Hello beautiful people,
As the community has specified Monday for crypto currencies therefore, from now onwards I will try to share some valuable information on crypto currencies, so that newbies can learn from it. I will try to explain the economic aspects of crypto in forthcoming articles Insha’Allah.
So, let’s start from the very beginning of crypto
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Long time ago people used to barter goods for goods. For example, rice for flour etc. As there were no common measure of value. For example, I want to barter 6 apples for bananas. It was difficult to decide how many apples would you exchange for one banana? People realized the flaws in the system of exchange.
So, a new and modern system of exchange came into being which were called paper currency. Paper currency is the currency nowadays we are using as a medium of exchange. It is used for day-to-day transactions.
But with the innovations and advancement in technology, there came a new type of currency came into existence which is called crypto currency.
What is crypto currency?
In simple words, it is virtual, or we can say a digital currency that is used for medium of exchange. It has no physical appearances. Crypto currencies use a technology called blockchain. It is decentralized technology which ensures the reliability of transaction data. Simply, blockchain is used manage transactions of currencies. It is also used to record transaction of currencies.
[pic credits: www.publicdomainpictures.net]
Some famous crypto currencies
There are so many crypto currencies right now. But few I will list down few famous crypto currencies here.
- Bitcoin
- Ethereum
- Litecoin
- Ripple
- stellar etc. etc.
Why crypto currencies are so volatile?
Crypto currency market is based on speculation. A speculator is a person who work is based on available data to earn profit. Speculators are risk lovers who bet on prices that It will go down or go up on the basis of available data. The crypto market flourishes on speculation
Conclusion
The significance of banks has been reduced with the emergence of Crypto currencies. Because crypto currencies do not necessarily required banks as medium of dealings etc. it is considered illegal because countries worry about the illegal transactions that are not recorded with government. they fear about money laundering, the enhancement of informal economy. Govt fears are legit as crypto if become legal will hamper formal economic activities. it will increase money laundering and people will transfer illegal money to anywhere they wants. the importance of central banks will be lessened. that will further create problems.
what do you think about crypto?
comment below, lets have a fruitful debate!!!
I hope you people have enjoyed it. next time, i will try to come up with more important informations regarding markets for crypto and its impact on developing countries like pakistan. See you till next Monday.
worthy Mentions
@haidermehdi @steemit-pak @hassanabid
@event-horizon
@salmanwains