Cryptocurrencies: The way of the future?

okay well here's a question for you what's in your wallet money is evolved over the centuries from shells to gold to paper to plastic and these days it's gone digital now you've probably heard of Bitcoin before an alternative cryptocurrency that exists entirely on the internet bitcoins value has skyrocketed over the past year it is well beyond the general public's affordability at this point but for those of you looking to get into the newest financial revolution known as the digital economy worry not litecoin has been called the silver – bitcoins gold former Google employee an MIT graduate Charlie Lee invented the currency to correct some of bitcoins flaws it's grown over 400% in the past week and it is still more affordable and abundant than Bitcoin now despite crypto currencies growing popularity in the public no nation has adopted this type of currency to date so are these currency is just a flash in the pan or is this the economic future of the world I had a chance to sit down with Yanis varoufakis he's author of the global Minotaur who started off by explaining the differences between bitcoins and litecoin it's a bit like shale gas in relation to oil it's the porter cheaper brother what is the number one feature of litecoin is that its price is not skyrocketing yet so if you are a late entrant into the Bitcoin community even you have to fork out a thousand bucks for one Bitcoin whereas litecoin is at a very early stage of its bubble let's say so you know it is cheaper to get in and hopefully to be one of the early entrants that become the aristocracy of this new cryptocurrency now our like we need Bitcoin in competition with one another yes indeed they are but this is absolutely inevitable isn't it Bitcoin started from nothing and those who entered early are now sitting on nominal assets that are worth a great deal in terms of fiat money at least and it was quite natural that once you know the price of bitcoins exceeds a certain level there will be competitors there will be other communities that evolve that emerge and they try to achieve the same kind of bubble status and benefit from it and I'm glad you brought up through this this a kind of conversation about the amount of money that Bitcoin costs right now I want to take a look at how the markets have been reacting to Bitcoin now this past January Bitcoin was trading at about $13 by the beginning of this November it was worth $200 and then by Thanksgiving it was almost $1,200 before dropping back down again now Bitcoin is so popular at the moment that it briefly overtook gold and value but gold throughout the years has remained stable and it has remained it dependable meanwhile something like tulips for instance shot up in the market and then really dropped so my question to you is what do you think being an economist what is more likely to be the outcome of Bitcoin are we gonna see the the gold scenario or are we gonna see the tulip scenario Bitcoin is marketed as a kind not you know a flower like tulips supposedly its utility has to do with the fact that it enables transactions to take place across borders costlessly it is supposedly a currency that is the libertarians wet dream in the sense it's not controlled by a central bank or a government however what percentage of bitcoins in circulation are utilized in order to purchase goods and services it's a rhetorical question the answer is a miniscule amount which means that as a means of exchange Bitcoin has very little use therefore the conclusion from this train of thought is very far more like a chilli then it is like a gold coin so is it possible to see a Bitcoin bubble kind of erupting in the near future given those charts that we just showed showing this shot up in the stock market the only way that Bitcoin late entrants are not going to lose their shirt is if it coins somehow magically becomes a genuine currency that is if the goods and services that one can purchase using it suddenly expands massively and people start using it a lot more as currency then you would it would be possible to see a bit you know Bitcoin value would be maintained sustainably but I see no evidence of that so my simple math well let me simply tell you what I'll do we had a stash of bitcoins which I don't I would sell them that's very interesting that that you would sell them and it's a very telling kind of sign now one of the major differences between litecoin and Bitcoin are the fixed points that the two companies have light coins a fixed point is around 84 million coins bitcoins fixed point is around 21 million coins so what company has the better model in your opinion do to that affordability I don't think that is the main difference because it really doesn't matter how many bitcoins or light coins are multiple what matters is that there is a fixed supply that what matters is that in both these cryptocurrencies the ultimate limit is given it's fixed and it's commonly known and the rate which these coins are minted is more or less predictable that's what makes that's what gives create scarcity and therefore allows these communities to develop in a way that resembles gold gold market the problem with this is that with any currency which is based on a fixed supply whether it's gold bitcoins or light points is that effectively if it succeeds in acquiring white views across the world as a genuine means of exchange by definition this current is going to be deflection because their quantities fix doesn't matter it's 20 million or 80 million as long as it is fixed and the rate of English in the money supply is always going to be lower at some point than the rate of increase in the production of goods and services then the number of these units of currency per unit of goods or service is going to be shrinking and that will mean the tendency for an economy that uses these currencies towards deflation and the second problem is of course and you know a social justice issue like we've seen in Bitcoin if you entered Bitcoin the Bitcoin market or community in a year or two years ago then you mean it's a bitcoins very very cheaply that now are worth an arm and a leg so there is an aristocracy that is built in and a fundamental division between the early adopters and the late entrants very interesting thank you for breaking this down we're going to see how we're going to have to see obviously how nations respond to this no nation is currently backed up a cryptocurrency as an alternative to fiat money but it might happen in the future who knows Yanis vodka Fitz is a author of the global Minotaur

28 thoughts on “Cryptocurrencies: The way of the future?”

