Here is what I love about Bitcoin, other crypto and data-driven currencies. It has finally forced people to think about the concept of money and what money really is.
People would get in their cars every day and commute an hour to work, sit in an office and or cubicle for 8-10 hours and commute another hour back home, working for money but they have no idea what money is!
Here is the biggest thing you need to know about money, it was created by people and the market, NOT governments and central banks.
People in the market exchanged goods and services with each other through barter and needed a more efficient way to facilitate trading and exchanging value with one another.
The need for a more efficient medium of exchange and representation of value was needed, so people decided what would be used as money.
Money has been many things, sea shells, tally sticks, gold, silver and paper notes. It was whatever the people and the market decided what money was.
Aristotle actually really liked gold as a form of money for the following reasons:
It was durable and did not rust, erode and rot like other commodities.
It was portable since it is moved easier than cattle and other livestock.
It was consistent, an ounce of gold in Asia was an ounce of gold in Europe.
It was divisible, a bar of gold could be melted down and divided into equal gold coins.
It had intrinsic value since it took energy and effort to mine and thus also creating a scarcity of the metal.
We currently all over the world use fiat paper currencies.
It has not been backed by anything since 1971 when Richard Nixon took the world of the gold standard by ending the convertibility of the U.S. dollar to gold.
A fiat currency becomes money through a decree and law by government and is legal tender for a specific geographical area and country. The U.S. dollar is a fiat currency that is legal tender in the United States.
It’s not backed by ANYTHING.
No currencies in the world are backed by anything other than the trust that it is actually worth something and it is legal tender in the country that you live.
Bitcoin, crypto and data-driven currencies are not issued and controlled by ANY central bank and government.
It is the people and market that has given it value.
They have lost trust in the fiat currencies in their countries and people and the global market came up with a solution.
Data-driven currencies. Crypto Currencies. Bitcoin.
Bitcoin being the leading data-driven currency right now has challenged people to think about what money really is and allow people and the market to decided what money is.
It looks like there is a new medium of exchange and a form of money that will represent value.
Bitcoin might come and go if the market comes up with something better but data-driven currencies are here to stay because money is now DATA.
Live a Life of Passion & Purpose on YOUR TERMS
M.C. Laubscher
M.C. Laubscher is the President and Chief Wealth Strategist of Valhalla Wealth Financial and host of the popular business, investing and financial podcast, the Cashflow Ninja podcast.
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