Three Reasons for the Rise of Bitcoin: Trust, Trust and Trust

Posted on January 6, 2021January 7, 2021 by Ana Nives Radovic

Now the price of bitcoin is $34,974. Two years ago it was ten times cheaper, and five or six years ago one could buy it for a few hundred euros, no matter how much its value varied and 11 years ago you could buy 1,250 of them for just one dollar. You might ask who knew that they should buy it then and wait for today… The answer is: Nobody.

Bitcoin was created on January 3, 2009 with the intention to become a digital currency that is not under control of banks, nor part of the financial system that only a few months before that caused the whole world countless problems that many needed a decade to recover. Created in response to harsh banking practices, many initially viewed it with disbelief and suspicion… Now they regret it.

Unlike currencies that are regulated by central banks as the official means of payment, the value of the digital currency bitcoin is not controlled by any institution, but by the relationship between supply and demand, i.e. the price that customers are willing to pay. Therefore, the market principle, i.e. the higher the demand – the higher the price – is the only that affects the change in value, given that the level of supply cannot increase ever.

There are countless reasons for the increase of the demand, as when it comes to anything else, the most common cause is the relocation of capital from anything that does not work reliably at a given time, which is especially clear in these times of global economic turmoil – crises and trade wars, due to which many give up trading currency pairs, gold, oil, etc.

Contrary to the monetary policy of countries that are focused on currencies and are subject to political and economic development, the ecosystem within which bitcoin operates is a fully decentralized monetary system in which no central government manages the monetary structure. Therefore, the exchange of bitcoin takes place in accordance with precise rules and according to a strict protocol. This process takes place on a blockchain network, and all transactions on it are intangible and encrypted.

The reason for the price change

The price of bitcoin varies because, compared to other cryptocurrencies, it includes the largest volume of transactions, but its market is still relatively small compared to the markets of currencies or commodities and the value is exposed to greater fluctuations. When it comes to supply, it is limited to the initially issued 21 million units, which is why demand follows its deflationary movement in order to maintain price stability.

In addition to this, the level of demand is also affected by events that improve or damage its reputation. For example, during the first wave of its more intense growth, when its value increased from $50 to $250 in a few months and exceeded $1,000 six months later, some of the world’s largest banks spoke of it as a “bubble,” a risky phenomenon, saying that all those who invest will soon regret it. Meanwhile, electronic money such as Onecoin has emerged, which was one of the biggest scams when it comes to digital money because it was based on a pyramid scheme, but its promoters identified it with bitcoin, confusing the audience and causing the loss of value, due to the luck of trust.

However, when technology companies began testing the application of the blockchain platform, on which bitcoins run, within their services, they began to offer the possibility of paying this type, and the same banks that initially criticized this phenomenon enabled its exchange for physical money in both direction, there was a return of confidence, which raised its value above the new psychologically significant goal of $10,000. In the meantime, the oscillations continued in accordance with a series of market and political-economic events, where the largest role was played by the relations between the USA and China, including all political decisions that change the course of their economic cooperation.

Old users, new users…

In times of crisis, it has become most noticeable how much the value is actually conditioned by the perception of investors: someone will buy bitcoin, so he or she believes that the price will rise in the near or distant future. The reasons for the fall in prices range from failure to use technology designed to be the part of this process, through political pressures to regulate it, as part of the agenda of some governments, to the spread of misinformation placed by many media and public figures in the last decade. Decisions of governments, cities and other public entities do not have to be repressive, they may also stimulate bitcoin payments through infrastructure improvements or tax-free transactions. For example, if you enable bitcoin payments on a certain destination, the news spreads as very interesting, achieving two goals – a good way of promotion and attracting investors. Some will use bitcoin to buy museum tickets, others will start a business in an environment as such.

Unlike the trend that was common when bitcoin has just been created, the majority of today’s owners are not only enthusiasts who buy it to pay for a video game, students and, in general, the younger population of lower purchasing power, as it is now owned also by wealthy investors who have the opportunity to spend money in this way. An example that might illustrate former spirit of buying bitcoin, that shows how much everything has changed so far is the event in May 2010 when one owner of a larger quantity of bitcoin decided to order two pizzas in a restaurant in Florida that offered charging in this digital currency. Bitcoin was so cheap at the time that he paid the $25 bill, with 10,000 digital coins, whose dollar equivalent then totaled $41, giving the “tip”.

One may wonder how much the wealth of those who then bought about 400 bitcoins for one dollar was worth today. If there are still such examples then they are extremely rare, because the only thing that could make you wouldn’t decide to sell your coins for so long is to forget the password or have the device on which you installed your e-wallet unavailable for so long and functional all the time. Many sold it when the price rose from $250 to $1,000 in less than a year, convinced that they had made a perfect decision, as it seemed so. The previous year has shown how dynamically the price of this cryptocurrency can rise in situations when people around the world are losing confidence in other market assets where the value collapsed quickly due to the pandemic. First, the consequences of the crisis were very visible, and then trust was renewed, especially in the last quarter of 2020.

Impact of the COVID-19 crisis

After reaching the $19,000 threshold in 2017, the global climate was not particularly favorable to investing in bitcoin, because after the last recovery of almost all major markets from the effects of the global economic crisis at the end of the first decade of this century, the world finally turned to more relaxed spending. The previous year completely reversed the perception of spending and savings, so the world went back to bitcoin again.

More dynamic value growth began in October 2020 when online payment service PayPal announced it would integrate bitcoin and other cryptocurrencies so that they could be used in transactions, first in the US and then in the European market this year. It is a company with more than 360 million users worldwide, who will have the opportunity to have cryptocurrencies in their PayPal e-wallets. This has greatly helped the public to become familiar with the characteristics and role of bitcoin, as PayPal’s announcement actually illustrated how bitcoin is used to pay, not just to make money on the value change.

On the other hand, when they realized that it would be necessary to address the economic consequences of the pandemic, the European Central Bank, the Bank of England and the Federal Reserve began a new phase of expansionary policy that pushed very low interest rates to even lower or they even became negative. This meant that investors would have to discover that part of the usual investment activities would not only be unprofitable, but create an additional cost, which made it necessary to move capital to what would at least temporarily keep its value.

The best is yet to come

All this is just the beginning of a significant interest in bitcoin from the general public, as traditional investors will only start moving their capital into this area in the way they used to reallocate it in gold. After the expansionary policy of central banks was added to the effect created by PayPal in this market, any possibility of returning to the traditional market of government bonds or fixed income assets was literally erased.

In other words, the entry of such investors into bitcoin trading has enabled it to be not only a way to make money on the price difference, but also an instrument for medium or long-term storage of value. The policies of the leading central banks to be implemented this year will make the currencies they manage worth less in order to stimulate exports. In such conditions, anyone who has more capital does not want to keep it in one of the currencies whose value will fall, therefore they relocate it to a safe haven, as gold used to be, in something that will bring additional earning opportunities.

The question that arises is what would happen if all the capital that turns into bitcoin today was abruptly withdrawn towards some other forms of investment. The probability of such a thing happening is extremely small, because this is the trend that guarantees the growth of the price of bitcoin. Not only will that growth sometimes be slowed down, but it will not be constant either. However, that will not eliminate the possibility of continued growth. Funds drawn from such roles in any existing option could not be regenerated so quickly, which is why such intentions would be lacking, as such moves would be unprofitable until a new fintech revolution occurs in the market, and this has only just begun.

31. Currency Wars Due to Introducing Monetary Incentives through Money Printing

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

Beyond the hesitancy of the legislator, the response of the banks to the questioning of their profession is also strongly to be feared. From this standpoint, it might seem that the banks have not yet realized that a peer-to-peer system, the bitcoin is based on, reduces the scope of depository banks since a bitcoin deposit does not exist as such. It is hard to see how the banks could justify their deposit services under Bitcoin.

The ongoing printing of money that occurred in Japan, the United States, and China also happened in the EU, which, in general, created an image of unsustainability, especially in the longer term. The generally accepted opinion is that the global scene today is characterized by currency wars of enormous proportions due to the fact that the United States, followed by Japan and later China, and finally the European Central Bank, began to introduce monetary incentives through additional printing money or programs to purchase bonds that increase the level of available resources but also cause a condition that is unsustainable in the longer term.

While for the economies of these countries, this was a signal that in the future could be a very complex problem, global financial centers have recognized it as a generous source of earnings. Changes in exchange rates were conditioned by political and economic developments in the countries that use them but also moved behind the scenes pulling the leading banks in the world, after which it seemed that once completely reliable guarantor factors are not expected to reverse the trend.

Forex trading, which became increasingly popular over the past decade, has attracted millions of users around the world, contributing to the vertiginous growth of the daily trading volume, a growing number of those who observed the legality of trading and the ability to predict the directions of growth, but also an increasing number of reports that start with the word “despite” and explain a situation in which there was an unexpected change in circumstances.

Since there are logical rules based on which the trends of changes in exchange rates can be predicted to the fifth decimal, but since, at the same time, one may also come up with unexpected shifts in this area, there is only one possible explanation, and that is that there are devices used to manipulate to enable additional income for certain entities. The currency market is huge and it continues to grow, which prevents any intervention, agreements, and coordinated actions of several participants with high stakes, especially so that it reflected at the global level could shake up relations between currencies. This does not mean that some are not able to influence the courses.

The mismatch of the political situation, reports on the economic growth of a country, inflation, employment data, and other parameters with courses of leading world currencies is explained as an outcome of activities performed by the biggest global banks. As one of the key subjects of currency exchange various mechanisms are contributing to the instability of exchange rates, mostly because a huge proportion of them are related to speculative schemes. In such an environment, only about five percent of foreign exchange transactions are related to investment, trade in goods and services that have an impact on the real economy, as well as remittances from inhabitants from abroad, while the rest of the leading banks in the world belong to the segment from which derive key sources of funding and the duration of, or in the currency exchange and the commission that thanks to the exercise.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

30. Defining the Level of Sovereignty in Comparison with the Position of Leading Central Banks

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

One of the biggest threats in today’s economy is deflation. When prices are falling steadily, consumers and businesses are less inclined to spend and invest. Also, the weight of debts automatically increases as they do not degenerate with prices. In particular, central banks target an inflation rate of more than 0 percent to 2 percent to reduce the risk of deflation. If the inflation rate is excessively low, interest rates are lowered, and the money supply is increased.

By observing the data related to global economic growth and policies of leading central banks in the world, it can be noted that since 2014, there have been billions of share repurchases. At the same time, a huge amount of money was spent to lift up prices of corporate shares from the companies themselves. The reason for governments to borrow was to cover their operating costs, while companies borrowed to increase and develop new segments, as well as to buy their shares, making up the prices. However, none of them was able to follow the rule of selling or buying at the lowest or highest, since during the crises, corporations took advantage of such a chance to buy back their own shares at reduced prices. Now that these prices are high again, they give the impression that almost everyone wants to buy, even though it must surely end. It is easier than ever to predict what will happen when stock prices collapse.

Since the global financial crisis emerged in 2008, a real war against savers has begun to lower interest rates and consequently the recompense of savings. This is followed by the lower refinancing rate almost zero level and Quantitative Easing programs. The increase in liquidity caused by quantitative easing programs does not wash out the real economy but is largely directed toward the financial sectors. The accumulation of public debts has reached such a level that monetary policies will have to transform, and inflation will make its return with its instructive dislocations, unemployment, and various types of injustices.

Measures that the leading central banks have applied to trace the path to economic recovery, combined with tighter regulations and heavier taxation, have led to an end of private investment and a deflationary spiral. In this situation, it became very obvious that currencies, especially those that are under the control of the leading central banks, are not only an expression of the value of commodities like the indicator, but they also serve as a connection between the present and the future. Price stability, which describes the situation where price fluctuations are very low or do not exist, does not concern the decisions of economic subjects, as they are standardized across all economic areas. On the other hand, the behavior of economic subjects, responsive to inflation or deflation, influences the development of inflation. Individuals try to preserve their real cash balances because they are not fooled by the monetary illusion created by inflation, and they require the maintenance of their purchasing power in real terms.

It is difficult to envisage that virtual currency, without the assistance of a government, without regulatory mechanisms, and likely to cause unstable inflation, may one day be used on a large scale. A strapping regulatory framework would also be required to guarantee that different users are not harmed. If account, exchange, and transaction costs are low with cryptocurrencies, it is notable because there is no protective covering and recourse in case of prejudice to the users. In the traditional monetary system, several components work to protect the citizens, but these structures have a cost, where deposit protection is a good example. Regulatory requirements are increasing according to the use of the currency to cover the new risks that appear. The Bitcoin network allows the currency to change owner but does not allow lending funds.

It seems that the method of the spread of monetary policy is not working or is at least detained. The spread means that the effects of changes in the key rate have a collision on the economy as a whole, down to the rate of inflation, which can be explained by the caution of banks to lend to the private sector as a result of recent stress tests and the rules set during 2010. Therefore, explaining the meaning and the purpose of the digital currency has led to defining its level of sovereignty in comparison with the existing monetary system or the position of leading central banks, where many people think that a country is sovereign and that if it has contracted a debt in a currency, it is free to reimburse it in another country it chooses.

All of these show that the users are hence reliant on its volatility, which is the spot on which bitcoin enthusiasts must not fail to turn down any liability, clearing up that the rate of conversion of regular money into bitcoin may be dissimilar from what is relevant when we convert bitcoin into regular money. This does not mean that one might require a bitcoin address to send money since an email or a phone number is enough. However, if the beneficiary does not have a digital wallet in some of the major supported currencies, they will receive bitcoins that could be exchanged on other platforms.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

29. Formation of a Private Blockchain Explains Optimizing the Reconciliation Procedures between Financial Institutions

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

The usage of blockchain in the financial sector could revolutionize the situation fundamentally by reducing the significant complexity of the reconciliation processes. This platform intends to make this process straightforward by performing only one computation and submitting a harmonized representation to the stakeholders, consequently eliminating dissimilarities in theory.

