17 Nov Crash course: Bitcoin, Tether, Fiat money – current procedures and dangers
Money is what counts, or what the money functions such as holding, exchanging, calculating, etc. fulfills. “Fiat money” (Latin for “it happens” money) such as the euro does not correspond to any commodity such as coffee, sheep, wheat, etc. but has a defined value that is usually created by state central banks, ie the central bank is believed to be the Value is somehow guaranteed through it. Since, according to the 1st semester of economics, value is formed from “scarcity and utility”, Bitcoin could develop through scarcity (max. 21m piece could be determined by arithmetic operations ((“mining”)), currently it is approx. 18m) and develop benefits. Some had started to take it as a virtual transfer of value, then it became more and more that followed and so “transfer of value and speculation” emerged as a benefit. And the performance became a perpetuum in se. A “self-accelerating self-runner”. However, since the transfer of fiat money into crypto values (please: “crypto value” or “cryptoasset”, never crypto currency or cryptocurrency. The terms currency and currency are reserved for real values / currencies guaranteed by the state. Thank you.) Like Bitcoin, is regulatory and technically complex , for example, “Tether” was formed as a 1: 1 crypto value deposited with dollar values in between. Something like tether is called stablecoin because it should be backed 1: 1 with real currency. A large part (approx. 50%) of Bitcoin trading takes place in a simplified way with Bitcoin against Tether. Instead of Bitcoin directly against real currency such as euros or dollars. Personally, I consider Bitcoin (for me “the”, because coin means coin.) To be outright speculative nonsense, which, similar to a pyramid scheme, will make some rich at the beginning and many greedy stragglers poor in the end. Whoever wants to gamble should, in my opinion, rather go to the casino. But that’s another story. “Tether” is currently under supervision by the US law enforcement authorities because there is a suspicion of cheating in the promised 1: 1 deposit. Not a distant assumption, since billions of dollars are at stake and greed can never be ruled out. If this is confirmed, the entire crypto market (trade) could crash into the basement. In my opinion, it belongs there too. These things generate hardly any economic benefit, but generate high senseless ecological damage through immense power consumption. A visit to the beautiful state casino with a mechanically activated turntable would also be more charming from this point of view. My even better suggestion: board games with family and friends at home. Without spending money. With a thrill.