The Nature of Cryptocurrencies Part 1: Understanding Money

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What is Money?

Origin & Evolution of Trust in Money

What am I referring to?

Imagine buying your groceries with salt?

What if inflation was very high the last couple of years and you want to buy a month’s worth of groceries?

Imagine bringing huge amounts of salt to the supermarket?

And if you’re the grocery owner,

Imagine having to weigh the salt being paid to you by your customers and needing a very large space and vehicle to store and transport all that salt?

What if it rains?

Can you see where I’m coming from?

Now think about this.

Which is easier to carry around ?

Paper bills worth $500 or Solid Gold worth $500?

Another thing to think about is which is easier to break into smaller pieces or value for change, Paper bills or a Gold Bar?

If you want to buy a bag of potatoes for $10,

You’d only have to pay the recipient one $10 bill,

But if you’re carrying around $500 worth of gold, you’d have to cut it proportionately to an amount that closely or exactly represents $10.

“Fiat”

As mentioned earlier, the trust in the value of money has shifted from Something (Gold) to Someone (The Government).

Now, why is this a serious concern?

The Reason?

One of the most basic principles of economics:

Supply and Demand.

Centralized Digital Cash

In the Era of Digitalization,

How does money in its digital form work?

What systems are in place to prevent double-spending of money?

Challenges

There’s a proverb that goes “absolute power corrupts absolutely”.

Silver & Gold

Let’s talk about gold and silver.

Why?

Because of its connection to money.

To be more specific, gold and silver aren’t just investments

They’re money!

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Engineer by Day | Passive Income & Crypto Enthusiast by Night | Financial Independence Journey from Zero | Make Money Online