A NOVICE CRYPTO PRIMER
Following the Nigeria Crypto ban debate a knowledge deficit becomes abundantly clear -not many people understand what Crypto really is.
(The same old arguments that obtained during the transition from gold standard to Fiat currency are rehashed). 1/
Following the Nigeria Crypto ban debate a knowledge deficit becomes abundantly clear -not many people understand what Crypto really is.
(The same old arguments that obtained during the transition from gold standard to Fiat currency are rehashed). 1/
The foundation of Cryptocurrency or digital currency is blockchain technology which uses distributed public online ledgers based on strong cryptography to secure transactions (think a giant computer database secure to the Nth power and a million times more so than Fiat vaults) 2/
But don’t be confused by all the marvelous complexity and jargon. Just think of it as your company ledger but instead of only your CFO making the journal entries your entire staff members have their own set of keys to make entries. 3/
..(having validated their own records and being entitled to do so) and no single person has the power to change the entries so they’re there (ie persist) for all eternity) 4/
But how is Crypto currency created? Well every Bitcoin (a form of Crypto, there are various Cryptos- Ethereum, Litecoin, etc ) is mined. Mining? Yes. You solve complex cryptographic equations by using your computers which requires a massive amount of power 5/
Your output is added as a transaction block or record to the public ledger (Blockchain remember?).
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Wow! You mine them? Yes. Much better than having your grandpa run a printer and print more and more cash to finance expenditures he cannot afford (giving the hot printing press fancy names like “Quantitative Easing”) which value depreciates the moment you receive it, isn’t it? 7/
The Naira cannot hold its pee. Everyone and their choir singing aunt knows that.
But be kind. It shares this incontinence with its counterparts- other currencies 8/
But be kind. It shares this incontinence with its counterparts- other currencies 8/
The mining process is so unbelievably complex only few tokens or coins are available so people trade the limited quantities available (just like people trade stocks but no one calls stock traders evil speculators, well, maybe only those of us who do not have blood red Lambos). 9/
You’re a busy person, so
just remember these two principles of political economy.
I) 4 properties make a medium of exchange:
a) Durable
b) Fungible
c) Divisible
d) Portable
II) Fiat currency is a product of the nation state.
Massive egos are involved.
That’s it. 10/END
just remember these two principles of political economy.
I) 4 properties make a medium of exchange:
a) Durable
b) Fungible
c) Divisible
d) Portable
II) Fiat currency is a product of the nation state.
Massive egos are involved.
That’s it. 10/END
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