Crypto Currencies Pt. I
The best time to start investing is yesterday!
Key Take-Aways
- The future belongs to cryptocoins, the price rally is not a bubble.
- Cryptocurrencies do not need a state monopoly or banks.
- Besides Bitcoin, there are many other cryptocurrencies.
- Which ones will prevail is still open.
For a long time, Bitcoins and other cryptocurrencies were something for nerds: using your own computer to create money that is supposed to be worth something — how is that supposed to work? This changed at the latest when the Bitcoin price soared in 2017: Ordinary citizens suddenly became interested in the new type of digital money, while some renowned economists lent it credibility. This blog article serves as an introduction to the subject. Basenode.io’s head of marketing explains the most important technical terms, explains the technical basics of cryptocurrencies in simple language and gets specific when it comes to buying cryptocurrencies and investing with cryptocurrencies. Further, Ehsan Allahyar Parsa offers a helpful evaluation of the most common digital currencies such as Bitcoin, Litecoin, Dash or Ethereum along with their weaknesses.
The triumphant march is unstoppable.
Bitcoins are the best known cryptocoins or cryptocurrencies. But since the invention of Bitcoin in 2008 by Satoshi Nakamoto, hundreds of new cryptocurrencies have emerged. They are called Litecoin, Dash, Ethereum or Steem, and many of them — like Bitcoin — have experienced rapid price increases, especially in 2017, with gains of several thousand percent. Cautionary tales abound, warning of a speculative bubble. However, the price rally in cryptocoins is not exaggerated; rather, it heralds a paradigm shift. Cryptocoins will catch on, though not all of them.
The old system of state monopoly on money is ending.
Cryptocoins are the antithesis of conventional money; they work, even without a state monopoly or a bank behind them. They were born out of the conviction that the previous monetary system is fundamentally inadequate. Today, the state creates money out of thin air, it can print money — as needed -, incur unlimited debt and oblige citizens by law to accept this official money. If the money supply is expanded, money loses value, and savers are being creepingly expropriated. The criticism of this is not new: The representatives of the so-called Viennese School of National Economics, especially Ludwig von Mises and Friedrich August von Hayek, were already bothered by the state’s control over money. Hayek advocated free competition among currencies.
The history of money has shown that centralized power has always been abused. Satoshi was concerned with creating a system without a central office & without trust.
With the advance of digitalization, this is exactly what has become possible. Cryptocoins have to hold their own in free competition. The rules of the game are clear, the barriers to entry low. Anyone who holds cryptocoins and saves with them no longer has to trust a bank — or an asset manager. Admittedly, even this system is not entirely free of weak points. For example, no one is liable if Cryptocoins are stolen. Some expertise is therefore important for crypto coin holders.
Remarks
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M.Sc. Ehsan Allahyar Parsa is head of marketing at the Blockchain Founders Group — a venture capitalist and company builder backing Basenode.io.
In 2020, he was ranked as one of the “Top 100 Shapers” in the DACH region. Further, he speaks 10 languages and has traveled to 30+ countries, of which he has already worked in 9 spread over 3 continents. He has already been honored by the Chancellor for his social & political commitment at the tender age of 23.
As a sought-after international speaker, the serial entrepreneur is renowned for his speeches on numerous stages like the German Shark Tank Primetime TV Show (DHDL) and the United Nations General Assembly in New York City.
Feel free to contact him via Mail , Instagram or LinkedIn,
