(Newswire.net — July 15, 2020) — Suddenly, interest in virtual currency and cryptocurrency is increasing. The term virtual currency has been commonly used in Japan, but cryptography (Cryptography) is secured security because it is the currency that is traded on the net. In the recent encryption currency ( CryptoCurrency has started is called) I will.
In the distant past, the currency itself used gold, silver, shellfish, and other rare valuables, and became gold and silver coins. After that, convertible notes (convertible currency) were issued against the backdrop of creditworthiness based on the possession of gold and silver by banks and the state, but nowadays, convertible notes, the equivalent currency is not guaranteed. Still, the state does not guarantee the exchange with gold etc. Banknotes (fiat currency) are the mainstream.
Cryptographic methods for cryptographic methods
Cryptocurrency is supported by cryptographic techniques and is positioned as the currency traded on the Internet. Typical examples are Bitcoin, Ether (Ethereum), and Ripple. There is no national guarantee, but by setting unique restrictions on the issuing form of cryptocurrencies, credit is secured, and rarity and security are guaranteed.
For example, in the case of Bitcoin, the amount of currency issued is limited, the money is reduced regularly, and after mining (the search for logic that can release Bitcoin), and coins are generated. By adopting this new form of coin issuance, we are limiting the supply of currency.
Also, credit is secured by transactions between data (blocks) called blockchains. The point is to chain the bitcoin transaction data, put a time stamp on it, and prevent tampering with the block once set so that the transaction can be trusted.
Using the blockchain, it is impossible to tamper with the data, making it difficult to tamper with the transaction itself or issue a “counterfeit bill,” and it is possible to carry out secure transactions. Click at bwcevent.com to get an idea about bitcoin.
The fluctuation of credit of currency issued by the nation
With regard to cryptocurrencies, there are some places where it is hard to trust because the credibility of the state is not supported. There are some fears, such as “Is issuance really limited and scarcity is guaranteed in the first place?” “Isn’t the credit of money destroyed by a technical hole?” or “Is the issuer intended in the first place?” yes of course.
However, after all, no matter what form coins are in, they are valued only by agreement based on credit. Therefore, there is no difference between the current fiat currency and cryptocurrency in that the value-form is protected based on trust.
Gold is trusted and valued because it is scarce, and as long as the cryptocurrency dictates the amount issued, scarcity value recognition and credit may be maintained.
Many countries print large amounts of banknotes in an attempt to cause inflation. Although you aim for nominal growth, you can print as many notes as you have no support for their value, so you are reducing the relative value of rare items.
For example, the relative value of dollars and yens to gold has halved over the last 20 years. The shift of money to cryptocurrency in China is due to the belief in the nation and the confidence in the nation’s own currency “yuan” issued by the nation. We do not trust our own currency, so we are moving funds to other currencies and land.
In other words, due to the unlimited reprinting of banknotes and the deterioration of the credibility of the nation, the likelihood of fiat money and fiat currency issued by the government is also fluctuating.
The start of selection and selection due to cryptocurrency speculation bubble
Just because the credibility of the currency issued by the nation is fluctuating, it can only be said that the cryptocurrency is definitely in its infancy. The fiat currency issued by the nation is represented by paper or metal that can be physically handed, so there is a sense of security that there is a physical thing that can be taken.
In that respect, cryptocurrency is only data on the Internet, so it will take time to dispel the anxiety as a virtual entity.