Bitcoins And Unusual Hats Case Study

If our credit system is already ones and zeros, but unreliable and confusing ones and zeros after years of tinkering and turmoil, why not design a new currency will all of the benefits but none of the ‘baggage’ that the credit systems imposed on us today. And maybe, just maybe the willingness to change has stemmed from the economic crises that have affected so much of the world – like Cyprus or Greece as well as a growing distrust of government bodies to maintain a stable currency. Or there could just be a small chance that new found currencies are actually catching on, and gaining popularity on a massive scale. And even if it is just a knee jerk reaction to the economic crisis we’re facing – Bitcoins and Unusual hats seem to work, and seem to solve so many problems that are faced by the typical currencies today.

What is Money?

To understand whether Bitcoin and Unusual hats are changing the future of currency, we firstly need to look at what money is, as only when we understand what money is, and how it works can we determine their effectiveness as future forms of currency.

Money can be simply described as any medium of exchange that is that is widely accepted between people; that make it easier to pay for goods and services as well as the repayment of debt (CGPGrey, 2011). But ultimately – all forms of money fall into two main categories items of intrinsic value, and widely accepted forms of tokens that are tradable between people.

These tokens are representative of another commodity that we all have, but are unable to trade between people – time. For every good or service that is available, we have two options for their means of gain. We can either invest our own time in the production and development of a good or service, or...

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...ge, Bitcoins would be ‘minted’ so fast that they would begin to lose their value and would no longer be effective as a form of currency.

Hyperinflation within the Bitcoin Economy

This problem of printing so much money so fast, causing it to lose its value is akin to the economic problems that Zimbabwe faced, when they started printing so much money that they had to print 1,000,000 Zimbabwean dollar notes (pictured left). This led to hyperinflation, and as dictated from the Zimbabwe Dollars webpage,” At the peak of Zimbabwe's inflation in November 2008, real prices doubled every 24 hours. A pencil, which might have cost one cent on November 1st, would have cost $10.7 million by November 30th” (Zimbabwe Dollars, 2011). Confidence and stability are required in the economy, if Bitcoins are the future of currency – something problems like hyperinflation will not induce.