To make this transformation take place, a greater part of mining instruments will fall behind the idea that it should correspond to three-quarters of the computing power of the network for two weeks to reveal that it runs the engine correctly and can consequently enforce this new standard reasonably. Experiencing any kind of bugs at this time will lead to solving problems at the earliest stage to prevent any risky situation before broader implementation.

It would be too optimistic and even unreal to expect that this technology could transform the payment industry in the next several years since the current technological usage is not tailored to the performance of mass payment resources that require short-time responses, as is the case with payment cards.

The formation of a private blockchain, shared with the smart contract tools, comes out to be the ultimate explanation to optimizing the reconciliation procedures between financial institutions at the same time as lasting visible to the supervisory body. In any type of transaction service, this is supposed to ease the automatic transmission of verified information, while automating the confirmation procedures and definite supervision, and that is the reason why these segments would take advantage to a great extent of optimization, effectiveness, and protection.

The creation of new units of account for most cryptocurrencies that operate on the blockchain platform is programmed once and for all by an intangible algorithm, without the possibility of modification if not by a majority decision of its users. In that regard, new units in the bitcoin system are created every ten minutes as compensation for the formation of blocks by miners and only in that way.

Initially fixed at 50 bitcoins per block, it is currently 25 bitcoins, i.e. a growth of the money supply in bitcoins in the order of 10 percent per year. This fee will be divided by two every four years, implying a limit of 21 million, which will be reached around 2140, though 99 percent of this limit will have been reached by 2032. Bitcoin is ultimately an intrinsically deflationary currency whose value is destined to grow over time, giving it a competitive advantage as a store of value. The very low transaction fees explain the emergence of a third demand factor for bitcoins as a means of payment.

Some online vendors, more particularly specialized in the provision of Internet services and the online sale of rather exotic items, now accept to be paid in bitcoins, due in particular to the almost total guarantees of anonymity associated with them. The latter factor of increasing demand for bitcoins is still in its infancy, if only because at present only a very small number of items can be paid for in bitcoins, and most sellers continue to display their prices in dollars, euros, and other currencies.

The battle between customary payment systems and peer-to-peer payment systems, and therefore between state currencies and cryptocurrencies, is likely to be the subject of regulation. In the camp of bitcoin and its derivatives, two positions are already taking configuration. The first, faithful to the purpose of the existent promoters, is to fight frontally against attempts at state control, to further modify the anonymity, invulnerability, and closed nature of the system, even if it is at the cost of less user-friendliness and increased consumption of resources.

This trend is illustrated, for example, by Darkcoin or the analogous Zerocoin project, which aims at complete anonymity of transactions. The other more conciliatory trend is alternatively to seek reputability by respecting the regulatory constraints and by giving the operators the means to satisfy them in the role they have chosen. This is the beginning of a division from which two managers of systems appear, where the biggest part of users choose to be in good standing with the authorities rather than defending central orientation.

It can hence be expected that a vast majority of users will select as the reserve currency one of which they are sure that the value will not decrease over time, with bitcoin being a good candidate. Others will favor currencies standing on a material asset such as gold or currency guaranteed by the state, but in any case, it is a subjective persuasion about the promise made by the money establishment.

It should be noted that the mere coexistence of several currencies is a protection of the public against the loss of value or the disappearance of one of them. At the first sign of depreciation of a currency, users could convert their assets into a safer one, which would certainly accelerate the decline of the fragile currency but prevent it from ruin. The position of each of the money issuers would, therefore, be delicate. They should be vigilant and quick to respond to the first signs of depreciation, but the numerousness of issuers would limit the effect of the bankruptcy of one of them, and the system as a whole would be robust.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

21. The Exchange Rate Fundamentally Depends on the Balance of Payments

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

Electronic money maintains a strong connection with traditional money, as both are articulated in the same unit of account and are pledged on an asset. In contrast, Bitcoin relies solely on an agreement between its users, without a legal framework drawn up by any centralized body.

Furthermore, its users are the sole players in the virtual currency, creating a situation that is the opposite of traditional currencies. In this case, it is informal, challenging the formal structure of central banks. It’s noteworthy that this type of currency is not subject to any financial institution. Financial institutions are expected to act as intermediaries in information gathering, risk management, and liquidity. It is highly unlikely that this type of currency will fit into this traditional financial circuit.

This economic perspective examines a new phenomenon in the world of money, that of digital currencies such as Bitcoin. The use of these currencies, for the time being, remains very marginal and limited to basic transactions. However, some see a much greater potential and invest heavily in them. In our system, a boost in the exchange rate means that the currency appreciates. Evidently, exchange rate convenience should also be assessed in relation to inflation. If the exchange rate rises, but prices in the other country have also risen, it may be that the overseas purchasing power of our currency remains unchanged or even worse, which is the situation with the actual exchange rate.

Since the relationship of trust requires at least two individuals, and with currencies where the sender is not known, it is a safe bet that one is closer to money laundering than to procedural confidence based just on the currency itself. However, a huge gap separates them from fiat currencies because they are not supported by governments and central banks. The absence of a regulatory framework and regulatory mechanisms is very challenging, and individuals interested in purchasing these new currencies must, for that reason, remain careful and be aware of the inherent risks.

The exchange rate is determined by the acquisition of demand and supply of currency in the foreign exchange market, called Forex. The demand and offer of a currency are due to the exchange rate from a foreign currency to international trade. In this regard, there is an expectation that Bitcoin would evolve in a way that allows users to determine an exchange rate and truly be a currency, even though traditional currencies serve the three functions. In that regard, there is confidence in the unit of account, a value and savings reserve, and a protocol instrument.

While considering this, it should be noted that the price of Bitcoin is very volatile. When comparing this component with fiat currencies, it is the stability of exchange and inflation rate that generates confidence among investors. Additionally, with no intermediary financial mediations, this function is not sufficiently respected because of the lack of guarantee of deposits. This raises the question of whether it is reasonable to consider Bitcoin or any other cryptocurrency a safe haven, as there is no guarantee for its value. However, regardless of the smaller volatility of other currencies and commodities, the level of safety of transactions is higher than within traditional monetary transactions.

The exchange rate fundamentally depends on the balance of payments of a country, and primarily derives from two key factors: trade and financial investments. In the first case, it encompasses imports and exports of goods, including tourism from one country to another. Regarding the latter, it involves activities such as the purchase of foreign treasury bills, as this amount of exchange is linked principally to the level of interest rates that engage capital for good returns.

An aggregation of cryptocurrencies was established in the channel of Bitcoin, but the major principles remain the same. The creators of other cryptocurrencies tend to advocate the fact that their network is less inconvenient to support, transactions are done much faster, and the reward in terms of new currencies created is more beneficial. Some count on a faster or longer expansion of the money supply, though in that case, the difference has no effect on the purchasing power at the certain moment regarding these cryptocurrencies. Even riskier exchange rate transactions, such as currency purchase and sale transactions with the aspiration only to make a profit from the change in exchange rates over time, affect the value. Depending on the situation, monetary authorities may choose to let the exchange rate openly follow the forces of demand and supply, or they may prefer not to diverge from a certain value.

It should be noted that cryptocurrencies are one of the main restraints in the fight against piracy. To overcome the financing of pirate sites, corporations have signed agreements with electronic payment companies, such as Visa, MasterCard, American Express, PayPal, and Skrill, to ensure that illegal actions cannot be financed. This is declared through agreements between monetary authorities that advance the international monetary system.

Regarding this, the real problem is more in the misgiving of a particular currency, especially in those that lose the status of a safe haven they used to have, than in confidence in cryptocurrencies. This is evidenced by the increasing download of Bitcoin, returning the problem to national currencies and their particular monetary systems and central bank policies. Unlike Bitcoin, the derivation of national currencies is centralized, and in most countries, this role rests with a central bank.

The growth of the amount of assets is not fixed, so the choice to increase or decrease the supply of money depends on the objectives traced by the entity that issues money. In this area, traditional currencies have several advantages, since a banknote is not decomposable by itself. However, a central bank system favors inflation over the long term, continually degrading the value of the state currency.

There could be some doubts regarding the ability of central banks to make good decisions, as in most industrialized countries, central banks maintain a low and stable rate of inflation, ensuring the maintenance of the value of the currency. It must be admitted that this system works very well when one looks at the low-price increase over the past two decades.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

19. Value Justified by Usefulness and Scarcity

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

Central banks are able to influence the foundation of money throughout the refinancing rate, but also by calling commercial banks to place an assured number of deposits accumulated from the community on the account that banks of the central bank in forms of reserves.

For example, the European Central Bank is autonomous of the countries from which, according to the Treaties of the EU, it cannot even receive simple advice. This is what is called the independent central bank’s doctrine. Banknotes issued by the ECB and the national central banks are the only banknotes with legal fond in the European Union. Central banks worldwide use these operations to carry out mandates reflecting economic objectives for the central financial institution.

For example, the ECB has the main goal of maintaining the inflation rate close to 2% on an annual basis through the most favorable distribution of resources and growth, while the aim of the Federal Reserve in the US is to have reasonable inflation targets to support growth and employment rates. The autonomy of these financial institutions is also supposed to ensure avoiding the infidelity of political assessment to give attention to producing a conventional and coherent economic framework, according to the formula that favors rules over the discretion right to take some action. In this framework, a variety of constraints imposed by the traditional monetary foundation path may come into view as a commotion, which explains why even financial institutions are trying to test alternative models of money creation, as well as new means of payment.

A sharp growth in the price of bitcoin from the beginning of 2017 indicates that interest in bitcoin constantly increases. It is often emphasized that the uneven changes in the value of bitcoins on a daily, weekly, or monthly basis are not conditioned by guaranteeing profits to investors, as is the case with global currencies, precious metals, oil, or any other stock exchange goods whose change, except for the level of supply and demand, is dictated by economic and political developments in the countries that use them as a means of payment or trade them. The majority of those investors point out that bitcoin does not have value, stating it to deter investment in cryptocurrencies.

The incorrectness of this assertion is quite easy to prove. Although there is no equal sign between value and price, the fact that one purchases bitcoin for an amount of assets denies this claim itself. What further points to the steady value of cryptocurrencies is that even if the market turmoil and efforts of financial centers to destroy its price were so low that there would be no denomination banknotes, world currency, which could be made without a decimal number, and its value would still exist. This is confirmed by two factors, where the first one is usefulness, and the second one is scarcity. If we illustrate this using the example of clean air, we will understand that it has value because it is useful, although it is abundant, which is why it does not pay. However, if, due to any pollution, it was preserved only in separate rooms, its price would depend on the willingness to pay to join those who want to breathe through their lungs.

As the most significant digital currency, bitcoin, since its very first days, has been compared with national currencies, although it works on completely different principles. Several things that bitcoin and national currencies have in common are not a typical cross-section for only these two categories but for anything that exists on any type of market, where its value has the possibility of being changed.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

18. A Great Turnaround in the Financial World

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

One of the main reasons why Bitcoin was created is the dissatisfaction and distrust in the existing financial system where monetary creation is principally offered by commercial banks in their lending business. Accepting their disposal means of payment against the institution that declares these agents, credit bodies, generate new liquidity in accordance with the requirements of the financial system and market as a whole. One of the most important purposes of each central bank is to control the inflation rate, while make the circulation of money easier and helping investments to expand.

Quite the opposite, deflation is seen as a risk by economists because money creation accompanies growth. The total fixed volume of 21 million was the main reason why Bitcoin was subjected to criticism. In fact, this ceiling reflects its creators’ doubt of the quantitative easing programs that the central financial institution of the United States, the Federal Reserve, started to practice after 2008. However, this restraint also leads the Bitcoin system to have a potential deflationary outcome.

The times after the world economic crisis were characterized by a strong expansion of investment that aggregated the need for a higher level of security of transactions between agents. On the other hand, the crisis generally led to a retrenchment of credit activities because consumers cut their expenditures and real estate buying, while the business sector postponed their investments by choosing to set out of their supplies. Since banking is not automatically balanced on a day-to-day basis, a particular money market was created where banks lend to each other to resolve the problem of a lack of short-term liquidity. They can also call the central bank, which embraces the advantage of money creation and establishes the monetary base by issuing banknotes to grant liquidity to commercial banks, guaranteeing price stability and promoting the security and effectiveness of the payment system.

The possibility for these banks to be refinanced via the mechanisms that institutions of the countries where they operate have established opportunities to manipulate the activities in order to create the need for monetary creation, as commercial banks pay a price for liquidity supply. Central banks could thus buy or extract a repurchase of particular financial securities held by commercial banks against the provision of liquidity.

Bitcoin came into the primary focus of global media when the financial crisis in Cyprus occurred and caused one of the biggest concerns about the future of the European single currency. Worries about the future of the euro caused Bitcoin to triple its value in less than a month, reaching the price of $141 for the first time in the first days of April 2013. This was one of the most visible examples of how a search for an alternative is shifting the demand of investors who are willing to take new market challenges, looking for more security at the same time.

The fact that the financial world has been witnessing a great turnaround, which was at that time largely represented the exception, not the rule, has led to the occurrence of Bitcoin being backed with fierce confrontation. This type of confrontation was seen because the unpredictability of Bitcoin’s price can be reviewed as a lack of knowledge about the questionable reliability of decentralized governance. It is difficult to rely solely on efficient credit control without the support of the governmental plan and central banks’ monetary policies. Numerous studies on the supremacy of common goods, open-source assumptions, and a certain sort of what some called digital collectivism have shown that the fact that this group of enthusiasts has no centralized organizational control does not necessarily mean that the whole system is expected to be reduced to disorder.

