Should You Invest in Cryptocurrencies?

You don’t have to know much about finance to know that banks are inherently greedy. Many people are reticent to put their faith in a cryptocurrency (after all, the prefix “crypto” isn’t exactly reassuring), but these currencies are actually the best solution to the modern world’s many current financial crises.

How Financial Institutions Fuel Their Own Greed

If you’re newer to the world of finance, don’t worry. There are a few concepts that will make you understand the issue at hand. Currently, one of the biggest issues in finance is big banks’ use of “fractional reserve banking“.

It allows them to lie about how much money they actually have–it’s essentially a house of cards, evinced by the bank runs of the ’30s. Simply put, if everybody wanted to take their money out of banks, they couldn’t, because banks don’t have it; it’s imaginary, existing only in their books.

Resisting Deflation: Why Cryptocurrencies Can Do It

With Bitcoin and other varieties of cryptocurrency, there is a fixed amount of the currency available. There will never be more Bitcoins than there is presently. This is one of the biggest differences between online cryptocurrencies and nationally endorsed Fiat currencies.

Government institutions like the Federal Reserve essentially “print” money out of thin air, Bitcoin will never pretend as though there is more bitcoins in the world than there actually are.

If that all sounds a little complicated, let’s break it down a little: think of a nation’s currency as a punchbowl. When the US Dollar emerged, it was backed by a reserve of precious metal–a dollar was like a “receipt” that could be exchanged. This is no longer the case.

The Federal Reserve essentially waters down the punchbowl each year by printing more money. Consequently, the punch isn’t as strong as it used to be (a dollar doesn’t buy what it used to). That’s how deflation works – that’s the essential concept behind the deflation of a currency.

Counter-intuitive though it may seem, cryptocurrencies provide a distinct advantage over our current monetary systems here. Unlike government organizations, a cryptocurrency’s circulator must be completely transparent and accountable to customers; including providing accurate details of the currency’s supply and demand. It’s harder for cryptocurrencies to dodge promises and responsibilities.
With a fixed amount of currency available, it’s much more likely that the value of the currency will go up, especially as demand increases.

Should You Invest in Cryptocurrencies?

Clearly there are some distinct advantages to this new form of money; however, you should always do your research. Check out a cryptocurrency’s customer reviews, as well as its value and performance over time. You can find more valuable info in the useful recommendations provided by Crypto Money Guru.

While you shouldn’t cash in your life savings to invest in a potentially fly-by-night online currency, if you find a reliable one, it’s a way to take a stand against the in-born greed and disgusting policies that large financial institutions have been getting away with for over a century.

Tags: banksbitcoincryptocurrenciescryptocurrencymoney

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