Understanding what money are, trying to explain infactions, difference with crypto, and, what i believe cryptos are
i had a question for some time, and i got many answers, what are mooney? and how much do they value?
let's go back in history, before, they had to exchange something, with another thing, like, do you want an apple? ask someone who has apples to give you an apple, and they will ask for another thing that they want, that's barter, you can clearly see many problems in there, what if he wants something you don't have? what if he wants something that for him is the price of an apple, but for you is something much much more valuable?
we need a system of exchange, firsst of all, a universal medium of exchange.
soo, they thought about that, and relized they need something that everyone wants, or at least, everyone has to agree has some value, soo this medium of exchange was salt, preciuos metals, and that was it, you wanted to exchange? you had to use those, that helped the enitre econoomy system, made things easier.
there were still some troubles, taking lots of preciuos metals when traveling, had to weight a lot, and people relized they could scrap away some little material in every coins, and they could then have more money,
soo someone smart thought of something, what if they become this system? what if they are the ones who become the accepted economy system? soo, they proponed something, they would keep people's money safe, and they would give promissing notes that cccertify the owning of those money, and that became the banking system, and the real value than is not anymore only in the medium of exchange, but also, in the trust that the promissing note will actually be exchanged for the mooneys its worth
soo, after the creation of this new system, we can create many interesting projects.
soo when i went to middle school, one of my teachers was talking about his debts, and then said "even this whole state is indebted more money than the whole money there are in the country",
hearing that i thought, he is capping, that can't be real, or is it actually true? is my country failing thiis much? i mean, i knew it was failing, but this much? hell, we are soo fucked, then he said, "every country is more indebt than it's money supply", what? how is that possible? who do we havve to give back the moooney than? how can we all be indebt?
let's take an example, america has a debt of 38 trillions of dollars, while his money supply? 22 trillions.
source
this is a cause of this new banking system, everyone trust this banks that they will give them back theyr money, but they won't ask to give them back, becuase paper is much more manageble than metals, soo the bank just had this thought, "what if we give them a promissory note of non-existing money?" and they could, but, if lots of people would come asking for theyr money back, they might not have enough, and soo, drastic conseguences might come for everyone, the bank, the people who had moooney in that bank, and the state, of course, that's an economic crisis, soo the state had to create some laws to not let that happen.
but this economic system has not really changed as of today, we are based on debt, and there is no coming back, now the debt has become the new medium of exchange.
they can also do many other interesting things, other than creating more money, indebting people, being a factor of inflaction that helps lowering the value of our money, because there are more money in circulations, but the resources? they remained the same, soo, simply the cost increase, and the value of our money ddecrease, that's a diluation of a cake, we divided the cake in slices, and gave the slices to the population, but what if we diluated the cake? and give the same size of slices to the people? the slice will have less sugar.
after that, they can also issue owning of companies, stocks, shares, all thhat based on trust, and that's the real value of the population, but i won't talk about that.
than a new change happened, before, the medium of exchange was free, people choose what it was, then it changed in the trusting of promissing notes, soo basically, trusted paper, than came fiat money, paper issued by the government, with no intrisic value, that happened becuase of the power the bank had, too much, they could basically controll the amount of issued money, and control the economy.
soo the government took this power, and put regulation and supply control, and those are constanlty checked by some of the most big banks in the world.
honestly, even today, i don't relize the real value of these money, i mean, they have value because evryone choose they value something, bbut if they were not, they would value nothiing, and that's what moneys are today, only an accepted medium of exchange, no real value like an apple could have, ass you eat that.
those are fiat money, making a rapid research can give you the popierty that a medium of exchange has to have, but they could also not have all of them, as i said, it's all about trust.
but i don't trust them.
why?
because they are based on trust, of the government, that they won't declare too much of them, that they won't spy on my purchases, thay will give back my money, altrought many times there are limits of what i can do, how many money i can withdraw for example, there are cost also, there are loooots of legal documents, think about this, if you were to ever be in a legal situation for whatever reason,maybe you committed a crime, maybe they just accused you to, maybe you defended your rights but someone more powerfull is not okay with that, they can just block your money, got that? block YOUR MONEY, or maybe even take them from you.
can all of that happend with criptos? maybe, it can, but in some different ways, and you can protect that from happeniing, but you need to understand it before, because for example, bitcoin blockchain is public, for everyone, every single wallet, everysingle payment, public, but what they won't know is who owns the wallet, and you can have as many as you wants, just remember the seed of the wallet, and be sure that it won't be known from someone else.
let's talk about cryptos then, there is soo much to say, i don't even know a lot, i will write what i know.
what is a cripto?
it's a virtual coin that operates on a blockchain, all that based on cryptographic.
it's in some ways similar of digital fiat, but, it's not centralized, it's based on public nodes.
a node from what i understand is just a machine that works to keep the blockchain up.
#TODO conntinnue