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News Link • Currencies

All Things in Life Are Transient, but Cryptocurrencies Are Here to Stay


Money or its equivalent has been around for nearly as long as humanity – before it was expressed in coins and banknotes, it was anything of value that could be traded for things one wanted: furs, tools, food, precious stones, etc. In this system, the actual value of exchange is arranged by the buyer and the seller, depending on the time of purchase and the current market needs. The more popular a particular form of payment, the more sense it makes to accept, accumulate, and use it. Over time, for various historical, economic and social reasons certain payment methods may grow or decline in popularity.

The money as we know it came into being many millennia ago, to add a level of objectivity and to simplify the calculations of the rate of exchange. How many roosters is a bull worth? What is a fair value of a plough in chicken eggs? These answers are subjective, which makes trade hard to predict. Money took on the role of a universal means of payment. Initially, the money was backed by some form of security, but all money in today's world is symbolic and based on trust. And wherever trust is involved, it can be lost.

For money to be considered legal tender, it must meet certain criteria, most of which are nearly impossible for an average consumer to analyze. The history and structure of money has been studied extensively, and many scientific works zero in on a key question: the role of the issuer of money. Who should be allowed to issue it? Does the position of an issuer affect the value of money, and if so, should this role be delegated to a central authority? In the traditional model of money, the central issuer is a mandatory requirement. In today's world, this function is assigned to Central Banks, which issue the money, which is then held for consumers by banks. This model is problematic – for it to function properly, the stability of banks must be trusted, and this cannot be guaranteed as it depends on too many factors to control.

Rapid technological development brought with it a solution to many of the issues which traditionally plagued money – i.e. the control over money supply. In the words of Albert Gore, US Vice President, Winner of Nobel Peace Prize, "I'm a big fan of Bitcoin […] Regulation of money supply needs to be depoliticized."

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