Currency and the stages of money development
Where currency and money are known as a form of money and trade exchange, it is also considered the main source of business and is the approved means for obtaining economic goods and services. Most economists agree on the definition of money as everything that has general acceptance and is used as a medium of exchange, a measure of value, a warehouse, wealth, and a measure of the value of future payments. Here, two basic conditions must be met in order to say something that is his work, which is general acceptance and use as a medium of exchange
Stages of development of money and transactions:
Barter is an in-kind exchange of goods and services between societies and is commensurate with societies in the past. It includes the concept of specialization and division of roles. Barter is one of the first walls of exchange, and it may be direct with the aim of consumption or indirectly with the aim of completing another restricted process, but several problems appeared in this system that led to dealing with gold and the most important of those Problems The difficulty of compatibility between the desires of individuals The inability of some commodities to be divided and the multiplicity of exchange rates The difficulty of completing future payments and thus appears the flower of dealing with gold, i.e. exchanging a commodity and taking
The equivalent of gold, but many problems appeared in this system, namely the endowment apartments of gold, and the bearer was exposed to theft operations, and from here the banks were established and paper money was born, where the bank keeps a reserve of gold with it and issues a number of coins in gold, then electronic money or plastic appeared Cash or MasterCard has become the holder of cash. They put money at banks and put it in an electronic payment or credit card to deal with it. With the emergence of the problem of inflation, forgery and other problems, encrypted digital currencies have appeared to contribute to solving these problems and based on this and with the technological development that no one can stand in front of. There are cryptocurrencies that are considered the natural evolution of money
The second requirement: What are digital currencies?
Digital currencies are virtual currencies that take the form of tokens, and while some encrypted digital currencies have invaded the physical world with credit cards or other projects, they are still intangible digital on the Internet and designed digital currencies Bitcoin is far from government intervention, meaning that it is decentralized despite the popularity gained It has a lot of benefit from it, but it may be subjected to criticism because of the foundational aspect of the industry. Bitcoin is known as the first digital currency that appeared in 2008, but history mentions more reasons and details, as there were previous attempts in the nineties to create currencies via the Internet through encryption that are Bit-gold and B-money that have been formulated but not fully developed.
Digital currencies appeared to address the problems found in fiat currencies such as:
Inflation, which increases every day as a result of the large number of paper currencies in the hands of individuals, which causes an increase in prices, and the purchasing power of paper currency decreases. In 2008, a financial crisis occurred as a result of high inflation rates due to the increase in the number of dollars printed in the hands of people and thus an increase in prices as a result of the increase in demand for Commodities and consequently inflation, so Bitcoin appeared to address this problem as being limited to only 21 million units according to what was stated in its protocol, and the process of Bitcoin production is carried out in an organized and systematic way
Forgery, which has been evident in recent times, such as counterfeiting the dollar, the Egyptian pound and other paper currencies, so digital currencies came to address this problem as it is based on encryption technology where it cannot be forged
Digital currencies give financial freedom to individuals over their assets without banks controlling their transactions and transfers
Hence, he should move to talk about the mother of digital currencies, which is Bitcoin, and its derivative currency, which is Bitcoin Volt, as a result of the fourk operations, and to identify the problems that they solve and how to benefit from this wealth. It should be noted that the researcher writes this study for the purpose of awareness, science and knowledge based on his field of specialization and not promoting the purchase coins.
It is the mother of digital currencies that appeared in 2008 by a person who calls himself Satoshi Nakamoto, and this name is still a mystery to this day. Its first age was launched in 2009 and was dealt with in 2010, where its price was about 25 cents in that period and it was the first purchase On Monday, the equivalent of 10,000 bitcoins instead of 25 dollars, and from here, the bitcoin began to meet the conditions of the real currency, and it is used as a medium of exchange and acceptance for a year. Germany recognized bitcoin in 2014 and many countries followed suit, where out of the number of countries that it deals with now, more than 26 countries worldwide such as Japan, China, Korea, etc.
The price of Bitcoin has now reached about $ 19,000 at the time of writing this study. In the price of Bitcoin, the market is determined by supply and demand, if true. The higher the demand, the higher the price. And if the demand said all the price offered in it, which is only 21 million, he took revenge on them about 18 and a half million at the time of writing the research request. They are the main determinant of the price, and the Bitcoin process is produced through processes called mining, which we will discuss in detail in the next summary. The number of digital currencies is now more than 7000 digital currencies around the world, such as Bitcoin, Bitcoin Volt, Ethereum, Ripple and others.
A decentralized and encrypted digital currency that appeared in 2019 has the same characteristics as Bitcoin and is limited to 21 million in its protocol like Bitcoin. About 9 and a half million of this amount were produced. At the time of writing the research, its price reached 480 dollars last August as a result of several factors, and its price has now fallen to 65 dollars. Writing the research, so individuals work to store the largest amount of it before increasing its expected price.
Since it is a digital currency, it solves the problems found in paper currencies, but the feature that distinguishes it from others is technology
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