The refinancing rates that act as the prices at which central banks allow the credit money usage represent the main structure of the money market, and when those rates are high, the demand for liquidity by the banks is low. This reflects on the interest rates of the credits that banks offer to their clients, creating a liquidity shortage since many individuals or businesses are not able to have access to this money. This causes dissatisfaction, as the trend is present everywhere, and not a single bank can offer something that differentiates completely from the rest of the financial sector. In those terms, having a decentralized system is something that causes Bitcoin’s key advantage, regardless of how exposed this cryptocurrency is to peripheral shocks because of the lack of a centralized regulation system.

Particular occurrences, such as cyber-attacks, errors in cryptograms, regulatory transformations, transaction volumes, and dysfunctions of keys, may have an impact on the value of Bitcoin. Though the margin of arbitrage gives rise to financial assumptions, which additionally makes the circumstances more complex, and therefore Bitcoin cannot serve as a means to determine value, which, on the other hand, is a crucial characteristic of traditional money.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

17. The Impact of the Virtual Money Mechanisms on Total Cash Flow

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

Currency wars are one of the reasons why the capital of many subjects directed towards investment in those assets in which the chances of manipulation kept to a minimum. Through a review of the relationship of trust in cryptocurrencies, as well as trust in institutions in this work is estimated what impact will the mechanisms on which is based the virtual money have on total cash flow in the future and what kind of perspective of bitcoin and other cryptocurrencies.

The electronic currency bitcoin is gaining popularity, although for a long time, most economists around the world did not give it importance until its value started its dizzying growth. There are three key reasons why bitcoin gained popularity in a short period: 1) simplicity in transferring value; 2) the ability to perform microtransactions; and 3) growing trust in decentralized systems.

Simplicity in transferring value was recognized as one of the main achievements of digital money. In the history of human relations, changes in the way of material exchange determined the transition to a new level of civilization. After the multifaceted exchange of goods for goods became more orderly with the emergence of certain units of measure of equal value, there was a need for such a system to be simplified to provide more precision and clarity among trading parties.

Also, since goods were often perishable, it was necessary to establish what could be a value guard. Due to its limitations, the price and scarcity of gold could not play this role for a long time, resulting in the emergence of money for the development of the culture of Phoenicians, where all goods could be paid. As with most types of money, bitcoin, as digital money, is also characterized by the change in its value.

The value of bitcoin changes on a daily and even hourly basis. However, the advantage of bitcoin is the possibility to have microtransactions, especially with online payment services that cost less than the smallest unit of a currency.

For example, if a site owner wants to charge for access to content, counting on the number of visits, it is much easier to calculate these values in bitcoin than in traditional money, especially for services priced at one or two cents. The difference between one and two cents is still double in traditional currencies. With bitcoin, the price may be expressed in as many decimals as necessary to meet the most precise measurements. While these differences may be negligible at the individual level, when multiplied by thousands or millions on a daily or annual basis, the variations in earnings are enormous. Additionally, there are no transaction costs, such as those in electronic banking, to enable intermediary earnings from commissions.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

16. The Need for Encryption Created a New Way of Living

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

The name of the most common cryptocurrency, Bitcoin, also refers to the protocol describing this virtual money and its implementation in the payment system. This cryptocurrency is decentralized and anyone who wishes can join the network by installing the software.

The generally accepted theory regarding the origin and formation of Bitcoin is that it was created in 2009 by one or more crypto programmers using the pseudonym Satoshi Nakamoto, although the preconditions for the development of this technology were created decades ago. The history of work on technology that created the base for cryptocurrency development has a four-decade-long history since the first RSA encryption that used a public key to encrypt confidential data and a private key to decrypt them was used in 1977.

The following years were characterized by the development of the mechanism of compression that was used to securely and efficiently store and verify a large volume of data that is today used by the Bitcoin protocol. At this phase of the late 1970s, the system for calculating all transactions contained in a data block was established. Later in the 1990s, the programming industry witnessed a wide range of research related to cryptographic protocols that represented the foundation for the development of electronic currencies that were centralized and proprietary.

An article written by mathematicians and digital money enthusiasts Stuart Haber and W. Scott Stornetta, entitled “How to Time-stamp a Digital Document,” announced the key principles of what would later be a platform on which Bitcoin works. This article was later quoted by the author signed as Satoshi Nakamoto in his white paper where the principles of blockchain were explained.

A very significant turning point in the development of the transaction protocol occurred in 1994 when a computer engineer and a researcher in cryptography, Nick Szabo, advanced the idea of a “smart contract,” which represented the computer transaction protocol that executes the terms of a contract. During the following decade, Szabo was working on the uprising of the project called BitGold, conceived as a decentralized digital currency based on chains of proofs of application and using countless elements that later were shown as the groundwork of Bitcoin, such as timestamping, digital signatures, and public keys. At the first stage of the development, it proved to be vulnerable to attacks, while later there were many efforts made to overcome this problem.

Later in 1997, the invention of Hashcash by Adam Back represented the proof that this system could work, justifying further research and development in this area. In fact, this idea had already been explored by Cynthia Dwork and Moni Naor in a report entitled “Pricing via Processing or Combating Junk Mail” published in 1993, but Adam Back had no information about their achievements in this area. At that time, Szabo described the possibilities offered by the advance of new technologies in an article entitled “Formalizing and Securing Relationships on Public Networks.” Consequently, many contracts can be implemented without difficulty if the possessions that represent the subject to the contract include a computer code guaranteeing the implementation of the contract provisions.

The next big step was the first peer-to-peer distribution via a transfer platform called Gnutella, developed in 2000 by Tom Pepper and Justin Frankel. From the economic approach, it is a classified currency that is not issued by any banking institution nor linked to a currency settlement. Also, it is not commodity money, nor a fiat currency, given that it has no required price.

However, the development of technology enabled Bitcoin to have particular elements of trading instruments, even though it does not share key characteristics with them. In that sense, there are similarities with fiat currencies although cryptocurrencies are not backed by a material asset, since it has value only because economic actors agree to use it and since the internet makes trade between them achievable. It is more leaning on the monetary exchange function than to that of a store of value, even if its deflationary character can hypothetically lead to it.

The first public announcement of Bitcoin occurred in 2008, opening the space for the first blockchain to be at the beginning of 2009. At that time, a reward for finding a block was 50 bitcoin and is divided by two every 210,000 blocks, which is scheduled to happen every four years. Since December 2012, the return is 25 bitcoin, and according to that division process, the year 2140 will be the one when no return will be provided, while the number of bitcoin will have reached a maximum of 21 million.

The rationalization of the nature of Bitcoin transactions can begin from the straightforward paradigm of the contract of sale. The smart contract would guarantee that when the seller broadcasts their possessions, the other party, in fact, receives the corresponding amount in exchange, and, on the other hand, the buyer who pays the price is guaranteed to receive the goods. In the earliest stage, Bitcoin was created by a closed community of enthusiasts that used it for internal practice. It is likely to state that they were then used for all intents and purposes as elements of an allegation of an identity based on a vision that was contrary to accepted belief of the world in reaction against the establishment.

To illustrate the value of the smart contract mechanism, Szabo used a simple example, a car rental contract. Under this contract, one pays customary sums to use the car owned by a certain rent-a-car company. In this case, the smart contract will routinely test out at each due date whether the amount owed is well paid by the renter of the car.

Provided that the imbursement is made, the renter will be the only individual allowed to use the car thanks to the process of authentication. In the event of non-payment, the car is automatically blocked and cannot be used by the tenant, and the renter regains control. The first order, first to generate bitcoins, then as anticipated, but only at one remove, to seize them, was consequently linked to what they served to demonstrate or transmit a certain way of existence and an assured way of seeing the situation.

Fundamentally, Bitcoin was not very diverse from what one finds in the world of fine arts since, for their enthusiasts, it represented a way of living and demonstrating its distinction

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

15. Overseeing the Ultimate Impact on the Principles of Real Growth

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

There is a belief that negative interest rates only concern banks, which perceive their deposits with the ECB not rewarded but commissioned up to an annual interest rate that is still under zero percent. In reality, there is not a single entity that could borrow from their bank at rates below zero.

Repaying less than the totality of the borrowed capital is not allowed at any point in the financial system. When one borrows 100, one has to pay 100, plus interest, which is the reason why even loans with a reference rate beneath zero do not see their charges decrease.

However, there is another perception of this issue where, instead of seeing interest rates decrease as an instrument that a growing number of central banks use to recover temporary global demand, they consider zero rates, and especially the postponement of the negative interest rate area, not only as the symptom but also the symbol of growth at the level of the world economy with enormous financial and monetary disproportions of unparalleled strength. These imbalances are basically a direct consequence of the regulatory strategy choices made after the economic crisis by the major central banks, initiated by the Fed.

This perception of zero rates comprises the belief that they are not a tool that would appear in the files of the central bankers, but an apprehension sign that indicates that the circumstances, both in developed and in emerging countries, are now reaching an alarming edge that is even more sincere than right before the last financial crash. This viewpoint is followed by an unbending disapproval, even though it was articulated in very cautious standings of the outlines of studies, as well as in contemporary responses of central banks to current issues. The key problem is not whether these reproductions are theoretically acceptable or not but that they have fundamentally been calculated before the actual expansion of globalization. Therefore, their position of accounting remains principally that of state economies, while the actual financial and monetary subjects, even of relatively not large size, are nowadays occupied in a day-to-day situation of interventions without limitations.

Fundamentally, they are not considered to entirely assimilate and account for how international refinancing streams are now taking a key position in the broadcast of financial compulsions, particularly those produced by the decisions of the most important central banks in the world, as is the case with the spread of the bubble economy to emerging countries through the quantitative easing strategy and the extremely threatening counterattack that generates its closure. In fact, they represent primarily temporary reproductions that disregard the central position of what was perceived as standard. More precisely, they lead to not seeing their ultimate impact on the principles of real growth. In that case, a continued practice of the zero-rate policy leads to a progression of misrepresenting inducements that reduce productivity increase.

From this standpoint, each rise in the US inflation rate over the past several years is only a minor feature in comparison to the real intimidation that includes the detonation of global debt, the simplification of policies, the extension of the increase leverage rates, as well as the strengthening of the currency war powered by the development of quantitative easing procedures. There is a common explanation of this situation that refers to the typical connection giving which rates drop or rise in action, bearing in mind an increase in inflation that gives rise to an opposite system with the persistence to accept as true that it is the decrease in the particular rate that will allow inflation to rise. Actually, this leads to the lowest level of the inflation rate with conjunction in the direction of a deflationary negative balance that the central bank wants to evade anyway.

This type of explanation would be connected to the intensification of the scarcity of securities, which appears as an automatic consequence of the crisis, but also because of the quantitative easing policy. It would have the consequence that the actual interest rate of money with fixed yields, which means the one subtracted from the nominal rate of the bond after withdrawing the inflation rate, now includes liquidity, whose outcome, for a given nominal rate goal, is to diverge the interest rate while at the same time the inflation rate moves in the opposite way from this premium change of the value.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

14. ECB’s Policy, Like the Code of Hammurabi, Does Not Abolish, But Just Regulates Slavery

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

The words of the president of the European Central Bank Mario Draghi that have shown his call for insurance on future liquidity made an impact on the price of gold and silver. However, they have also raised many questions regarding the repeating of economic cycles and situations brought through them.

The words of the President of the European Central Bank, Mario Draghi, have shown his call for insurance on future liquidity, making an impact on the prices of gold and silver. However, they have also raised many questions regarding the repetition of economic cycles and the situations brought about by them.

We live in times when entrepreneurs are seeking to finance reasonable projects, while companies with products, customers, and profits are looking for savings to grow. There is still an ongoing process of finding a way to finance these projects of the real economy, garnering capital gains, and collecting interests. It is shown as extremely hard during this type of political control of the central banks that will not change a flawed monetary and financial system due to the lack of discipline. Under pressure from more than 200,000 billion dollars of debt, the announcement of the ECB that it will strengthen control of interest rates could happen very soon.

What the history of finance has shown is that the control of the price of credit by the state, like any control of this kind, will end in disaster. The state does not have to control the currency, the price of credit, or the economy, since the role of the government should be limited to ensuring equal rights between citizens and ensuring that they are respected.

While trying to emerge from unusual monetary policies, numerous examples of panic-driven measures can be seen. The current policies of the ECB do not differ much from what was prescribed in the Code of Hammurabi, turning the king into a god and leaving numerous people in the class of slaves. The difference, however, is that while adjusting the amount of money in current flows, it seems like the ECB does not know what to do with its “Print,” “Rate,” and “Delete” buttons. There is a strong need to make a movement in order to prepare for the end of monetary creation in the euro, but the mechanisms to do so are not in sight.

This reveals another situation of repetition of numerous times viewed situations that led to the same myths. One of them is that public money creates more wealth than private money, which is called the Keynesian multiplier. In this situation, if the government invests one euro, its return on investment will be higher than that of private persons. According to this belief, at the same time, the government is not obliged to forcefully stab taxpayers. It can simply borrow because its return on investment will always be positive. While a wretched single entrepreneur, pursuing his guilty selfish interests, may be mistaken, since the business may go bankrupt when its return on investment appears to be negative. Keynesians define the multiplier coefficient as the ratio between a change in public expenditure and the consequent change in total income. This explanation justifies the stimulus policies financed by the loan.

