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Understanding Crypto Currency - Technology Market - Nairaland

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Understanding Crypto Currency by socrotex: 9:29am On Aug 25, 2021


What is cryptocurrency? But before that let’s ask what is currency? And how did we start using it? To the stages, we had to go through to get to cryptocurrencies.

Stage 1, At the beginning when society was in its first stages there was nothing like money, the only way to buy something was to walk up to them and say “I want your horse let me trade you my cat for it” then if they like it they’ll take it and give you there horse, that’s called trading, although it was trading items and livestock this is where the word trading came from, but the issue with that was that even though you might be happy to give up your horse, you might not want a cat (see the problem now?) but that’s where currency came in,

Stage 2, “coins” were made of precious metals like gold and silver, and because of that people just accepted they were worth something, and the reason why not? It was accepted so now it doesn’t matter if you don’t want my cat as long as I have coins we can still trade for your horse, cause even if you don’t have any use for the silver coins because it was a precious metal you’re assured that you can keep the coins and tomorrow give it to someone else and trade it for something else you do want (convenient right? And fun fact; the coins were weighed and measured in pounds and that’s why the British currency is called pounds)

Stage 3, as banks became established and the government had control we realized as long as we had trust in the system we can move away from needing to carrying bulks of precious money and move to something more convenient, paper money, this does the same thing as the bulks of coins but it didn’t really have any value cause it was made of silver or gold, it only had value cause the government says it has, and it’s worth only what the government says its worth, for example, take the British 10-pound note, it’s just a piece of paper (it’s actually made of plastic now like most currencies now cause it’s cheaper for production and more durable) but if you look closely on the note you see at the top where it says that the bank of England will pay whoever has this note 10 pounds, so the note is just a receipt, proof that you own a certain amount of money,


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