# This post is also published at Uptrennd under Cryptocurrency and Blockchain #
Crypto currency is a field that has more or less exploded in recent years. Various block chain techniques have been developed and more are under development still. The most common prototype for crypto currencies is of course BitCoin, although it is today only one of a large number of similar alternative currencies. For some time, investments in crypto currencies have been seen as a good long term investments, since the mechanisms involved supposedly provide a more stable exchange value than traditional fiat money. Another tempting factor is the possibility of rapid increases in value, which are based on the limited amount of crypto currency available.
Now the bitcoin is approaching a phenomenon called halving which essentially is a way to keep the value stable over time. Bitcoins are produced (created) using a process called mining. The mining includes using a lot of computing power. During a halving, the effort of creating one (1) bitcoin becomes doubled, i.e., it requires more work to mine the coins. At the end, the amount of bitcoins on the market cannot increase above a certain limit regardless of how much mining we put in. With bitcoin being more difficult to get after a halving, the existing bitcoin is expected to be more valuable. What has happened previous times, is also that there has been a rapid increase in value just after a halving, and this is of course the expectations of today as well. It is, of course, also very likely that it will happen this time as well.
The question I would like to raise here is, however, what we actually know about the financial market as a whole with this expanding field of crypto currencies forming a more and more substantial part of the world economy? What rules apply today? Will the crypto currencies survive in the long perspective (which I think) and what will be their relation to fiat currencies? One aspect of the fiat currencies can be seen in the American economy, where money is “created” by the Federal bank, and sold to the American government for IOUs. Who owns these IOUs? What happens if (when?) the IOUs become too many to be resolved in dollars?
The answer is simple. We don’t know what will happen to the world or national economies in the future. We live in a time which has not been around before, and the best we can do is to guess.
And my personal guess is to not put all your eggs in the same basket!
By the way: one interesting, fascinating and (in my opinion) scary page to look at is the US dept clock:
the numbers displayed here are provided by the federal government. There are links from this page to other national debt clocks, but they are not as detailed as this one…