The ECB still injects 60 billion euros each month into the markets in order to keep interest rates low, and this trend is lasting, considering the unfortunate state of public finances of the eurozone countries. The Keynesian multiplier also relies on the strange belief that consumption enriches and the thought that when people do not consume enough, what the government should do is just to distribute them money, created from nothing, taken from others, borrowed, whatever, which will combat economic depression and unemployment. This, however, ruins all hopes of achieving a decent return in the years to come.

Technically, the ECB is more autonomous in relations with the governments, though in practice, this independence is completely apocryphal. The decisions of the ECB are essentially made in the interests of several eurozone governments. By artificially lowering interest rates, the ECB could facilitate public debt, and by financing commercial banks lending to the eurozone countries, they guarantee to the latter an almost unlimited source of income, despite their already enormous debt. For Keynesians, this situation might seem satisfactory, but its outcome is the credit market that becomes completely distorted. Resources are allocated unproductively, contributing to slowing economic growth and thus reducing poverty.

The fact is that the large capital gains are no longer on the stock market, where central banks inject thousands of billions to inflate prices, but before the IPO and even in private equity transactions. Since 2012, the money of the insiders drained by venture capital is increasing considerably. The average real return on life insurance was 1.8% in 2016. In today’s markets, listed companies are now too big and too disconnected for their shareholders to be really involved in decision-making. Also, the banking crisis is still threatening, and the European system is far from being consolidated. This all leads to a conclusion that the current monetary system, based on unrestricted credit, is a new form of crime against humanity.

There is a strong need to adopt a different approach as the mass of credit is used to protect from bankruptcy the weak links used by the parasitocracy. In these situations, banks with doubtful debts, multinationals cooperating in ruinous public projects, and expensive social spendings in southern eurozone countries.

If we return to the comparison of the current situation with the ancient one, we will see that it was not the king or the emperor who decided that gold or silver was the best suited to trade and exchange, but it was a crowd of individuals, now fallen into dust, who have come to this conclusion. In their situation, gold was imposed in a pragmatic and democratic way simply because it worked best, while the so-called added value of a centralized system imposed by a ruler was limited to a seal certifying purity and weight. There should be noted that elites hate gold but have not dared to make the last move since central banks still have a gold reserve. Today central banks still have their treasuries, or at least, that is what is being said, while the people bother to rate precious metals. In the current situation, the dollar and the euro have fallen against gold (and silver), while the dollar dropped more than the euro. As is the case anywhere else, there is value and price. Value is what each one attributes at a given moment to something, that is, the satisfaction that everyone anticipates of possessing something one desires the most — the price is what an individual agrees to pay according to his own value scale.

Three key problems have become more visible under these circumstances. The first one is that zero interest rates and generous liquidity kept the dying business alive, inflating supply. In all sectors, there is an oversupply of everything, where marginal companies have been able to continue to function even though they are fading, generating just enough income to borrow more money and to postpone the repayment of their debts. The second problem is that the income was carried by steady growth in social security contributions instead of salaries. The third problem is that the majority of employers are unable to afford to pay higher wages without considering the labor market as they are faced with ever higher costs, while their power over prices is zero because of the surplus supply. Confronted with a total lack of power over prices and higher costs, employers can either increase the working hours of their current employees or hire part-time workers without contractual benefits.

These three problems represent the most visible effects of monetary measures implemented by the ECB. By market capitalization with the money achieved by borrowing, instead of balancing the market, the ECB creates an even greater problem of social stratification, making part of the companies and therefore a huge part of the population literally slaves. As it was prescribed by the Code of Hammurabi, anyone who attempts to counter financial movements to these flows in order to facilitate the position of slaves receives a fatal outcome.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

12. Crossing All Barriers between Nations, Policies and Cultures

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

Bitcoin is the most common, the first decentralized and the most valuable digital currency that represents a means of payment on the internet outside the control of any financial, national or international institution, or a single company from any industry. Each relocation from one collection to another is recorded in the cryptogram of bitcoin so that the recorded history of all transactions makes it achievable to launch clearly.

What differentiates bitcoin from national currencies is its independence from any central authority that controls trade, but on a participatory functioning of all users. It is difficult to find a currency in our history that has already been free from political influence or national economy. Bitcoin is a universal currency that is even accessible to the population that does not use banking services, which is seen as the key potential of its development, considering the large number of people who do not have bank accounts or are willing to find some type of alternative for it.

Unlike regular currencies, bitcoin crosses all the barriers between nations, policies, and cultures. Its position on the market and its features show that it could be characterized as a libertarian currency based on open source and decentralized software. It has no legal framework, unlike other subjects of the monetary system, since it has no legal tender, though it may be refused by a trader.

Bitcoin transactions take place on its fundamental technology, the blockchain, which represents a distributed public database that contains a record of all exchanges since its initiation and is an innovative technology to make its functioning confident all the way through the world, holding a key function in transparency of the exchange. Bitcoin is accepted as a means of payment by a growing number of online and physical traders.

The technological and methodological features of bitcoin do not relate to any central currency issuer; currency managing is extended over every part of the network. The proper functioning of the system relies exclusively on cryptographic techniques, and anyone can generate money at the price of a resulting utilization of a time machine. The creation of bitcoin takes place via the process called mining. Mining is essentially a distributed system of compromises used to authenticate expected transactions by counting them in the blockchain platform, maintaining a chronological order in the system, protecting impartiality of the network, and permitting other computers to be in agreement on system status.

In order to be confirmed, transactions must be enclosed in a block that follows very strict cryptographic rules that will be verified by the network. These rules also take account of the creation of the comparable game of chance that puts a stop to anyone from simply adding new blocks successively into the blockchain. Mining is the track of action by which bitcoin transactions are protected, and for this purpose, the miners accomplish mathematical calculations for their bitcoin network with their computer equipment.

The hash of a block must be smaller than an assured value, and in order to accomplish this, miners must discover and insert the block keeping the hash small enough. The miners perform cryptographic hashes on what is called a block header, and for each new hash, the mining software uses a different random number. The only possible way to discover it is to find one that suits, which requires a lot of CPU work. This is actually the key to the groundbreaking aspect of the bitcoin system, since this verification of work causes all those found spots to vote with their CPU, and it is complicated for a single entity that would want to take advantage of to do so.

These procedures prevent everyone from having control over what is incorporated in the blockchain, as well as from replacing parts so that it can pull through. Instead of that, bitcoin permits each individual to firmly accumulate and switch over value on a network that cannot be detained, influenced, or blocked by any institution or individual.

When an operation is completed, the user can also give a small amount to miners to encourage them to take the transaction into account, which means that the transactions are not without charge, but that the transaction costs are insignificant. The aim of miners is to distribute a block, and they have an interest in finding a block in the course of the return they are allowed to give themselves.

It should first be noted that there is only one method for creating bitcoins that belongs to an algorithm, which is to say to a deterministic computer process. The money supply is generated by the computing power of the network computers, by correlation with the mining process, and the increase in the number of flow bitcoins is known in advance. At the same time, giving free access to powerful tools plays a significant role in protecting individual privileges and autonomy.

In this regard, bitcoin has many advantages that are increasingly creating a center of attention for many users and investors, first of all, because there are no exchange fees, while the transaction costs are much smaller in comparison to the traditional monetary system. Besides that, users are anonymous, while their transactions are public, observable and made in a way that, once recorded, they cannot be interfered with or changed.

Since bitcoin is not regulated by any central authority and the offer of bitcoin is fixed in advance, totaled at 21 million, there is no guiding principle or inflationary heaviness that is one of the key problems regarding traditional currencies. A single bitcoin can be divided up to 100 millionths, and since the volume of bitcoins that are currently in circulation exceeds 10 million units, according to Brito et al, it is expected to reach the limit of 21 million by 2140.

The monetary swiftness of bitcoin identifies itself in advance and operates through the mining process. These are the features that prevent any type of inflation from occurring since, by structure, the upper limit of bitcoin will not exceed the amount of 21 million, being, at the same time, also characterized by an outsized divisibility of bitcoin, even though so far it is applied for up to 8 or 10, but theoretically it is infinite.

Bitcoin offers a remarkable list of security-related appearances since the protocol is also designed to be very opposed to a wide range of hacking attacks, including attempts such as distributed denial-of-service. Users are also allowed to broadcast their credit card number over the internet, and what many users see as the key benefit of bitcoin usage is the fact that the transactions are both secret when it comes to their privacy, as well as completely public when it comes to the transparency of the process.

In other words, not a single name or other data that in any way could reveal the identity of the user appears in transactions, nevertheless, their numeric addresses are broadcasted and stored by all parts of the network. The blockchain is itself formed by a series of blocks, where each block traces the newest transactions that have not yet been validated and recorded in the preceding blocks, protected by the innovative types of technology.

The condition of every user’s account is open and it results from all the transactions that are connected with this process. The confirmation of the operation is not a matter of any central entity, but by the other nodes of the network, while the addresses are alphanumeric chains of approximately 30 characters. Each transaction is accumulated in a special register called blockchain, which is helpful in authenticating the whole procedure to complete it successfully, so that the transiting assessment was essentially owned before being finally deposited. Once the process is confirmed by the network, this block is added to the blockchain and consequently, it spreads the information.

Bitcoin can be used in transactions to buy goods and services both on online shopping sites and in physical stores that accept this currency. To make a payment with bitcoin, the buyer is supposed to have an electronic wallet via one of the available software services installed on their computer that uses an application installed on their mobile device and to go to a websit

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

8. Medium of Exchange Rather than the Tool for Value Accumulation

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

Explaining the meaning and the purpose of the digital currency bitcoin has led to defining its level in comparison with the existing monetary system or the position of leading central banks, where many people think that a country is sovereign and that if it has contracted a debt in a currency, it is free to reimburse it in another country it chooses.

Since Bitcoin was not created by banks, it does not depend on any state, and it is also not linked to any specific currency. Therefore, it is not tied to a specific central bank. Bitcoin is interchangeable with dollars, euros, or any other major currency. From an economic standpoint, it is classified as a currency that is not issued by a bank and is not linked to a currency agreement. Besides that, it does not have a monetary policy.

If we consider a currency such as the euro as a reward without fundamental value, whose procedure is imposed on its users, there is an open question about what digital currency actually is and what it is used for. The easiest way to explain it is to observe the euro as a coupon in the monetary sector in which the euro has legal tender. A banknote is a holder’s declaration valid in any country where it is in the payment system, and it represents a means of payment without inherent value, valid in a large geographical area.

Bitcoin is not a commodity money, nor a fiat currency since it has no required price. Its shares are not backed by a material asset, as it has value only because economic actors agree to use it in cases where the internet facilitates exchanges between them. There is no need for great thoughts to look forward to the effects of such guidelines. It is oriented more toward the monetary exchange purpose than to be a tool for accumulating value, even though its deflationary character can theoretically lead to that.

While alternative currency applications are generally distinct by very strong constructivism or by the necessity of force to enforce a new conception, Bitcoin is merely an individual project that aims to rise above private initiatives. A restricted amount of a valuable supply whose worth cannot be affected by state assessments shows that this is an example of something that can be called digital gold because the volume of the user base is increasing, which shows the way to a price increase.

Besides that, the profile of buyers is widening too, so it is no longer reserved only for experts in the digital world, assuring users of the rapidity of transfers and the safety of the new currency. As a result, Bitcoin sustained its growth to the point of declaring itself as the financial asset with the best annual performance in all currencies during 2016. Bitcoin reacts like an asylum since younger generations do not believe in gold as their parents do, and in emerging markets, in particular, this cryptocurrency becomes the investment to refer to, whereas it is much easier to use than gold.

This digital currency is resistant to money laundering, which is the catching disease of a growing number of central banks. The reason for its immunity to this is written in its algorithm of operation (not modifiable) that there will never be more than 21 million bitcoins in circulation. Some of them have already earned enormous gains, while we continue to settle for a few percent per year. As one can imagine, such an increase has made some people extremely wealthy, but for once, it was not a handful of bankers. The funds could be generated to start a new businesses and help others in the transition to this new form of savings and banking.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

5. Understanding Blockchain: The Main Objective and the Initial Challenges

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

Blockchain and FinTech play a central part in the digital revolution that shakes the world of banks, insurance companies, and more financial markets in general, therefore it is the reason why a new arrangement will allow the revision of the positive law to empower the issuance and the conduction of certain non-admitted financial securities to the operations of a central securities custodian by using this platform.

Blockchain and FinTech play a central part in the digital revolution that shakes the world of banks, insurance companies, and more financial markets in general. Therefore, it is the reason why a new arrangement will allow the revision of the positive law to empower the issuance and the conduction of certain non-admitted financial securities to the operations of a central securities custodian by using this platform.

To grasp the extent of the FinTech and blockchain revolution, it’s essential to recognize the rapid advancement of hi-tech innovation. This includes a growing emphasis on improved connectivity with related factors such as regulations and their enforcement, shifts in banking practices, and heightened competition from agile FinTech start-ups. These startups leverage their swiftness to exert a significant influence on the conventional financial sector.

In the blockchain system, if a majority of participants, referred to as “minors,” reach a consensus on a transaction’s validity, it is then officially approved, time-stamped, and recorded in the shared ledger. Subsequently, a new block is added to the blockchain in a chronological and irrevocable manner. Despite its departure from the existing model, this approach encounters certain drawbacks, notably in terms of speed and cost. The substantial computing power required for transaction verification limits its widespread adoption.

This transformative practice has gained traction since the 2008 financial crisis, affecting both securities and cash systems. A significant challenge identified early in blockchain development is the resource-intensive nature of the current banking system targeted for improvement. This system demands extensive technical resources and involves a large number of individuals on each side of transactions, including institutions playing roles as lenders and borrowers.

