Wisdom is worth far more than money, King Solomon tells us in his Proverbs. And throughout the Bible – and human history – money has been the cornerstone and the unchanging reference point used by nearly every society. Now, though, the strong showing of the Bitcoin and other digital currencies in the world’s money markets is stirring new discussion about what money is, and what it does.
As economists and financial experts speculate that the Bitcoin might become a true global currency that challenges all other existing ones, and Christian scholars point to it as the one world currency mentioned in the prophecies of the Book of Revelations, one thing is clear: the Bitcoin has clout. And it’s a serious player on the world monetary stage.
We’ve been tracking the Bitcoin’s progress in this space for some time, and the coin’s journey toward respectability hasn’t always been smooth. That has led to speculation that either it would become the coin of global cybercrime, or it would be shut down by a number of organizations threatened by its anonymity and independence from conventional banking practices.
Whether those things will happen remains to be seen. But whatever the future holds, the Bitcoin – and some of its lesser known competitors such as the Litecoin and Feathercoin — have changed the way we think about money: what it means, where it comes from, and how it’s used.
Currency can really be anything that a society agrees upon as a unit of exchange, whether that society is a remote tribe, a large country, or a smallish band of tech-savvy innovators. Currency is a commodity, and in our days of highly institutionalized governments and banking entities, it’s usually backed by a government’s reserves.
That means currencies can fluctuate in value as economic conditions change at home and abroad, allowing “strong” currency to be worth more and “weak” currency to be worth less – hence the constantly updated currency exchanges that allow investors to speculate in monies as well as other investments. And, when currency is backed by tangibles such as gold, the market value of those assets also plays a part in keeping a country’s currency weak or strong.
By that standard, digital currency is pretty strong, at a thousand dollars to one. And as we’ve reported before, it’s not subject to those market fluctuations that make other kinds of currency swing up or down. For those reasons, and in spite of the downsides, digital currencies hold a lot of appeal in an increasingly tech-oriented world.
Dire predictions notwithstanding, digital money is clearly here to stay – and ready to take its place with other currencies on the world stage. And as Jason Hartman says, investors hoping to build wealth with income property need to stay alert and informed about the that changing landscape of money. (Top image: Flickr/imagesofmoney)
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