Bitcoin primer

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First, it needs to be a medium of exchange so you and I can transact in various goods and services. That requires wide acceptance. It also needs to be a stable store of value so that I can place a certain amount of value from my economic efforts into that particular currency and retrieve it at a later date.

It's not a currency. I wouldn't be surprised if it wasn't around in the next years. Bloomberg L. Mercatus Center. George Mason University Kroll, Ian C. Davey, Edward W. Purdue Exponent. As deflation happens the incentive to hold bitcoins and not spend them increases. Retrieved 5 September Money from nothing. Chronic deflation may keep Bitcoin from displacing its rivals.

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Write for Kryptomoney. Price Analysis. Press Release. Submit Press Release. Submit Guest Post. Buy Crypto Now. Home Sponsored. Bitcoin primer by KryptoMoney Staff. February 17, Share on Facebook Share on Twitter. What is Bitcoin? Next Post. Email Subscription. First Name: Email address:. Social Icons. Keep in mind that we may receive commissions when you click our links and make purchases.

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Blockchain explorer. More important, it also made people think that buying and holding bitcoins was an easy way to make a buck. As a result, many—probably most—Bitcoin users are acquiring bitcoins not in order to buy goods and services but to speculate. First, it needs to be a medium of exchange so you and I can transact in various goods and services. That requires wide acceptance. It also needs to be a stable store of value so that I can place a certain amount of value from my economic efforts into that particular currency and retrieve it at a later date.

It's not a currency. I wouldn't be surprised if it wasn't around in the next years. Bloomberg L. Mercatus Center. George Mason University Kroll, Ian C. Davey, Edward W. Purdue Exponent. As deflation happens the incentive to hold bitcoins and not spend them increases. Retrieved 5 September What is Bitcoin and how is it different from traditional currency? Bitcoin and other cryptocurrencies, such as Litecoin, Ethereum, Zcash Investopedia , , are digital, de-centralized, and verified currencies.

Want to Learn More? Here are several resources that may be helpful for your students or you:. As a young Indian immigrant, Hari was extremely privileged to learn about financial literacy by way of his parents Question of the Day: Who loses money to fraud more often - people ages or ?

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Already a member? Log In. Take the quiz to quickly find the best resources for you! Toggle navigation. New to NGPF? Create Free Account Log in. My Account Log Out. Create Account My Account. Log in Log Out. Back to Category Back to Category. Jun 01, Current Events. Cryptocurrencies work in a similar way in that they can be used as a medium of exchange, but instead of a physical exchange of money, they are a digital currency and all transactions occur over the internet.

Assuming most people are holding traditional currencies as a medium of exchange to buy goods and services, and not as an investment vehicle, it would be great if they could guarantee the currency was not counterfeited while avoiding government-related currency risk.

De-centralized cryptocurrencies provide this exact benefit. Each transaction is verified and validated [using complex mathematical calculations], resulting in ledger or log of these transactions that is public and transparent. More merchants, such as Microsoft, Overstock. The majority of merchants do not accept Bitcoin and those that do frequently partner with Bitcoin exchanges that immediately convert the cryptocurrency into traditional currency, suggesting current skepticism about the ability for cryptocurrencies to replace traditional currencies as a medium of exchange Time , January Investments: In short, Bitcoin are traded in little-understood, highly-volatile markets, and thus should be avoided as a primary investment vehicle.

High Volatility: Typically, the value of Bitcoin is quoted in relation to US Dollars, and just like with traditional currencies, this market rate can fluctuate. Uncertainty about the supply of and demand for Bitcoin largely contributes to this high volatility. Fluctuating Demand for Cryptocurrencies : Demand for Bitcoin is incredibly volatile since the market is in a nascent stage.

For example, there is speculation that recent large buying of Bitcoin by Asian investors is attributed to the recent rule changes in Japan where Bitcoin is now allowed to be used for online payments CNBC , April This and other external events that can dramatically affect the demand for Bitcoin contribute to increased volatility in the spot exchange rate for cryptocurrencies. Future Hedge Against Inflation: While cryptocurrencies are largely a speculative investment, their de-centralized nature, whereby the supply is not controlled by a government, could potentially make them a good hedge, or risk management vehicle, against rising inflation or depreciation in the value of traditional currencies.

Here are several resources that may be helpful for your students or you: What is Bitcoin? About the Author Hari Vasu-Devan As a young Indian immigrant, Hari was extremely privileged to learn about financial literacy by way of his parents Subscribe to the blog. Email Address. Sending form One more thing! Sign Up for Our Newsletter! Success message here. Notification message here. Copyright Next Gen Personal Finance. Terms and Conditions Privacy Policy.

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