The key driver for introducing change is the principle of openness, primarily facilitated through the utilization of blockchain technology. A pivotal aspect of this shift is the regular revaluation of collateral at standard intervals, such as daily or every few hours. This aligns with the market price of the security, providing transparency and efficiency in managing contracts and open positions associated with it.

Given that the period without any constructive action has lasted too long, there is a strong determination among Bitcoin enthusiasts to take charge and promote a new supplement to the blockchain world. This new version competes with the original and proposes an irreversible adjustment of the rules governing Bitcoin’s software. The aim is to enhance network control and facilitate more transactions. Enthusiasts are particularly focused on integrating Bitcoin with other fiat currencies, employing more influential and consensus-based schemes that rely on a certain level of trust among participants.

As blockchain usage raises fewer authorities or security concerns, it’s not surprising that this technology is being considered to advance existing solutions. To cope with fluctuations and the potential fractional return of securities, a margin call is contemplated between the two parties. Each party conducts its own assessment, comparing it with their counterparts. The use of blockchain in the financial sector could fundamentally revolutionize the situation by reducing the complexity of reconciliation processes.

This platform aims to simplify the process by performing a single computation and presenting a harmonized representation to stakeholders, eliminating discrepancies in theory. For this transformation to occur, a majority of mining instruments must align, corresponding to three-quarters of the computing power of the network for two weeks. This demonstrates that the users are reliant on its volatility, emphasizing that the conversion rate of regular money into Bitcoin may differ from when converting Bitcoin into regular money.

This does not imply the necessity of a Bitcoin address to send money, as an email or phone number is sufficient. If the beneficiary lacks a digital wallet in supported currencies, they will receive Bitcoins that can be exchanged on other platforms. Depending on the success of this overhaul and how quickly Bitcoin evolves, the registers where transactions are recorded will develop, and their confrontations will be observed.

We’ve seen how this plays out with Ethereum, which indirectly benefits from Bitcoin’s slowdowns. Regarding the relationship between blockchain and Ethereum, it has increased as an experimental platform involving certain types of smart contracts. These contracts act as self-ruling processor code evolving in the database, fulfilling exchange requirements if specific conditions are met.

Cryptocurrencies have primarily benefited from the enthusiasm, passion, and trust within the global Bitcoin community. Many enthusiasts believe this type of transaction represents the future of money, anticipating it will eventually replace traditional currencies, although not in the short term. Regulation will depend on how willing authorities are to adapt the framework for services offering these transactions. Restrictions in electronic payments related to gambling are expected, with the right to replace or cancel transactions without warning and adjust time limits for exchange and withdrawal.

The new system could support major cryptocurrency mining companies, leading to the absorption and centralization of this movement into an oligopoly. This divergence highlights the opposition between mining businesses and the group responsible for improving the Bitcoin network, bringing together crucial resources.

Blockchain is a technology for immediate data synchronization, and transaction realization involves tests to authenticate specific conditions and ensure compliance with regulations. However, expecting this technology to transform the payment industry in the next few years is overly optimistic. The current technological usage is not tailored for the performance of mass payment resources requiring quick responses, as with payment cards.

The formation of a private blockchain, shared with smart contract tools, appears to be the ultimate solution to optimize reconciliation procedures between financial institutions while remaining visible to regulatory bodies. In any transaction services, this is expected to facilitate the automatic transmission of verified information, automate confirmation procedures, and ensure regulatory compliance.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

2. The Danger Zone – Where Nominal Yields Do Not Effectively Reimburse the Risk of Collapse

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

From a certain point that the markets have already achieved, banks will no longer be capable to boost credit amount to reimburse for losses from their central bank, which might clarify the disintegration of the banking sector.

The phenomenon of negative interest rates embodies an inverted structure wherein the borrower deducts a calculated amount, based on the agreed-upon rate, from the owed sum. This results in a scenario where the more one borrows, the less one repays.

A discernible threat accompanies the rise of negative interest rates, particularly evident in Europe, as it poses a risk to financial independence and economic expectations.

After maintaining its rate at nearly zero for over seven years, the Federal Reserve of the United States announced its first increase in December 2015. Since then, global markets have entered a new era of monetary policy, characterized by exceptional measures adopted by almost all central banks worldwide in response to the previous decade’s financial crisis.

The looming question revolves around whether this upward trajectory will impede the slow economic recovery. Financial and economic entities have grown reliant on easy money, and uncertainties persist regarding their ability to adapt to higher rates. Hence, observers anxiously attempt to discern the potential outcomes by year-end.

In many global markets, especially in Europe, central banks are adopting a reverse trend, implementing a negative interest rate policy for the first time.

The gradual decline in interest rates has taken on a new dimension, enabling numerous countries to reduce their indebtedness. The injection of free liquidity into banks serves as a lifeline for governments. In the case of the European Central Bank, the objective is clear: infuse money into the financial system, fostering a more considerate approach toward indebted countries.

National central banks, expanding their balance sheets by purchasing lower-rated bank debt, inundate financial institutions with free money. However, these institutions, seeking yields, venture into the perilous territory of investing in assets where the nominal yield fails to adequately compensate for the risk of collapse.

This scheme, under ordinary circumstances, would never find traction in a financial system operating close to historical averages. Yet, with abundant liquidity awaiting investment, the hope for increased growth persists. Nonetheless, the mitigating factors fall short of eliminating the probability of a breakdown in such funds.

Moreover, the expectation that banks will offer money at lower rates for an extended period prompts them to make alternative income. Given that the interest rate is near zero, banks generate returns by lending money to others at a somewhat higher interest rate, creating a distinctive income stream.

Ordinary interest rates reflect the interplay between the present and the future, coupled with expectations of future prosperity. This dynamic explains why interest rates tend to be higher in the poorest countries, where the cost of time is minimal. On the contrary, financial interest rates, directly or indirectly influenced by central bankers, represent the cost of accessible money within a specified timeframe. Any deviation from these two scenarios is a harbinger of a crisis where money is supplied without adhering to economic principles.

Negative interest rates create a scenario wherein individuals deposit money with a bank, turning it into a cost rather than a return. In times when conventional savings show minimal gains, borrowing becomes more appealing, as the repayment amount is lower than the borrowed sum.

Consequently, traders seeking yields are compelled to explore speculative dealings and transactions related to commodities such as oil and gold. However, the overarching impact of zero or negative rates on the investment’s value contributes to the endorsement of negative rates on savings without commensurate performance. The inherent risk in banking balance sheets remains elevated, and investors, regardless of their risk aversion, are poised to bear the price of potential losses.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

1. There’s No Way to Be an Optimist while Zero Rates Appear

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

The scenario involving negative interest rates signifies an unconventional structure where the borrower deducts a calculated amount from what they owe, based on the agreed-upon rate between the contractual parties. Essentially, the more one borrows, the less one will need to repay.

The emergence of negative interest rates poses a certain threat, and this concern is becoming more evident in Europe. It poses a risk to financial independence and economic expectations in the region.

For over seven years, the Federal Reserve of the United States maintained its rate at nearly zero. However, a significant shift occurred in December 2015 when the Federal Reserve announced its first interest rate increase. Since then, global markets have entered a new phase of monetary policy known as “exceptional”, adopted by nearly all central banks worldwide following the financial crisis of the previous decade.

The key question revolves around whether the ongoing progress in this new direction will impede the sluggish economic recovery. As financial and economic entities have grown reliant on easy money, there is uncertainty about their ability to adapt to higher interest rates. Hence, observers are keenly trying to decipher potential outcomes by the year’s end.

The global landscape features numerous markets, with Europe being a notable example where central banks are diverging from the norm by initiating a negative interest rate policy for the first time. The gradual decline in interest rates has taken on a new dimension, demonstrating its effectiveness in allowing many countries to reduce their indebtedness. This is achieved through the injection of free liquidity into banks, which then becomes a tool for governments to manage their financial obligations. In the case of the European Central Bank, the primary focus is on injecting money into the financial system, fostering a more accommodating environment for indebted countries – a pathway that is becoming increasingly apparent.

Many national central banks have expanded their balance sheets by acquiring lower-rated bank debt, effectively injecting financial institutions with free money. However, these institutions, in their pursuit of higher yields, may inadvertently step into the danger zone by investing in assets where the nominal yield fails to adequately compensate for the risk of potential collapse.

This particular scheme would unlikely be entertained in a financial system priced close to historical averages. The cash ready for investment has been anticipated as a catalyst for economic growth. Nevertheless, the compensation offered may not be sufficient to entirely mitigate the risk of these funds experiencing a breakdown.

Moreover, this strategy was executed under the assumption that banks would continue offering money at reduced rates for at least a year. In this scenario, where interest rates hover around zero, banks generate returns after loaning money to others who, in turn, pay a somewhat higher interest rate to access those funds. Consequently, the bank realizes varied income streams through this diverse financial arrangement.

The standard interest rate serves as a gauge of the interaction between the present and the future, reflecting expectations of future prosperity. This dynamic is why interest rates tend to be higher in economically challenged countries, where the opportunity cost of time is minimal. Conversely, the financial interest rate, directly or indirectly influenced by central bank policies, signifies the cost of available money at a specific time. Any deviation from the norms of these two scenarios can potentially trigger a crisis, where money is offered without adherence to economic principles.

Negative interest rates come into play when individuals deposit their capital in the bank, turning it into a cost rather than a return. In times like these, conventional savings lose their appeal as they fail to yield any noticeable gains. Instead, borrowing becomes more attractive, as the amount to be repaid is lower than the sum borrowed, creating a distinctive financial landscape.

In such a scenario, traders often resort to an alternative strategy to unearth yields, engaging in speculative dealings and transactions involving commodities like oil and gold. However, the presence of zero or negative interest rates has a detrimental impact on the overall value of investments, promoting negative rates on savings without any corresponding performance. The inherent issue lies in the elevated risk associated with banking balance sheets, and the cost of potential losses is inevitably borne by investors, irrespective of their risk aversion.

This article is part of the academic publication Dividing by Zero by Ana Nives Radovic, Global Knowledge 2018

Introduction to “Dividing by Zero”

Posted on February 2, 2018February 1, 2024 by Ana Nives Radovic

Although created as an alternative to the current financial system, which is characterized by an extremely high degree of institutional control of market processes, bitcoin has many elements of those approaches advocated by the leading proponents of libertarianism, as its way to the broader representation in the daily operations is more difficult, but not impossible.

Growing number of irregularities that occur on the global market, such as currency wars, illogical implementation of zero rate policies and expensive QE programs are another reason for growing trust in bitcoin, since it is not a subject to control of any single institution, having in mind that the level of its demand is the key factor that determines its price.

This research stems from the nature of bitcoin and blockchain platform, which establishes the basis the future of the global financial system, since a growing number of major banks around the world intends to adopt its principles and let them use this type of technology in their operations. Blockchain has proven to be an innovative, fast and reliable channel for the transfer of funds from a much smaller transaction costs compared to what current systems allow, for which financial institutions have shown interest in this model.

Cryptocurrencies, as key financial and technological phenomenon of today, allow the anonymity of transactions, as well as the possibility to make a profit from a change of their values. Since 2013, when the bitcoin become a subject to trade of a large number of participants, created a need to explain its functioning, and all information further contributed in eliminating ambiguities related to them.

The aim of this research is to analyze the possibility of using base which the bitcoin and platform blockchain provide for the creation of future cryptocurrencies and platforms, defining electronic money as a means of payment based on the properties of the physical currencies. The main tasks of this research are the analysis of the origin, essence and role of cryptocurrencies in the modern financial and technological world. The study of the phenomenon of digital money points to the growing need of financial institutions to eliminate the resistance that upon occurrence of cryptocurrencies that are manifested towards this phenomenon, as well as to see the possibilities of their application.

This publication offers the definition of the basic properties cryptocurrencies, their development with an emphasis on bitcoin, as well as its role in the money market. It also shows that the fact that the bitcoin users are directly guided by their confidence, which is the main reason for its success, since it offered the system that guarantees the reliability of transactions and the possibility of their implementation in the short term.

Zašto Apple ne dopušta trgovanje bitcoinom na iOS-u?

Posted on April 9, 2014April 12, 2014 by Ana Nives Radovic

Odluka kompanije Apple da blokira aplikacije za trgovanje bitcoinom na mobilnim uređajima izazvala je negodovanje korisnika, no postoje razlozi zbog kojih ipak ne treba odustati od svog iPhonea, budući da su nove mogućnosti tek u pripremi, a trikovi za brzo snalaženje uvijek izvodljivi

Uređaje iPhone i iPad posjeduje oko 100 miliona korisnika širom svijeta i zajedno čine najbrže rastuću industriju mobilnog plaćanja čija vrijednost je tokom posljednje tri godine procijenjena na 90 milijardi dolara.

Sa ovim brojem korisnika Apple raspolaže mogućnošću da drugom subjektu donese korist ili štetu, u zavisnosti od želje da nešto odobri ili uskrati svojim korisnicima.

Kada je 6. februara Apple odlučio da na iOS uređajima onemogući rad Blockchain aplikacije pomoću koje se odvija trgovanje bitcoinom, za ovu kriptovalutu to je predstavljalo veliki udarac.

Razočarenja i gubici

Brojnim vlasnicima Appleovih mobilnih uređaja i istovremeno bitcoin trejderima ne samo da je uklanjanje aplikacija za prometovanje bitcoinom iz App Storea predstavljalo povod za razočarenje, već i nanijelo štetu onoliku koliko je vrijedila njihova imovina u digitalnom novčaniku smještenom na konkretnom iPhoneu ili iPadu.

