The digital reality. As bitcoin has become part of our life and asset investment
However, the cryptocurrency market virtual and speculative in nature. Cryptocurrencies are not secured with real financial assets that are not correlated with such basic economic concepts as gross domestic product, national income, exports and imports. The dollar is based on the full power of modern high-tech American economy, the ruble — oil and gas reserves of the country, which will last for decades, if not centuries, yuan — dynamic consumer market of half a billion people in China and the planet beyond.
Bitcoin, Ethereum and all the other alternative cryptocurrencies (collectively Althingi), by contrast, were born in the depths of computer networks. In Venezuela cryptocurrency tried just recently to bind to the oil, creating El Petro, but note that it happened in the national economy, which is now in the peak of hyperinflation, that is, in a country where money every day loses its value.
However, the financial base of cryptocurrencies exist. The same bitcoin has a finite volume of money supply (21 million coins), which now produced 12 million, and mathematically grounded end date end hash — 2140 year, when will the last bitcoin mined.
This means that in contrast to the classical cash, the cryptocurrency is not subject to this method of depreciation, as a monetary issue, no one can turn a virtual machine, similar to the printing press in the world of classical money, and derail the course of bitcoin. Perhaps that is why the Venezuelan government took over the cryptocurrency like a drowning man at a straw.
Remember also that the dollar is the main universal payment unit — since 1978, since the final shift of the Bretton woods monetary system in Jamaica based on free convertibility of currencies, no longer pegged to gold bullion.
External and especially internal debt totaling more than $19 trillion is such an astronomical amount that if the two major creditor of the United States — China and Japan — intends to cash in their securities, the world’s largest economy will face imminent default.
Of course, such destructive actions any of these countries, no other major creditors to do not be, because in this case, under the rubble of the financial collapse will be the whole global economy, without exception, including the national economy of these countries. However, from this example we see that cryptocurrency no more ephemeral than the “traditional” funds.
Not only increase, but also to keep
Another weak point of the crypto — security of investment. Recently made a lot of noise the story of how because of an error in the software code the company Parity was forced to freeze significant amounts of placed in the second most popular cryptocurrency — Ethereum.
The developer of the code allegedly accidentally destroyed a library of data necessary for use by customers of electronic wallets, direct damage — at least $160 million.
It is difficult to deny that the modern cryptocurrency is far from ideal. First, the evident imperfection of computing hardware and due to this factor the lack of speed of transactions. Secondly, there is a lack of integration with the banking sector and the financial system as a whole.
However, it appears that the opponents of cryptocurrencies confuse difficulties the initial development of the stock market long-term trends. The laws of Economics say that any new formation in the economy or politics occurs not immediately, but gradually: it mutates in the old system, gradually transforming it and changing with it.
Thus, the original capitalism since the 16th century had little in common with modern capitalism, just as the modern state — for example, Russia — a little similar to the state sample of the tenth century — Kievan Rus.
New and old school are always side by side and coexist with each other. Take the unfortunate story of serfdom in Russia — in fact, slavery is abolished, I will remind, only in 1861, or with the abolition of slavery in the United States, which was finally prohibited by the Constitution only in December 1865, after the civil war.
From theory to practice
Based on above, will afford some practical recommendations. First of all, diversify your investments. The principle “don’t put all your eggs in one basket” is correct at all times: in the portfolio there must be funds in Bank accounts, shares and bonds, and real estate, and money “under the pillow”, and, of course, cryptocurrencies.
Second: before to start to invest, purchase a minimum of knowledge on the subject, if only for reasons of basic security, not to repeat, for example, the fate of one cryptocurrency enthusiast, who showed the key from your e-wallet, the TV channel and was, of course, immediately cleaned cleaned out by hackers.
And, third, do not join the majority of investors. Look not only bitcoin and Ethereum, who knows whether they are some transitional forms of cryptocurrency, which give way to new trends. Remember that instead of a silent movie later it’s black and white and pagers very quickly gave way to mobile phones.
Look for promising projects, which are implemented using altcoins, and catch the trend in the acceleration of transaction and integration of digital solutions with the real economy.
From this point of view it is important to monitor new trends in the market of crypto-currencies that correspond to its transition in qualitatively new era. Moreover, the projects implemented on the basis of a number of altcoins allow to create in the course of ICO tokens for the tasks real and not just a virtual economy, trading gold to debentures and bonds.
Finally, looking for features that distinguish a reliable company in the market of cryptocurrencies from unreliable players, you should look to the nature of the investment, made through cryptogenes. If these projects are at the cutting edge of the future economy, including the creation of smart cities, smart homes, robotics, and other aspects of economy in the XXI century investments, quite possibly, justified — provided that the organizers of the ICO details inform depositors about the nature of their projects, not limited to vague statements.