BITCOIN vs DOLLAR

Post #114

Fiat money is a currency that a government has declared legal tender, but it does not back it by a physical commodity, like gold or silver. The American dollar is a fiat currency, and therefore it is not money in its most accurate form. Some economists prefer to use the term currency rather than money because a fiat currency has value only because the government says it has value, and people believe it. It helps that dollars are legal tender, allowing citizens to pay debts with this fiat currency. A dollar bill states, “this note is legal tender for all debts public and private.” The level of usefulness and scarcity determine the exact value of dollars. The more plentiful dollars are relative to the number of goods and services, the lower the value. 

We are on the threshold of a worldwide economic renaissance and the emergence of cryptocurrencies. Cryptocurrency is a digital currency that verifies and records all transactions within a decentralized peer-to-peer system using cryptography. The most popular cryptocurrencies are Bitcoin (BTC), Ethereum (Ether), Ripple (XRP), Bitcoin Cash (BCH), and EOS. There are more than 100,000 websites that accept cryptocurrencies as payment. Visa’s New Payment System Will Accept Everything From Bitcoin to Dollars. Mastercard is said to be planning to allow any bank or merchant on its vast network to accept Bitcoin and offer Bitcoin and Bitcoin rewards. There are currently thousands of banks and millions of merchants on Mastercard’s network, all of which could soon be able to send or receive payments with Bitcoin wallets, earn rewards in Bitcoin through credit and debit cards, and implement loyalty programs whereby card companies will convert airline or hotel points into the asset as a result of the partnership.

There is nothing more powerful than an idea whose time has come. The time for peer-to-peer transactions has come. Is it time for you to enter into this new age? You can enter the world of cryptocurrencies by going to http://bitcoin.com and downloading a wallet. I suggest starting with Bitcoin Cash because the fees are less than Bitcoin. Bitcoin is a currency created in 2009 by an unknown person using Satoshi Nakamoto’s alias. The system makes all transactions with no middlemen, no banks, or governments. There are no transaction fees and no need to give your real name when using bitcoins—people “mine” bitcoins using computers to solve complex math puzzles. Companies store Bitcoins in a “digital wallet,” which exists either in the cloud or on a user’s computer. The wallet is a virtual bank account that allows users to send or receive bitcoins, pay for goods, or save money. Cryptocurrencies may be a hedge against inflation and the inevitable collapse of the American dollar. 

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Published by Kenneth E. Long

Author, college professor of economics, swimming and tennis enthusiast

2 thoughts on “BITCOIN vs DOLLAR

  1. Thank you Ken. I like Dave Ramsey’s advice, “do not invest in anything you do not understand”. That is cryptocurrency to me.

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