  1. Just look at these suckers in the comments LOL ! 5 years have passed, today bitcoin is 8K.
    Idiots who listened to Yanis Varoufakis must be very "thankful" for his advice to miss 800% growth.

  2. BItcoin is going through a bubble if you look into how it works (which i have only done slightly). The way in which it is runs now means it won't be able to work for an average user pretty soon. Apart from the pricing bubble (which will burst), you then have the to download a copy of the block chain (this is a record of every transaction  every made within Bitcoin between 2009 to present day). This block chain is growing rapidly and it will eventually mean that the average user will not be able to use it. They will have to completely change the entire structure of how bit coin works which will more than likely make it regulated due to those changes. This will mean that the niche in it's market (it's not controlled through the 'system') will not exist etcetera. I've been told by the source that i got this information from that, as a short term investment it should be absolutely fine but longitudinally in some way the prices are nearly guaranteed to drop, so based on that watch what you do. I personally think bit coin is a far more productive system than the one we have today for many reasons, for example even if it was more regulated it's not really possible to apply fractional reserve lending to it as a currency which makes it allot more efficient. Still peace out : ).   

  3. Wait!!!…. that word…."created by former Google employee"

    You just know that this guy is secretly building the bitlite for google to take over in the future, then they got your savings lol imagine google being your bank lol

  4. Ωχχχχ ατσααα και στο RT ο Βαρουφακης…
    Αναβαθμιστηκαμε βλεπω

  5. lol, this guy has no idea what he's talking about. ltc is different from btc in that ltc has faster transaction rates and better mining technology along with several other things.
    also, bitcoin can now be used to buy gift cards from gyftdotcom which has digital gift cards for your smartphone (app) or computer. they have amazon cards (anything  you could ever want), target, jcpenny, wholefoods, footlocker, zappos and many more. gyft gives you 3% off if you use btc too!
     plus, the new snapcard allows you to buy anything from any store on the internet directly with bitcoin for a 2% fee.
    and you can always get cash for btc or paypal transfers or bank transfers or moneypaks for btc.

  6. 100,000,000 dollars worth of bitcoins was stolen just a few days ago and ain't nobody getting that money back. The only people who seem to care about this are the people who were robbed and some users on reddit.

  7. Bitcoiners: If you give me your real tangible stuff,I will give you the answer to a rare and complex math problem that only special computers can solve.
    LOL you can't make this shit up.

  8. What about QuarkCoin? Supposed to fix the problems with BitCoin & LiteCoin. CPU mining only, larger float for increased liquidity so people will spend them instead of just hold them.

  9. 1. Make your own currency
    2. Encrypt it with your own encryption algorithm
    3. Sell it to the suckers who think it's valuable
    4. ???
    5. Profit

  10. Plastic is not money. Neither is paper currency. Plastic cards are denominated in fiat paper currencies. 

    Gold and silver are monies because they have all the functions of money including being a long-term storehouse of value.

    Digital currencies are currrencies, not money.

  11. this will not work at the begging they say buy now you get a lot of money  but stock of it drop down 50- 75% to worth noting at all and this is a rose to buy them they say worth a lot of money but the next day it just gong to be data waste and scrap people do not buy in to this bs it going to wast and destroy your money don't even buy into it!

  12. Bitcoin has gained in nominal value but the market is so thin if any one of the bitcoin millionaires ever placed a large enough sell order there wouldnt be enough volume to absorb and its price would tank… Most are just holding and speculating for a higher fiat price..I love the idea but I believe bitcoin will only be great in conjunction with the banking industry not outside of it

  13. This man has a good perspective.  I like the concept of Bitcoin but he does clarify some important limitations.

  14. Crypto-currencies cant be traced we dont need this Bit-coin millionaires computer are being hacked & stolen bit-coins > The Venus Project > natural Resources based economy using HEMP …..Everybody will be RICH in 3-5 years , Also Growing HEMP eliminate Carbon, green house gases from the Atmosphere in 5-10 years …

  15. Virtual currency bitcoin has been recognized by the German Finance Ministry as a “unit of account”. Does that mean it can be used for tax and trading purposes in the country?
    Bitcoin is not classified as e-money or a foreign currency, the Finance Ministry said in a statement, but is rather a financial instrument under German banking rules. It is more akin to “private money” that can be used in “multilateral clearing circles”, the Ministry said.
    “We should have competition in the production of money. I have long been a proponent of Friedrich August von Hayek scheme to denationalize money. Bitcoins are a first step in this direction,”said Frank Schaeffler, a member of the German parliament’s Finance Committee, who has pushed for legal classification of bitcoins.

  16. It's not "Around 21 million" It is fixed at 21 million also it has nothing to do with the stock market. Other then that skinny chick did a decent job. 

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