Currency without Boarders

Cryptocurrencies will provide a missing piece in the global economy by providing a borderless currency.

There is no currency that is accepted globally. If you take a US dollar to a different country, it is hard to use it at any given location. Instead, you need to swap them out for the local currency. As an individual, this can make traveling abroad a little painful; especially after paying currency exchange fees (not to mention having to carry around cash). This is also painful for global business as well.

If a firm wants to send a payment outside their home market they need to go through a bank. Which then takes their home market's currency, exchanges it for the accepted currency in the other market, and then lets the payment process. This process can take days, and this is the most painless method of transferring payments.

Payments through cryptocurrencies break the barrier, and remove the middle man. Firms can easily find where they need to send the payment, select how much they want to pay, and then click send. Depending on the crypto they use, it can turn days into seconds. This is a game changer for not just large firms seeking to increase their market share, but also for smaller firms seeking to gain market share.

Sending money cross boarders can be as painless as sending an email cross boarders. cryptos are revolutionizing the payment system for individuals, and firms.

Comments

Crypto, Monetary Policy, and Global Trade

Apologies for being reclusive over the last couple months. I've been a little busy relocating. Lets discuss some of my favorite topics: monetary policy, global trade, and (you guessed it) cryptocurrencies. First: Hyper inflation, bad... very bad. very very very bad. controlled inflation, ok. Inflation has taken a beating throughout the blockchain community. Mainly from Bitcoin Maximalists. Scarcity, along with supply and demand, creates value. However, scarcity also leads to a decrease in the velocity of money, and lead to hoarding. Why? When resources are scarce, humans conserve. Think of the price of oil. When the price of oil is high, the price of gas is high. When the price of oil is low, the price of gas is low. You can see the correlation by comparing the next two graphs. The price (USD) of oil per barrel. Chart by MacroTrends The price (USD) of a gallon of gas. Chart by Gas Buddy When oil is abundant: supply goes beyond demand (most recent 2014), and p...

Numismatics: Fiats & Cryptos

The philosophical thought process behind currency has been around for centuries, and has continually evolved. Aristotle gave three functions of money: a means of exchange, measure of value, and a store of value for future transactions. Cryptocurrencies meet Aristotle's three functions of money, but there is still a link missing from this cryptocurrency chain. Averroes added a fourth: a reserve of purchasing power. Not only does money serve as a store of value, but money could be spent at any time without having the need to be sold. This is where cryptocurrencies fall short, and it seems that this could be one of the reasons that we see such sell offs in the cryptoverse. Cryptocurrencies have come a long way since their conception, and have done well (so far) under the 2017 lime light. In order for cryptocurrencies to reach the end goal of a being a true form of money, we will need to see adoption for payments receivable (such as retail) sector. Until then we will continue to ...

Bubbles: Cryptocurrencies, Dotcom, Tulips, USD

There are a few things that we need to look at when comparing cryptocurrencies to bubbles. First, supply and demand. Second, the market. Third, value of money. The cryptocurrency bubble and the tulip bubble have some similarities, as well as some differences. When farmers see the price of crop A increasing dramatically, they have some choices. Ignore the price rise and continue to grow crop B, losing out on the potential gain in income, which some will do. This has no affect on crop A. If they are already growing crop A, then they will be able reinvest excess profits and grow more of their cash crop, crop A. This increases supply of crop A. If they are growing any other crop, and see a price rise in crop A, they will have an incentive to shift from their current crop at the end of the season, and grow a crop that will bring in more revenue (crop A). Increasing supply of crop A. However, increasing the supply of crop A won't happen over night, as crops take months to grow. As c...

cryptonomics

Search This Blog