Cryptocurrency explained for newbies - like me - Part 1

           

Cryptocurrency is a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of  funds, operating independently of a central bank. 

Over the last 6 months I have spoken to a lot of my friends about Steemit.  I have signed up many people to the platform and one of the questions that people seem to struggle with is: Where does the money come from? Now to explain this there are quite a few things to say, so let us start at the basics. 

What is money?

Money is a medium of exchange.  It is a form of trade.  A merchant agrees to accept the money in exchange for their goods.  Every country has it's own currency with it's own value. The value of money is measured against the exchange rate.  In the olden days the value of money was compared to the value of a precious metal - like gold.  In other words, you could walk into a mint with X amount of paper money (whichever country) and use the paper money to buy an amount of gold to the value of X amount.  Today this has changed.  The value of money is influenced by many things.  

On Demand and supply and the money market

The value of money is determined by the demand for and supply of money.  The money market is an economic model that describes the supply and demand for money in a nation. Consumers and businesses have a demand for  money, including cash and checking and savings accounts, and they use  financial institutions for this purpose.    

One thing that we have to remember is that money only has value, because we believe that it has value.  In reality it is a piece of printed paper.  

The only reason why money has value to us is because we can exchange it to get something.  Nowadays with the crime rate going up, we don't actually use paper money.  For example:  My salary is paid into my account.  On paper I can determine the value in my current currency.  I never withdraw any money as I only use internet banking to pay my accounts.  When I go to the shop, I buy everything that I need and then swipe my card.  This is all done electronically.  

Not all countries accept all currencies, so if you want to buy something from South Africa with US dollars you will have to convert the US dollars to South African Rand.  The value you will receive is determined by the exchange rate. Today for 1 US dollar you can actually receive 13.37.  With cryptocurrency you don't have to convert anything.  

                    

So simply put:  Money is just a way of payment.  Whether you use paper money that you can see and feel, or electronic money the bills still get paid.  

This is where cryptocurrency comes in.  Cryptocurrency is only a form of digital money.  There are various currencies available and it seems like a new one is emerging on a daily basis.  Before you can understand where the money actually comes from, you need to watch the following video.  

So why don't we just print more money?

What makes cryptocurrency better?

• With cryptocurrency there is a much more predictable inflation rate.
• An online cryptocurrency is not owned or controlled by any government. 
• There are no hidden costs.  If you pay money from one account to another the only cost will be the exchange fee.  If the money is paid into your account it is instantly available.  
• Money can be sent and received at any time 24/7.  You don't have to wait for the bank to open to go do any business.  
• You can make instant payments to anyone, anywhere at anytime.
• There are so many currencies to choose from you can use the one you like best.  If you are not satisfied with one currency there is the option to choose another one. Ever heard of bitcoin?

Watch this to see how far technology has brought us.  You don't want to miss this opportunity.  Don't miss this train. Get on this train while you still have the chance!  

  Cryptocurrency is the way to financial freedom!

                  

Please follow me