The long road to understand Cryptocurrency

Chapter 1 - What is a currency ?

The reason for this article is a totally misunderstandign of cryptocurrency and blockchain and the necessary to give education to governments and banks in the meaning of currency. This article will clarify what currency is and why the term cryptocurrency is the right title for Bitcoin but not for Altcoins which are asset classes.

I also want to remember you that I am as a part of www.iltes.in also work as advisory to the well reputatated and respected Professor Dr. M.K. Bhandari who is set into the regulation framework in India.

The report given here is very necessary to read because its not about India only, near every state and country in the world sees Bitcoin as an asset and thats a wrong point of view. But first you should read this short report to build your own opinion

https://www.financemagnates.com/cryptocurrency/news/digital-currencies-are-not-currencies-argues-indian-crypto-lawyer/

This leads us into the situation to question wether cryptocurrencies are assets or a kind of money a currency.

Lets have a look at the landscape of regulation. Bitcoin is regulated in Japan as second main currency in 2017. So its a currency. And only Bitcoin has today this state of the art and clarification. Does it harm the japanese economy ? No. Japans economy since then raises again and brought a weak economy in 2016 back to the international markets.

The clarification and justification of Bitcoin as a legal currency eased a lot of things in Japan. Crime in Bitcoin has been reduced, near every Bitcoin product can be regulated under the existing rules without redefining them because money rules are the same to Bitcoin now.

Japan made an overall example that the definition of a currency is nothing which is written down on a tombstone, only because some people want so.

It shows that economy and government only can as good act as the population is willed to accept. This is a very wisdom point of few and shows a lot of respect. But as we know this doesn't change the way how Japan is treating different topics in a way, we can't or won't understand and/or accept. It doesn't change the society itself in the way they live their daily life. But from the point of money the economy grows because most of the Bitcoin owners have more money to spend for goods and this is increasing taxes.

So what is currency ?

In the former times of our society in the beginning of the gold rush and later the first industrial revolution we had always 2 kinds of currency: Assets like Gold used as currency and paper printed money (Fiat) as a promis peged on Assets to do tradings for goods.

During and after the 2nd world war we learned that fiat and gold is not useful handled to be curency, because no one wants to have Reichsmark and trading with gold was complicated because you can't cut that assets into small pieces for example 50ct and exchange it, because the other part has to test if the gold is really gold and if the weight is right and may other factors because its easy to fraud.

During the war people started to use cigarettes as a currency. Why ? It was accepted by everyone. Soldiers from foreign countries have been accepted to trade them against goods, drinks, meals and daily neccessaries.

And exactly this defines what a currency is:

A currency is a trading object which has a value given by the people using it and becomes a measure how many goods you can trade for this.

It doesn't matter if this is printed on paper, gold, silver, diamonds, plants, shells, stones or other items, like cigarettes, vodka and yes in eastern europe there is a mafia robbing gas stations the so called "Nutella Gang" because of the global acceptance and the high price.

A currency is an item of exchange for goods and services wich is accepted by people with or without govenrnance and/or banking influence. Its the free will and the freedom of money

https://money.cnn.com/2013/04/09/news/companies/nutella-stolen/index.html

So why is Bitcoin a cryptocurrency and other crypto coins not ?

In 2009 people get know of a payment processor called "Bitcoin" and have been informed, this is a new kind of money without government or banking influence, if you want accept it. It could be shared to 9 billion people and it is limited at all. So there are only 21 million Bitcoins which you can share (21x100,000,000 pieces (1 Bitcoin = 100,000,000 Satoshis)) The total amount of 2,100,000,000 Satoshis could now become a value for EACH SATOSHI.

And yes it happened: At the moment of the writing about 55,000,000 people in the world hold Satoshis and full Bicoins. So this people accepted Bitcoins as an exchange medium for goods, money systems and trading pairs. They accepted is as a store of value. Also as measurement of economy in underdeveloped countries and states or states in political and financial crises.

Compared in numbers:

Last year 2019 the whole value estimated in the world (Fiat, Assets and whatever) has been 2.4 quadrillion Dollars.

If 1 SATOSHI = 1Dollar it is 2.8 quadrillion dollar. The more people ask for Bitcoins the higher the price no matter if the market is dumped and pumped, because with every dumping more people buy bitcoins to hold them and its harder to fill the trading stocks because the availability of bitcoins is decreasing. The halving of the amount of freshly bitcoins each four years and the growing demand of bitcoins in the wolrd must set up the price over 100,000 Dollar in the next few years and makes fiat money than obsolete.

Bitcoin is accepted Money by Users

Since learned we can't stop Bitcoin from usage as currency traditional thinkers start to talk dirty about Bitcoin and throw some examples of crime in their set of argumentation.