Samo nekoliko sati nakon što je odjeknula ova informacija internet su preplavili snimci razočaranih korisnika koji uništavaju svoje Apple uređaje. Ovim je dijelom i umanjena svrha samog iPhonea kao pametnog telefona koji se kupuje iz želje da vlasniku donosi novac tako što ga, zahvaljujući besprekorno razvijenim aplikacijama za tržište kapitala informiše i omogućava mu učešće u transakcijama.

Ipak, zarađuje se na onaj način na koji Apple dozvoli. Možete se poigravati čak i sa njihovim akcijama na berzi, ali kupovina i prodaja bitcoina vam je zabranjena. Ako ste bitcoin trejder, iPhone je za vas izgubio gotovo svaki smisao, zar ne?

Poznata kao kompanija koja ne obrazlaže previše svoje poslovne odluke, kao razlog za uklanjanje Blockchain aplikacije Apple je naveo „neriješena pitanja“. Ono što nije zvanično saopšteno, ali što se na osnovu dosadašnje dinamike razvoja novih opcija može zaključiti jeste da se Apple po svemu sudeći priprema za uvođenje novog, sopstvenog sistema digitalnog plaćanja zbog kojeg digitalnu valutu vidi kao nepoželjnu konkurenciju.

Ma koliko monopolističkog u njemu bilo, potez Applea može se nazvati prilično hrabrim, budući da je ovim direktno uslovio interesovanje bitcoin trejdera za uređaje na drugim platformama, a svom najvećem konkurentu, kompaniji Google, nesvjesno učinio uslugu.

Postojeća baza korisnika

Prednost Applea je ipak u jedinstvenoj pozicioniranosti kod mobilnog plaćanja koje može postati dostupno za oko 600 miliona korisnika kreditnih kartica kojima se vrše online uplate, što je i dalje znatno veća baza potencijalnih korisnika u odnosu na onu koju čini oko 110 miliona aktivnih PayPall korisnika ili tek nekoliko miliona onih koji internet usluge plaćaju bitcoinom, što je u redu veličina kompanije sa logom jabuke neznatan iznos.

Apple u svakom poslu insistira na potpunoj jasnoći – otklanjanju sumnje da će prilikom korišćenja doći do suprotstvaljenih interesa. U ovom slučaju, interesi subjekata koji izdaju kreditne kartice svode se na želju za ulaskom u ovakve poslove zbog zarade koju ostvaruju na osnovu transakcionih troškova, a bitcoin vide kao direktnu konkurenciju, budući da, lišen toga, predstavlja jeftiniji način internet plaćanja.

Napredni sistem plaćanja

Apple postavlja temelje platnog sistema već godinama, mnoge od njih je prilagodio isključivo svojim korisnicima, omogućavajući im da uz iTunes servis kupuju aplikacije, muziku, literaturu ili filmove.

iTunes je razvijan godinama i dokazan je kao pouzdan način koji korisniku osigurava privatnost i bezbjednost plaćanja, zbog čega kompanija može raditi samo na razvoju naprednijih servisa na istom principu.

Wall Street Journal je još početkom godine najavio da Apple planira razvoj dalekosežnijeg platnog sistema koji će obuhvatati mnogo više od preuzimanja fajlova za mobilne uređaje. Jedan dio već je postignut uz pomoć iBeacon servisa za kupovinu, no nove mogućnosti tek slijede. Do tada, Appleu, izgleda, niko neće remetiti planove.

Poštovanje principa ispred želje za konkurentskom prednošću

Apple i bitcoin u osnovi imaju sličnu ideju – kreirani su da bi omogućili sve ono što kod već postojećeg loše funkcioniše, izaziva razočarenja korisnika i neželjene dodatne troškove.

Tretiranje konkurencije još jedan je primjer njihove međusobne sličnosti. Apple će radije dozvoliti Googleove servise na svojim uređajima ukoliko ih to čini bogatijim (makar nakon fijaska sa sopstvenom aplikacijom za mapiranje, ne želeći da dopusti Google Maps), baš kao što će i najstrastveniji bitcoin trejder prije preporučiti trgovanje drugim kriptovalutama nego bilo kakav alternativni metod, a i jedni i drugi to čine znajući da je cilj ostati u granicama postojećeg, a zaključak o prednostima prepustiti korisnicima koji će ih sami uvidjeti.

Za utjehu dozvolili aplikaciju bitWallet

Nakon masovne demonstracije bijesa nezadovoljnih Appleovih korisnika koji trguju bitcoinom, kompanija je odlučila da ipak ponudi prelazno rješenje u vidu digitalnog novčanika za iPhone i iPad nazvanog bitWallet. Međutim, ključno ograničenje bitWalleta je što onemogućava direktno slanje bitcoina.

Applikacija je izuzetno pregledna i jednostavna za korišćenje, a postoji i mogućnost da nadoknadite organičenje u slanju bitcoina direktno sa aplikacije isporučivanjem privatnih kodova bilo kojem klijentu, čime se takođe omogućava digitalnom novcu da stigne do ciljanog korisnika.

Privatni podaci se iz bezbjednosnih razloga svaki put unose iznova, a korisnicima omogućava praćenje i detaljan uvid u svaku transakciju.

Korisnički kodovi sve vrijeme ostaju šifrovani. Nedostatak mogućnosti direktnog slanja nadoknađuje se kodovima putem blockchain.info servisa.

Aplikaciju bitWallet kreirala je kompanija Sollico, a ovaj servis je već skoro mjesec dana dostupan u App Storeu i jedini ove vrste na kojoj Apple omogućava neki vid interakcije kod ove kriptovalute.

Šta garantuje sigurnost pri ulaganju bitcoin

Posted on March 19, 2014April 5, 2014 by Ana Nives Radovic

Posljednjih nekoliko sedmica situacija vezana za najpopularniju svjetsku kriptovalutu bitcoin bila je pod posebnom pažnjom javnosti.

Prvo je 25. februara jedna od najstarijih i među onima sa najvećim brojem korisnika platforma za trgovinu Mt.Gox prestala sa radom.

Zatim je 6. marta direktorka kompanije First Met za trgovanje bitcoinom Autumn Radtke pronađena mrtva.

Ova dva povoda punila su medijske članke i posebno ohrabrila sve one protivnike kriptovaluta da ukazuju na njihovu negativnu stranu, a one sumnjičave dodatno obeshrabrila da se upuste u trgovinu novčićima od bitova.

Slika u javnosti

Dio svjetskih medijia samo je dobio nove povode za nastavak negativne kampanje protiv kriptovaluta.

No, nijesu mediji ti koji se protive ovoj nadolazećoj monetarnoj inovaciji, već oni subjekti kojima postojeći globalni finansijski sistem donosi zaradu, pretežno na štetu velikog broja populacije, a koji pokušavaju da sve što se postavi kao moguća prijetnja nesmetanom funkcionisanju njihovih načela predstave kao ilegalnu, sumnjivu i nepoželjnu pojavu.

Tako je nekoliko vodećih međunarodnih banaka početkom prošle godine kupovalo bitcoin kako bi ga na kratko zadržalo u svojim rezervama, a potom ga prodavalo po tržišno ni malo opravdanoj preniskoj cijeni kako bi mu oborili vrijednost.

Ipak, u tome su uspjeli samo na kratko, zahvaljujući zakonima promjene cijena u uslovima razlika u ponudi i tražnji, što je trajalo tek toliko dok nijesu iscrpili svoje rezerve, a nakon čega su izgubile mogućnost da utiču na ovaj način.

Stabilnost i rast

Postojanost ove digitalne valute potvrđena je preživljavanjem brojnih pokušaja njenog degradiranja i krahova tokom posljednjih nekoliko mjeseci, budući da ni jedan faktor nije bio dovoljan da joj trajno obori vrijednost.

Ukoliko ste prije godinu dana kada je Pobjeda objavila prve informacije o bitcoinu, čija je jedinična cijena tada iznosila oko 50 dolara i kada smo savjetovali čitaoce da se odluče za ovaj vid investiranja to i učinili, vaš ulog do kraja prošle godine bio je uvećan čak 20 puta, jer je već sredinom decembra jedan novčić od bitova vrijedio i više od 1.100 dolara.

Ako ste bili sumnjičavi propustili ste idealno vrijeme za ulazak u svijet bitcoina, no ni sada to nije kasno, s tim što je cijena pristupanja ovom vidu investiranja danas mnogo veća.

Bitcoinom se danas trguje po cijeni od oko 630 dolara, na kojima se stabilizovao nakon dvomjesečnih oscilacija.

Ukoliko od početka pratite ovu priču u poljednjih godinu dana nijeste propustili ni jedan značajniji detalj koji je uticao na cijenu o kojima smo informisali čitaoce, a ako se prvi put susrećete sa ovim biće vam dovoljan kratak osvrt kako bi vam bile jasnije specifičnosti bitcoina.

Transakcije

Prije svega, riječ je o virtuelnom novcu koji se u oba smjera može mijenjati za stvarni.

Njime možete obaviti sve veći broj plaćanja usluga i proizvoda na brojnim internet sajtovima, možete ga čuvati u svom digitalnom novčaniku na svom računaru čekajući da mu se uveća vrijednost, a možete ga, prema signalima koje dobijate sa tržišta prodajom i kupovinom koristiti za manje zarade u kraćem vremenskom roku.

Njegovu cijenu, baš kao i cijenu svega drugog čime se prometuje, diktira zakon ponude i tražnje, no jedna specifičnost je ograničenost njegove ponude. Bitcoin nije novac koji neka finansijska institucija ima mogućnost da proizvede u onoj mjeri u kojoj je potrebno da pokrije nedostatke.

Nema „doštampavanja“

Inicijalno je na tržište pušten 21 milion bitcoina i taj se broj ne uvećava bilo kakvim doštampavanjem, što je jedan od prvih preduslova za nemogućnost suočavanja sa devalvacijom.

Dalje, bitcoin je nezavisan od bilo kakve centralne vlasti.

Države mogu da regulišu oblasti u kojima se on prometuje, no to ne znači da imaju direktan uticaj na bitcoin.

Olakšice i zabrane

U nekim zemljama je zabranjen, u smislu da je tamo, kao što je to slučaj u Rusiji, kažnjivo obavljati bilo kakve transakcije, odnosno prihvatiti ga u svojoj djelatnosti kao sredstvo plaćanja.

U zemljama poput Kine koristi se u ogromnim količinama u internet plaćanjima, iako ga same banke zabranjuju.

U Indiji su bitcoin mjenjačnice prestale sa radom nakon snažnog pritiska vlasti te zemlje koje su procjenile da korišćenje kriptovaluta nije u skladu sa zakonom kojim se sprečava pranje novca.

Iako je, zahvaljujući Kini, Azija postala snažno uporište digitalnih valuta, nakon poteza kineskih vlasti azijski centar bitcoina preseljen je u Singapur, gdje je naišao na najmanja ograničenja i najbolju povezanost sa ključnim tržištima.

Sjedinjene Američke Države nijesu formirale konačan regulatorni okvir za uređivanje dozvoljenog i nedozvoljenog u ovoj oblasti.

Bitcoin nesumnjivo predstavlja jedan od budućih oblika ulaganja, generiše kapital sa drugih tržišta i služi kao alternativni oblik za ostvarivanje ekonomskog oporavka na pojedinačnom planu, no njegovi principi kose se sa načinima funkcionisanja krupnih finansijskih igrača koji su proizveli i koji održavaju postojeće stanje u američkoj ekonomiji. U SAD, a naročito u njihovom sjevernom susjedu, Kanadi, sve više je pogodnosti za korišćenje ove kriptovalute.

Kada su u pitanju zemlje Evropske unije, najveću olakšicu označio je zaključak Evropske centralne banke da trgovanje bitcoinom ne predstavlja rizik po cjenovnu stabilnost.

Veći garant da je riječ o nečemu što niti je prijetnja ekonomiji, niti predispozicija za ilegalne aktivnosti nije mogao postojati od toga da je u Bundestagu dobio zemeno svijetlo, uzevši u obzir rigorozne mjere na kojima Njemačka insistira kada je bilo kakvo regulisanje razmjene u pitanju.

Najveća dobrodošlica priređena mu je ipak u Velikoj Britaniji čija je poreska uprava odlučila da ukine porez na dodatu vrijednost u plaćanju digitalnom valutom.

Mudar potez britanskih finansijskih vlasti pokazao je viši nivo otvorenosti te zemlje za plaćanje sredstvom koje danas ogroman broj korisnika posjeduje, a sve veći broj želi da sa njim raspolaže.

Jednostavnije plaćanje

Korisnici interneta širom svijeta traže načine da, nakon što mu je uvećana vrijednost, vrše online plaćanja bitcoinom.

Sve veći broj sajtova za online kupovinu naglašava da prihvata bitcoin i prikazuje cijene svojih proizvoda i usluga u ovoj kriptovaluti.

U plaćanju na ovaj način pokazao se mnogo povoljnijim od na primjer PayPall servisa, koji nije svugdje moguć i koji zavisi od vlasti zemlje korisnika.

Sa bitcoinom plaćate sve i svuda, a pritom anonimno, čime se dodatno podiže stepen privatnosti vaših porudžbina.

Stoga banke mogu samo imati pregled transakcija kada ste bitcoin u kupovini ili prodaji mijenjali za novac, ali ne i u koje svrhe ste ga potrošili.

Crno tržište

Ipak, ovo je segment koji i izaziva najviše polemike, s obzirom da je na ovaj način moguće doći do ilegalnih proizvoda, prie svega narkotika, što je dugo praktikovano na sajtu Silk Road, kojeg je ugasio FBI, a čiji vlasnik je prošle godine uhapšen.

Ovo je u medjima, onim koji su, zarad interesa onih čije ideje promovišu kritički nastrojeni prema bitcoinu, odmah pokrenulo lavinu osuda, nazvavši bitcoin sredstvom ostvarivanja nezakonitih nabavki.

