largest options and futures exchange.
If you would like to know whether you are ready for it, please read my recent post on “5 Tips To Trade Bitcoin Or Volatile Cryptocurrency”
For cryptocurrency starter, you may like to consider opening an account with Coinbase, a secure online platform for buying, selling, transferring, and storing digital currency.
Note:- If you buys or sells US$100 of digital currency or more through Coinbase using this link, you and your referral will both get US$10 worth of free bitcoin.
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
To understand more about Cryptocurrency, Blockchain, Bitcoin, Bitcoin Cash, and Ethereum, an article written by Business Insider Author Andrew Meola said it all simply.
To watch educational videos Blockchain Technology & Its Disruption Power.
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Thank you for dropping by.
Reuben Ong
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