Eps 4: Bitcoin vs. fiat currency: what's the bigger scam!?
If not, malicious parties could easily disrupt the currency system by flooding it with fake bills, thereby negatively impacting the currency's value.
You are encouraged to form your own opinion for this projection and adjust the valuation .
The projected velocity of money could be treated as roughly equal to its current value.
Host
Ann Taylor
Podcast Content
Starting with the placement, Bitcoin could be used to exchange the currency for Bitcoin or move money from one country to another. While most criminals use Bitcoin to get money, their main problem is to pump illegal money back into the economy while their illegal activities are hidden. Many criminals launder their cryptocurrency without the help of a pure - des - counter broker.
Supporters of the cryptocurrency argue that Bitcoin is more trustworthy than paper money, owing to the high inflation known as the plague of the fiat currency. The $21 million spending cap on bitcoin places no limit on how much money can be produced, making inflation impossible.
This allows users to retain most of their inherent value when they switch from fiat to bitcoin, and vice versa. This is in contrast to Fiat money, which can be printed at any time, which means that paper notes have little or no value.
By contrast, most other cryptocurrencies cannot be directly exchanged for fiat currency, or lose significant value on such exchanges. Bitcoin is so decentralized that it is possible to buy and sell bitcoin in virtually any quantity at any time, which is a huge advantage over fiat currencies like the US dollar. If you are serious about reducing your exposure to the fiat currency, Bitcoin's growing acceptance in the mainstream should be of great help.
Coinbase is a broker and a digital currency exchange where you can buy and trade bitcoin and a few other cryptocurrencies. It differs from traditional cryptocurrency exchanges in that it allows you to buy crypto without using the fiat currency.
Founded in 2012 in San Francisco, California, it has assets of over $20 billion and is considered one of the largest cryptocurrency exchanges in the US and the world. According to Coinbase's website, more than $50 billion has been traded in crypto so far this year.
While cryptocurrencies are gaining momentum as enthusiasts have predicted, there remains great uncertainty about what makes up the various currencies. While traditional financial institutions are warming to the idea of digital currencies and the ways in which they operate, few have advocated introducing them on a grand scale at the expense of fiat money.
Cryptocurrencies have proved to be a major source of investor enthusiasm, with some investors predicting that one or more tokens will eventually replace the fiat currency.
Many governments and companies have found that Fiat currencies are so unstable that they are exposed to decay and depreciation over time. Fiat currency is issued by a government, but it is not supported by anything other than the confidence that a person or government has in the currency and the parties that accept it. Many global currencies have been classed as fiat since countries abandoned the gold standard to ease concerns about a run on federal gold supplies.
To be an investment in value, a successful currency must meet a set of qualifications related to its use as a currency, its value as an asset, and its ability to store value.
Dollar, pound, yen or any other currency is a fiat currency, which means that it has a government that decrees it as legal tender. Most Fiat currencies ever created will eventually become worthless, but those that exist now are relatively young and have lost their purchasing power. When governments fail, their fiat currency is worthless and the value of the currency falls.
While paper money has traditionally been valued as a physical commodity, such as gold or silver, Fiat money is supported by a belief-based system that depends on supply and demand. Bitcoin was invented to be a new modern form of gold and silver because there is no central bank or government responsible for its creation.
Cryptocurrency is a digital form of currency that is not supported by a government and is based on a cryptoalgorithm. The lack of government support makes it impossible to use cryptocurrencies for tax purposes.
The dominance of cryptocurrencies in the world of speculative investment is based on their dominance over fiat currencies such as the US dollar, euro and yen.
A growing number of companies and financial institutions are working with cryptocurrencies, and it is difficult to predict which bitcoins and legacy coins may eventually be the first to make their way into the mainstream. If one or more of these digital currencies do make it into the real world, investors in these cryptocurrencies are likely to reap the biggest gains from their early adoption, but fraudsters are also known to ask people to pay in cryptocurrencies, knowing that such payments are usually irreversible.
This is not because cryptocurrencies are digital; it means that cryptocurrencies stored online do not enjoy the same protection as money held in a bank account. If your cryptocurrency is stored in a company's digital wallet and that company gets hacked or gets out, the government is unlikely to step in to help you get your money back, just as you would store it in your bank or credit union.