Besmisao takvog shvatanja najjednostavnije je uočiti u njegovom poređenju sa stvarnim novcem – koliko se narkotika, oružja i brojnih usluga čije koriščenje se smatra krivičnim djelom plaća stvarnim novcem, pri čemu niko nije osporavao keš kao sredstvo, već pokušavao da kazni aktere takvih radnji.

Isto je i sa bitcoinom, i ovo je vjerovatno jedna od najkonkretnijih zajedničkih osobina koje ima sa stvarnim novcem, što vrlo rijetko ističu oni koji pokušavaju da ga sa njim uporede i da dokažu njegovu neodrživost tako što će ukazati da ne podliježe nekim od ključnih monetarnih principa.

Virtuelnim ili fizičkim novcem plaća se sve, a to da li ćete zaći u ilegalne vode zavisi od vaših odluka na šta ćete ga trošiti, iako je stepen kontrole sve veći, a ne od toga da li ćete plaćati bitcoinom.

Iako se sve vrijeme u javnosti naglašavalo da je riječ o sredstvu plaćanja od koje najveću korist imaju narko-dileri, ključne prednosti ipak pripadaju populaciji srednje klase širom svijeta.

Mikrotransakcije

Prednost bitcoina su mikrotransakcije, prije svega kod online plaćanja usluga koje koštaju manje od onoga što najmanja jedinica neke valute vrijedi.

Primjera radi, vlasnik nekog sajta želi da naplati pregled sadržaja u mjeri u kojoj cijena ne predstavlja veliki izdatak za posjetioca, a njemu, računajući na brojnost posjeta, omogućava zaradu.

Ukoliko se dobijanje lozinke za pristup omogućava elektronskim putem, a na taj način vrši i plaćanje, mnogo je jednostavnije ovakve vrijednosti obračunavati u bitcoinu nego u stvarnom novcu.

Prije svega, precizniji je omjer cijena, jer izražene u novucu, dvije najjeftinije usluge mogu koštati jedan ili dva centa, iako je na mikro planu njihova vrijednost ista. Razlika između jednog i dva centa je ipak – duplo.

Sa bitcoinom cijena može biti izražena u onoliko decimala koliko je potrebno da zadovolji i najpreciznija mjerenja.

Na pojedinačnom planu ovakva pitanja djeluju zanemarivo, ali ukoliko se pomnože hiljadama ili milionima, na dnevnom ili godišnjem nivou, razlike u zaradi su ogromne.

Pritom, nema plaćanja transakcionih troškova poput onih koji postoje u elektronskom bankarstvu, kako bi posredniku zarada omogućila iz provizije.

Kriptografski dokaz

Trgovina bitcoinom je direktna, unovčivi bitovi se samo sele sa jednog na drugi računar i nikakva finansijska institucija ne igra ulogu u tom procesu.

Među ključnim prednostima bitcoina je pouzdanost transakcija, čiju bezbjednost ne uslovljava uzajamni dogovor prodavca i kupca, već konkretna matematička garancija, kriptografski dokaz da je transakcija izvršena.

Promjene vrijednosti bitcoina uslovljavaju promjenu cijene, ali većina vlasnika ovih sajtova to ne vidi kao ograničavajuću okolnost, jer im je osim zarade cilj da je ostvare upravo u bitcoinu, računajući na njegovu budućnost.

Sve ovo ukazuje da je ključna komponenta za uspješno trgovanje ovom kriptovalutom optimizam u vezi sa njenom budućnošću i značajem koji će ubrzo imati, a manje osvrta na medijske navode i izjave onih zahvaljujući čijim je politikama i strategijama jaz između bogatih i siromašnih danas najveći od postanka čovječanstva.

Bitcoin – satkan od bitova i povjerenja (2)

Posted on March 10, 2014March 12, 2014 by Ana Nives Radovic

Vijest da je prošle sedmice Velika Britanija ukinula porez na dodatu vrijednost u transakcijama bitcoinom otvorila je niz pitanja znatiželjne javnosti, naročito u trenutku dok se, na drugom kraju planete vode oštre polemike oko upotrebe ove kriptovalute.

Dok je u Ujedinjenom Kraljevstvu ovoj digitalnoj valuti upriličen svojevrstan oblik dobrodošlice kroz olakšice u prometovanju, a poreske vlasti prepoznale njen rastući značaj i zastupljenost u trgovanju i investicijama, u Singapuru se bitcoin pominjao u vijestima iz crne hronike.

Naime, policija u toj zemlji pokrenula je istragu smrtnog slučaja 28-godišnje američke državljanke Otum Ratke, koja je bila izvršni direktor jedne od brojnih platformi za trgovanje bitcoinom First Meta Exchange.

Ova kompanija, na čijem čelu se Ratke u Singapuru nalazila od 2012. godine, omogućila je plaćanje kriptovalutama širom Jugoistočne Azije, što je naišlo na veliko odobravanje, naročito populacije srednje klase koja koristi savremenu tehnologiju i kojoj je dostupnost ovakvih transakcija značila veliku prednost.

Singapur je postao središte azijskog kontinenta za razmjenu bitcoina, nakon što su u Kini i Japanu finansijske vlasti počele sve strože da kontrolišu ovaj segment tržišta, nakon čega je u tu zemlju svoja sjedišta preselio veliki broj operatera, kao i stručnjaka za informacione tehnologije.

Nakon naglog gašenja popularne japanske platforme za trgovinu Mt.Gox, te krađe 600.000 dolara vrijednih bitcoina sa kanadske platforme Flexcoin, medijske članke i televizijske priloge širom svijeta preplavili su tekstovi kojima se dodatno podiže nivo panike i čini da se dio vlasnika ove kriptovalute ne osjeća bezbjedno pri činjenici da ulaže na ovaj način.

Kada je riječ o nivou rizika, on postoji u svim oblicima ulaganja, a što je veći – omogućava i veću dobit. Međutim, kada se govori o zaradi, na najjednostavnijem primjeru cjenovnog raspona između dva ista datuma u dvjema uzastopnim godinama uočava se da ne postoji ni jedan slučaj u kojem na godišnjem nivou nije ostvarena zarada.

Drugim riječima, činjenica da su su dugoročna ulaganja isplativa, a kratkoročna samo zavisno od trenutka, često se zloupotrebljava kao argument u priči o nesigurnosti, zbog čega sa svih strana pristižu savjeti da se ipak treba držati dalje od kriptovaluta.

Sa druge strane, brojni su oni koji uporno pokušavaju da ukažu na nepravilnosti u funkcionisanju ovakvog sistema, kao što to često radi ekonomista Pol Krugman, čuven po brojnim komentarima, ali ne i tačnim prognozama.

Krugman, trijumfujući u trci sa kolegama Edvardom Hadezom i Piterom Šifom u tome kako što glasnije i oštrije kritikovati ono čije vrijeme neminovno dolazi, a što je čuvare tradicionalnog sistema bogaćenja bogatih na kamatama ponuđenih siromašnima uhvatilo nespremne, prvi je počeo da zastupa teoriju da bitcoin ne podliježe svim novčanim principima, zbog kojih mu nema opstanka.

Prema Krugmanovoj teoriji, novac je sredstvo razmjene, čuvar vrijednosti i obračunska jedinica, a bitcoin ispunjava samo prva dva uslova, zbog naglih oscilacija na dnevnom nivou zbog kojih se u kriptovaluti uglavnom ne mogu izraziti cijene u svakodnevnim transakcijama.

Sama teorija načelno nije pogrešna, ali se može primjeniti samo na novac, dok bitcoin to nije, budući da nije pod kontrolom niti jedne centralne banke ili monetarne institucije, već one u pojedinačnim zemljama regulišu mogućnosti njegove upotrebe.

No, da ima prednosti u odnosu na novac govore mikrotransakcije, naročito plaćanja na internetu kod kojih se efikasno mogu unovčiti novčani kapaciteti najmanjih jedinica. Recimo, plaćanja bitcoinom su kao stvorena za naplatu minimalnih iznosa koji u većoj količini predstavljaju zaradu, a onome kome su potrebni donose korist koju ne bi tako jednostavno bilo moguće izraziti novčanim jedinicama.

Na primjer, ukoliko sa svog smartfona želite da omogućite nekoliko sati korišćenja interneta onima koji se u vašoj blizini umreže, lozinku možete dodijeliti recimo uz naknadu u iznosu hiljaditi dio bitcoina, bez obzira na njegovu protuvrijednost u novcu. Sličnu transakciju bi bilo gotovo nemoguće platiti na drugi način, jer sam prilazak bankomatu ili naplatnom šalteru košta mnogo više nego desetak centi koliko vrijedi usluga koju plaćate.

Upravo zbog ovakvih pojedinosti poređenje kriptovaluta i valuta ukazuje da za njihovo funkcionisanje važe različita pravila, ali nikako da to što negdje ne dolazi do podudarnosti ne znači da je sistem pogrešno usmjeren.

Povoljnosti kriptovaluta doći će do izražaja tek kada se njihova zastupljenost proširi izvan opsega onoga što zavisi od odluka pojedinca, odnosno kada na ovaj način sa svog smartfona bude omogućena naplata parkinga, putarine i sličnih javnih usluga kojima transakcioni troškovi imaju veliko učešće u cijeni.

No, samo saznanje da je domovina funte širom otvorila vrata bitcoinu govori mnogo više od navodno stručnih kritika, čija se opravdanost može oboriti najjednostavnijom matematičkom formulom.

Britanija je među rijetkima u Evropi koja se nije prihvatila kratkoročnih trendova koji su kasnije pucali kao baloni, zbog čega je bila i na najmanjem kriznom udaru od svih, posebno u poređenju sa zemljama Evropske unije, a naročito eurozone. A ako razumijemo iz kojih razloga nijesu poželjeli čak ni euro, te sa koliko preračunavanja donose svaku finansijsku odluku, ovo bi mogao biti samo dobar znak.

Bitcoin – satkan od bitova i povjerenja

Posted on March 3, 2014 by Ana Nives Radovic

Brisanje sadržaja na web stranici platforme za trgovanje bitcoinom Mt.Gox izazvalo je paniku kod mnogih koji su se u posljednjih godinu dana uključili u ovaj oblik ulaganja. No, ono što je bilo neophodno pojasniti nakon objavljivanja ove vijesti jeste da obustava rada samo jedne od platformi, bez obzira na njenu veličinu ili istoriju poslovanja ne znači istovremeno i obezvređivanje kriptovalute.

Ovo je i potvrđeno činjenicom da je svega nekoliko sati nakon što je ta informacija odjeknula u svjetskim medijima, vrijednost koju je bitcoin na kratko izgubio ubrzo vraćena, budući da je trajno nijesu mogli oboriti uspaničeni vlasnici koji su požurili da je se brže-bolje otarase. Na cijenu bitcoina nijesu bitno uticale ni izjave japanskog ministra finansija Tara Asa koji je, nakon obustave rada Mt.Goxa, čiji centar je odnedavno preseljen u Tokio, pokušavajući da se ogradi od situacije čiji epicentar je bio u japanskoj prijestonici, poručio da očekuje potpuni kolaps bitcoina.

Takođe, otkako interesovanje za ovaj oblik ulaganja ne prestaje da raste, povećava se i broj onih koji, da bi zadržali naklonjenost moćnika na čelu sistema koji je svjetsku ekonomiju danas doveo pred vrata potpunog kolapsa, umjesto kao tumači i prognostičari više liče na portparole finansijskih centara. Jedna od zabluda koja je javnosti nametnuta u ovakvim centrima, a od koje se uz samo malo razmišljanja moguće razuvjeriti jeste da se u bitcoin trgovini koristi Poncijeva šema, tipična za investicione prevare s početka prošlog vijeka.

Metod koji je dobio naziv po italijanskom prevarantu svodio se na vraćanje uloga sa visokom kamatom u kratkom roku onima koji su investirali, nudeći im mogućnost da ponovo ulože vraćena sredstva kako bi ostvarili još veću zaradu, no taj novac oni zauvijek gube. Kao da već nije dovoljno simptomatično to što ovakvo objašnjenje trgovine bitcoinom imaju branioci postojećih ekonomskih modela koji omogućava bogatima da se još više bogate, a siromašnima da tonu u još veću nemaštinu, kreiranjem modela poput onih kojima se obračunavaju penzije.

Dakle, ako tri i po decenije svojim radom doprinosite penzionim fondovima u velikim iznosima, a od sredstava koja ste uplatili dobijate samo neznatan dio, zar to nije šema čiju valjanost treba preispitivati i gdje se pojedincu vraća neuporedivo manje od onoga što uloži? Očigledno da je borcima za tržišnu pravdu mnogo bitnije pobuniti se protiv činjenice da se za nekoliko decenija epohi bogaćenja na izdacima najranjivijih grupa bliži kraj, zbog čega se svim silama trude da bilo kakav signal koji na to ukazuje prikažu kao obmanu, umjesto da preispituju ispravnost sadašnjih formula po kojima se obračunavaju penzije, porezi ili kamate.

Takođe, često isticana neujednačena promjena vrijednosti bitcoina na dnevnom, sedmičnom ili mjesečnom nivou nikako nije uslovljena garantovanjem zarade ulagačima, baš kao to nije slučaj ni sa svjetskim valutama, plemenitim metalima, naftom ili bilo kojom drugom berzanskom robom čiju promjenu, osim nivoa ponude i tražnje diktiraju i ekonomsko-politička dešavanja u zemljama koje ih koriste kao sredstvo plaćanja ili njima trguju. Među onima koji ulagače pokušavaju da odvrate od bitcoina sve je više i onih koji ističu da on uopšte nema vrijednost, šireći tako još jednu od brojnih zabluda u cilju odvraćanja od ulaganja u kriptovalute.

