Digital currencies and coronavirus

4 mins read

With the infusion of dollar-printing then the pending passage of a $2 trillion stimulus package, the fate of paper money is on the road to a rapid end.

Turbulent is a mild word to describe the unstable global stock markets during the Covid-19 crisis. The more sobering fact is that markets will continue to bewilder. However, there is a silver lining. Digital currency is not an if, or a when, it is here.

Since the beginning of the year, markets have plunged five times. While central banks attempt to stop the bleeding, financial experts say that its temporary cure will also cause greater hemorrhaging in the world’s economies. 

“We have come up with a very real crisis,” researcher, Alasdair Macleod, explained to RT news. “And that false level of value in financial assets as a whole is beginning to fall apart; the Fed is losing control,” he went on. 

What Macleod and others are pointing to is the Federal Reserve lending money to nations for low-to-no-interest rates. For the response to February’s crash, the Federal Reserve lowered the “target range for the federal funds rate by 1/2 percentage point, to 1 to 1‑1/4 percent.” But, the next month would take a worse turn. In March alone, the world’s markets dipped or plummeted on the 9th, 12th, and 16th. By mid-March, the pandemic began to gravely impact economies across the globe; so much so, the Feds decreased the funds rate “to 0 to 1/4 percent.”

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rom an economist’s lens, this is called, maintaining a false level of value in government securities. Because of low interest rates, the central banksthe Federal Reserve, the International Monetary Fund and the World Bankare lending nations money without interest then printing money without any backing. This actually devalues money. 

For the US, the value of the dollar has decreased dramatically since the 2008 crash. However, the US government takes that borrowed money from central banks then lends it to major financial institutions. Later on, they buy back the banks’ debt to make it appear that the dollar has value. 

Moreover, the US uses the same fiat money or dollar-printed bills by the Federal Reserve to buy back the debt from the bank. This strategy is similar to a snake eating its tail, which is an ancient Egyptian symbol called the ouroboros. Like the ouroboros, the purpose of the Feds and the US markets are to renew life. But, currency will be different on the other side of this shit. 

“By the end of this year we should not be surprised to find that not only has the whole industry of financial assets collapsed, but the fiat currencies have gone with it,” said McLeod.

Perhaps fiat money, or paper money will linger after the end of the year; however, a shift in currency is coming soon. So what does that mean? Gear up.

Preparing for the financial shift

Get your own cryptocurrency wallet. What’s a wallet? It’s an app that holds your cryptocurrency. After you open up your own wallet and accounts, now you can buy cryptocurrency and move it around.

For instance, I use Bitpay to buy Bitcoin, Ethereum and Ripple. Then you can withdraw fiat dollars from the ATM via your BitPay account. Another wallet is Edge, an app that you can use that just deals with buying and moving an unlimited amount of cryptocurrencies.

What is cryptocurrency? 

Cryptocurrency, also called a token, is an internet-based currency and payment that does not require banks to process payments. Unlike other traditional currency, the central bank does not hold cryptocurrency because it is developed and given value online through what is called cryptography, or algorithms.

The concept of digital currency began circulating around 2008, right after the United States’ economic crash. Online communities worked to find solutions to avoid the deep financial loss experienced by millions. In unveiling what led up to the crisis, it was discovered that banks were at the center of the economic plunge; and people grew tired of the institution’s monopoly of money and how it flows.

Along with rethinking the role of banks in financial transactions, the economic crash prompted people who lost access to sustainable amounts of cash to experiment differently with exchange systems such as bartering.

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Online users transferred this system into the virtual and began digital bartering. According to the popular story that circulates around the creation of the first cryptocurrency, is a man by the name of Satoshi Nakamoto who put forth the idea of a form of digital currency called Bitcoin, which was introduced in 2009 and in 2010 started at US $0.09.

Now that Bitcoins and cryptocurrency has taken off, one Bitcoin is worth $6,869. You want to know a sobering fact. I learned about Bitcoin when it was $50. It was 2010. I told my wife about it and my desire to invest. She scoffed. She’s not laughing anymore.

Of course, the transfer of one monetary system to another takes time, but with the Covid-19 health crisis, things are moving rapidly. I suggest that you are in place for the switch then playing catch up. 

The other side of my Bitcoin story is that I didn’t trust my gut when it was $50. Instead, we bought two $50 Detroit homes and lost them in a year to back taxes and liens from the previous owners. Eventually, I bought into Bitcoin when it was priced at $400. I put in $40 dollars. It turned into $500 at the height. I’m ready now. You should be too.

Duane Reed researches currency and market investments; and dibble dabbles in news and travel.

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