• Use for anonymous transactions and buying illegal stuff
• Tax avoidness
• Supporting Terror
• Destabilizing a peaceful economy
• Price is not stable and shows volatility

And this is the reason why Bitcoin is not dead and must grow. If banks and governments are so eager about telling everyone what Bitcoin is not people start to think there must something more about it, they will hide some informations from us, so we should use it now to participate and not be misleaded by fear

What happens is that people buy Bitcoins at any price. They exchange their money into Bitcoins at a price of 20,000 Dollar also they do at a price of 400 Dollar. It doesn't matter to them. And the reason why Bitcoin is a currency we see on the infrastructure: Exchanges, Debit Cards, Bitcoin ATMs (BTMs), growing number of merchants accepting bitcoins in world wide economy like Domino Pizza, Overstock and many more.

Bitcoin is a currency because it works like Fiat. If the stock markets high everyone is investing Fiat in infrustructures and create jobs.

In Bitcoin we see when the price is high everyone starts to create new technoligies like snowball and infrastructures.

We have Future contracts and Bitcoin Bonds. Quite the same the Fiat world is doing. There is no difference.

So everyone today uses Bitcoin like he is doing wiht Fiat and yes we can exchange Bitcoin likle cash. Writing down the private key on a paper and hand this piece of paper to another person, she owns the amount of Bitcoins. Now open a wallet, insert the number or word phrase from the paper by clicking the "send" button into the btc adress field and voila the btc are there immediately without waiting because the wallet recognize this key or word phrase as incoming bitcoins and not bitcoins to send. So you can work with your Bitcoins like cash, there is no record about this way of transaction.

All in sum this is the reason why Bitcoin is a Currency based on Cryptotechnology. ITs not a Crypto Currency - its a CURRENCY and it can be used without exchanging for fiat like the cigarettes in world war II.

Why are Atcoins no currency ?

Altcoins have been created because people want to have their own kind of tokens and money to do business with IN A CONTROLLED WAY.

EVERY ALTCOIN HAS A GOVERNANCE AND A KNOWN ISSUER AND NO UTILITY

How can we compare Altcoins ? Alternative Coins (as 5600 coins now have proven) are only created to make trading. Tokens are only created to describe a function but mostly and widely used to do fundrising through different methodics (ICO, IEO and STO) so they create a value to be traded and exchanged against Bitcoins.

THAT EXACTLY WHAT DOLLAR IS DOING - ITs traded against different currencies of the states (Euros, Franken, Pounds...) and Assets. At least all different currencies in states are ALTCOINS because they depend on the dollar price.

So there are only two currencies in the world which are independent

• DOLLAR
• BITCOIN

Every other so called currency (fiat nd crypto) is no currency its an asset for exchange like gold, silver, diamonds, which also depends on the dollar or bitcoin price. There is no need for Bitcoin to use Dollar as an exchange. The proof comes from my charities in Indonesia and India, where people use Bitcoin against Bitcoins and not to Bitcoin/Dollar but they could if they want so.

If you own Dollar you do not neccessary to exchange in different currencies. You find lists in the internet, where you can pay with your dollars for everything in any state.

So the main difference between bitcoin and altcoins is BTC is independent. And that makes Bitcoin a currency. A hard fork from Bitcoin is until today another Altcoin because its centralized by the issuer who owns the majority of nodes and miners to create his coin. And he decides wether he keeps the system alive or not.

Bitcoin has been grwon and still is growing so its impossible today to get the majority over the control of the network. And so Dollar is. Its impossible to get control over the majority of Dollar.

Will Bitcoin kill the banks and burn down their houses ?

Of course not, because people need an instrument and they are not willed at the moment to take self-resonsibilty over their assets and money. So banks or services from banks called FINTEC. They are not independent from banks because they all need a banking license.

But what we will see even the Dollar goes digital and will be named libra (if accepted by governance it could become fiat in a digital form, depending on dollar

Libra is not a new stand alone currency - it depends on the dollar system ! Like Altcoins on Bitcoin !

In electronic systems we do not need banks controlling the custody and money flow models. Institutes like IRA, SEC, BaFin and Central Banks have been gone with the wind in a few years because their utility is not demanded by anyone in the future becaue dlt (blockain) is doing the job automatically. Like the industrial revolution has done by replacing workers.

SUMMARY

• Bitcoin is Currency
• Dollar is Currency
• Fiat except Dollar is like Altcoins to Bitcoin
• Altcoins are not Currency only called so
• Fiat is not Dollar and no Currency only called so
• Fiat currencies except Dollars are assets
• Altcoins are assets
• Distributed Ledger Technology (dlt) is not blochain only called so
• Blockchain is not Distributed Ledger Technology (dlt)