Netačnost ove tvrdnje je sasvim jednostavno dokazati – iako između vrijednosti i cijene ne stoji znak jednakosti, činjenica da bitcoin nabavljate uplatom određenog iznosa sama po sebi negira ovu tvrdnju. Ono što dalje ukazuje na postojanu vrijednost ove kriptovalute je, da čak i kada bi u tržišnim previranjima i nastojanjima finansijskih centara da je unište njena cijena bila čak i toliko niska da ne bi postoja apoen novčanica svjetskih valuta kojima bi se mogla izraziti bez decimalnog broja, njena vrijednost i bi dalje postojala.

Ovo potvrđuju dva faktora – korisnost i rijetkost. Ako bismo ovo ilustrovali na primjeru čistog vazduha, razumjeli bismo da on ima vrijednost jer je koristan, iako ga ima u izobilju, zbog čega ga ne plaćamo. Međutim, kada bi usljed nekog zagađenja on bio sačuvan samo u posebnim prostorijama, njegova cijena zavisila bi od spremnosti da za ulazak plate oni koji žele da dišu punim plućima.

Podatak da je bitcoina u samom nastanku bila 21 milijarda i da je taj broj usljed obaranja sistema uređaja na kojima su instalirani digitalni novčanici iz dana u dan sve manji, kao i da se on ne umnožava metodom poput doštampavanja novčanica ukazuje na rijetkost koja direktno uslovljava postojanje vrijednosti, a sa čijim porastom raste cijena. Za upravljanje bitcoinom neophodno je i povjerenje u cijeli proces, jer ako u priču ulazite samo na kratko da “okrenete“ novac, možete izaći jedino sa velikim razočarenjem.

(Nastaviće se)

Alternativno investiranje

Posted on January 6, 2014January 19, 2014 by Ana Nives Radovic

Među prvim pitanjima na početku godine koja se tiču biznisa i finansija nezaobilazno je i ono – gdje uložiti novac? Ulazak u novu godinu praćen je željom za novim poslovnim odlukama za koje se savjeti traže na sve strane, ali, kao nikada ranije, 2013. godina je pokazala da većina onih koji dolaze sa, uslovno rečeno, relevantnih adresa, najčešće imaju za cilj da kanališu sredstva u korist malih, moćnih grupa.

Ekspanzija otkupa i kupovine zlata na berzama od sredine 2011. do početka 2013. godine, nakon što je uočen dinamičan rast cijene ovog plemenitog metala, već sredinom prošle godine rezultirala je velikim razočarenjem onih koji su uložili novac. Cijena je počela naglo da pada, spuštajući se ispod one koju je imala krajem juna 2011. kada je zlato zablistalo u planovima i projekcijama dugoročnih investicija miliona ulagača širom svijeta i postao imovina koju više nije bilo moguće prodati ni po cijeni po kojoj je kupljena.

Sa druge strane, signal koji je stigao do trgovaca valutama odnosio se na moguće jačanje američkog dolara, računajući na oporavak ekonomski i dalje najmoćnije zemlje na svijetu. Uzleti dolara su, međutim, bili relativno kratki, pa su zaradu donosili samo uključenima u Forex trgovinu, ali su nepovoljna dešavanja, skokovi cijena nafte, kao i činjenica da se SAD odlučuju na dodatno štampanje novca vrlo brzo prekidali takve trendove.

Kada je u aprilu prošle godine došlo do naglih padova cijene i zlata i dolara, jedan broj hrabrijih ulagača odlučio se za digitalnu valutu bitcoin, čija vrijednost je od tog trenutka počela da raste. Ukoliko ste se odlučili da ga kupujete, o čemu ste i na ovim stranicama već tada i dobili prvi savjet, kraj godine dočekali ste sa najmanje petostruko većim iznosom, međutim, ukoliko ste ostali vjerni dolaru i zlatu, loša iskustva će vas prije ili kasnije natjerati na promjenu planova.

Za izradu novih strategija početak godine je uvijek idealna prilika – pod uticajem ste brojnih osvrta na prošlu i projekcija za narednu godinu, zahvaljujući čemu o investicionim prilikama možete imati nešto širu sliku. Iako izgleda da u protekloj godini ni na valutnim tržištima, niti na robnim berzama nije bilo moguće uočiti bilo kakvo pravilo, ni zakonitost, ali dnevna dinamika trgovanja zlatom, dolarom i bitcoinom bila je gotovo preslikana.

Ulagači, doslovno podijeljeni u tabore za ili protiv trgovanja digitalnom valutom na istovjetan način koristili su tržišne signale i uslovili da većina promjena vrijednosti iz sata u sat oslikana na dnevnim graficima izgleda vrlo slično. Ono što njihove planove povezuje je takođe i činjenica da ne ulažu zbog kratkoročne dobiti, već u nešto što će tek u budućnosti vrijediti mnogo više nego sada.

Trgovce zlatom je u to najlakše ubijediti, budući da se strah od rizika lako uklanja, a ukoliko do njegovog kraha zaista i dođe – sa njim će uvijek nešto moći da se radi, jer će ga uvijek neko željeti. One koji imovinu prenose u američku valutu ohrabruje činjenica da tržište SAD i dalje može da ponudi mnogo toga za zelene novčanice, čak i ako ih niko drugi u svijetu ne bude želio.

Za ulagače u bitcoin otklon od rizika je u činjenici da isti globalni uticaji i jednaka dinamika trgovanja ne uspijevaju da obore njegovu vrijednost u trenucima kada su zlato i dolar pogođeni. No, bitcoin i druge digitalne valute su samo dio onoga što u 2014. može da obezbijedi dobit, a za šta bi se „tradicionalni“ ulagači inače teško odlučili, uvjereni da profitabilnost i bezbjednost ne idu zajedno.

Način da se razuvjerite ovog pravila iz prošlih vremena je da u ovoj godini najmanje trećinu portfolija posvetite alternativnim investicijama – tako ćete se i zaštititi od eventualnog rizika, ali i osloboditi prostor za kreativnost – sopstvenu i tuđu, jer biznis je umjetnost, a umjetnost je biznis – ne samo u ovom spajanju pojmova, već i u investicionom smislu.

Ulaganje u umjetnost moglo bi biti jedno od najisplativijih oblika ulaganja u 2014. godini – prvo, zbog većeg stepena koji ponudu i tražnju čine globalnim; drugo, zbog pravila da vrijednost raste sa vremenom i treće, što je umjetnost jedino što zadržava vrijednost kada je sve drugo gubi. Osim toga, izbor je toliko raznovrstan, a načini ulaganja brojni do te mjere da investicione odluke uslovljavaju isključivo ideje.

Na sličan način moguće je ulagati i u vina. Pored dobro poznate izreke da je vino s godinama sve vrijednije, očekivani rast tražnje u narednim godinama, ali i to što nije riječ o robi čiju cijenu određuju berzanske prilike čini ga idealnim povodom za ulaganje. Alternativnim oblicima ulaganja u prilog ide i činjenica da će situacija na tržištima u ovoj biti vrlo slična prošlogodišnjoj, no ona će potrajati sve dok kamatne stope, naročito u EU i u SAD budu na sadašnjem, niskom nivou.

Njihovo povećanje, kao i ukidanje stimulansa Federalnih rezervi moglo bi, međutim, izazvati nepovoljne trendove na tržištima i pad vrijednosti zvaničnih valuta i berzanske robe – razlog više da ulažete u ono što vam ne stvara brigu oko odluka finansijskih institucija, a sa protokom vremena nesumnjivo garantuje dobit.

Rise to Battle: The Fight for Bitcoin’s Legacy

Posted on April 14, 2013April 15, 2023 by Ana Nives Radovic

Bitcoin, a form of electronic money, has been gaining significant traction in recent years, garnering attention from economists and financial experts worldwide. What was initially dismissed by many as a novel and inconsequential phenomenon has now emerged as a disruptive force in the global financial landscape, with its value skyrocketing to unprecedented levels.

Created as open-source software by an individual or group operating under the pseudonym Satoshi Nakamoto in 2009, Bitcoin operates on a peer-to-peer network, enabling users to conduct transactions without the need for intermediaries, such as banks or financial institutions.

At the heart of Bitcoin’s appeal is its decentralized nature. Unlike traditional currencies that are issued and regulated by central banks, Bitcoin is not controlled by any single entity. Instead, it operates on a distributed network of users who collectively validate transactions and maintain the integrity of the system through a process known as mining. This decentralization, combined with the use of cryptographic techniques to secure transactions, makes Bitcoin highly secure and resistant to fraud and tampering.

Bitcoin’s transaction process is relatively simple. Users send payments to recipients’ addresses using private keys, which are known only to the sender. Each user has a file that serves as a digital wallet, containing pairs of keys, allowing for the secure management of their Bitcoin holdings. Transactions are verified by network nodes through complex mathematical algorithms, and once confirmed, they are added to a public ledger known as the blockchain, which acts as a transparent and immutable record of all transactions.

One of the key features of Bitcoin is its limited supply. The total number of Bitcoins that can ever exist is capped at 21 million, and this scarcity is one of the factors driving its value. As demand for Bitcoin has grown, particularly among investors seeking alternative assets and individuals looking for a decentralized form of currency, its price has soared to unprecedented levels. However, this price volatility has also been a subject of criticism and concern among economists and financial experts.

Economists have traditionally used the functions of money – medium of exchange, store of value, and unit of account – as criteria to assess the viability of a currency. It has also gained attention from institutional investors and hedge funds, who view it as a potential hedge against inflation and currency devaluation.

While Bitcoin does serve as a medium of exchange, allowing users to make online payments, it does not fully emulate the other functions of money. For example, its extreme price volatility makes it less reliable as a store of value and a unit of account. The recent rapid increase in the value of Bitcoin, for instance, does not result in deflation, as classical economics would suggest because its value is not based on a fixed supply or determined by central banks.

Furthermore, Bitcoin’s value is not backed by any physical asset or government guarantee, which has raised concerns about its stability and reliability as a form of currency. Its decentralized and unregulated nature has also been a subject of scrutiny, as it presents challenges in terms of consumer protection, the attempt to prevent money laundering, regulations, and taxation. These issues have led to debates and discussions among economists and policymakers about the potential risks and benefits of Bitcoin and other cryptocurrencies.

Despite the challenges and criticisms, Bitcoin has gained widespread acceptance as a form of currency in various online transactions, ranging from e-commerce to remittances. It has also been increasingly included in investment portfolios, with some institutional investors and hedge funds allocating a portion of their assets to Bitcoin as a hedge against inflation and currency devaluation.

In addition, the underlying technology of Bitcoin, known as the blockchain, has attracted significant attention for its potential applications in various industries beyond finance, such as supply chain management, digital identity verification, and decentralized governance.

The widespread acceptance of the idea of Bitcoin as an alternative form of payment has gained traction among populations worldwide burdened with debts and loan installments, especially during times when currency fluctuations work against their favor. While alternative payment methods have existed before, Bitcoin has captured public interest for entirely different reasons.

With a total current value of more than one billion dollars on the stock market, it has become a prominent topic of discussion in economic circles due to investigations into whether there are hidden intentions to disrupt the entire global financial and banking system. This has led to numerous reviews pointing out the potential dangers and risks associated with Bitcoin, highlighting the helplessness of existing systems in the face of this emerging phenomenon.

Decision-makers in the banking industry are increasingly realizing that their era of dominance in controlling the world’s money supply, often through actions that have caused global crises, is coming to an end. Consequently, there are growing public warnings about suspicious and risky forms of investment. Current trends and the orientation of a large number of market investors indicate a decline in trust in traditional currencies such as the euro and the dollar, accompanied by the announcement of a new, gradual redistribution of wealth driven by citizens’ mistrust of the financial and banking system.

What sets Bitcoin apart and fuels its growing trust among users is that its value is not influenced by the decisions of any central authority, be it political or economic. This revolutionary impact on financial flows is disrupting the traditional power dynamics of the financial elites that have been blamed for creating the financial crisis. The fear of Bitcoin and the highlighting of its potential destructiveness are merely the initial stages of what is anticipated to be a long and intense market battle. It is predicted that those who have caused the most damage to the existing financial system will emerge as losers in this battle, signaling that the time of Bitcoin is yet to come.

As Bitcoin gains traction as a disruptive force in the global financial landscape, economists and policymakers are grappling with the implications of this emerging phenomenon. The decentralized nature of Bitcoin, operating on a peer-to-peer network and not controlled by any single entity, challenges traditional notions of currency and finance. Its limited supply, capped at 21 million Bitcoins, and the use of cryptographic techniques for securing transactions make it highly secure and resistant to fraud. However, its extreme price volatility and lack of backing by physical assets or government guarantees raise concerns about its stability and reliability as a form of currency.

The increasing interest in Bitcoin is also driven by the underlying technology behind it, known as the blockchain. Blockchain has potential applications beyond finance, such as supply chain management, digital identity verification, and decentralized governance, leading to further exploration of its potential benefits and risks. As the global financial landscape continues to evolve, Bitcoin and other cryptocurrencies are poised to reshape the way we think about money and finance, challenging established systems and institutions.

Bitcoin’s acceptance as an alternative form of payment and its disruptive impact on the global financial landscape has gained widespread attention. While concerns and risks associated with Bitcoin exist, its decentralized nature, limited supply, and potential applications beyond finance make it an intriguing phenomenon that is reshaping the traditional notions of currency and finance. As the debate about the future of Bitcoin continues, it is evident that the time of Bitcoin is yet to come, and its impact on the global financial system is still unfolding.

Perperzona

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Tag: bitcoin

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