CRYPTO-CURRENCY INTRO

I am breaking my promise. Last week I told you I would create a basic explanation of what crypto-currencies are, but I am not going to. At least, I am not going to this week. I have been very busy assembling and studying a great deal of research and realize that explaining crypto-currencies is a much bigger job, especially when I want to put it into a plain language that we can all understand..

Here is what I am doing: next week I will create a post on mutual funds, and then the following week, we will look at Exchange Traded Funds. After that, I will produce a review of digital or crypto-currencies. This includes some popular terms that you have read about like Bitcoin, Etherium, Dogecoin and so on. For your information, there are currently over 4,000 digital currencies in existence – that’s not a typo – 4,000!

Let me offer an opinion about the origins of digital currencies. I think it is a reaction to the overwhelming control forced upon you and I by the central banks and governments who decide our fate through the use of fiat currencies. Fiat currencies are the currency you and I are, or have been, forced to use like the U.S. dollar, the Euro and the Canadian dollar, etc. These currencies are tightly controlled by a tiny group of people and some would argue, not to the benefit of the average person.

So, putting on my tinfoil hat to ward off incoming conspiracy theories, they based Fiat currencies on the “gold standard.” That changed long ago – fiat currencies are no longer based on anything other than the whim of a government body (Federal Reserve Bank) and governments can print money at will. There is nothing to back up the value of our dollar. Currencies are simply a means of exchanging paper for something else of value. The value is artificially created and controlled, as long as people continue to accept it.

Bitcoin, the first and largest digital currency, was created in 2009 and its value, based on US dollars, has ridden a rollercoaster ever since. Some very smart people have warned us against buying or using digital currencies because of the volatility of its value and because it is based on nothing of value. Others would argue that this does not differ from any other currency, and the digital version of currency provides some other interesting advantages.

In considering the feasibility and legitimacy of crypto-currencies, we should wonder why organizations like Visa and Paypal along with many banks and countries are spending so much time and effort considering how they can create and use digital currencies. All of that being said, I have assembled an enormous amount of research and will share it with you keeners. If you are a subscriber to this blog, send me a contact form with your request and an email address that I can send my “cheat sheet” to. If you are not a subscriber – why the heck not? By the way, most of this information will find its way into a book soon that I will happily provide in exchange for your hard-earned dollars or bitcoins.