Cryptocurrency has managed to disrupt several conventional financial systems through its path-breaking technology. In quite a short time, cryptocurrency has assumed the role of a global phenomenon.
Besides the well-known qualities of decentralization, transparency, and security that crypto brings to the table, a few Cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
Read this Term are also offering positive performance even during global deflation.
Understanding Money Supply in the Context of Fiat Currency
The money supply is different for fiat currencies and their crypto counterparts. For fiat, such as dollars or euros, money supply depends on the monetary policies set by a central bank or government which dictates the amount of money to be printed and circulated in the economy.
Central banks can also take money out of circulation either to repeal old or defaced notes or to decrease the total supply of currency as and when needed.
Changing money supply in the economy thus gives central banks the Leverage
Leverage
In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders need to rely on leverage to make financial trading viable. Generally, the higher the fluctuation of an instrument, the larger the potential leverage offered by brokers. The market which offers the most leverage is undoubtedly the foreign exchange market, since currency fluctuations are relatively tiny. Of course, traders can select their account leverage, which usually varies from 1:50 to 1:200 on most forex brokers, although many brokers now offer up to 1:500 leverage, meaning for every 1 unit of currency deposited by the trader, they can control up to 500 units of that same currency. For example, if a trader was to deposit $1000 into a forex broker offering 500:1 leverage, it would mean the trader could control up to five hundred times their initial outlay, i.e. half a million dollars. Likewise, if an investor using a 1:200 leveraged account, was trading with $2000, it means they would be actually controlling $400,000, i.e. borrowing an additional $398,000 from the broker. Assuming this investment rises to $402,000 and the trader closes their trade, it means they would have achieved a 100% ROI by pocketing $2000. With leverage, the potential for profit is clear to see. Likewise, it also gives rise to the possibility of losing a much greater amount of their capital, because, had the value of the asset turned against the trader, they could have lost their entire investment.FX Regulators Clamp Down on Leverage Offered by BrokersBack in multiple regulators including the United Kingdom’s Financial Conduct Authority (FCA) took material measures to protect retail clients trading rolling spot forex and contracts for difference (CFDs). The measures followed after years of discussion and the result of a study which showed the vast majority of retail brokerage clients were losing money. The regulations stipulated a leverage cap of 1:50 with newer clients being limited to 1:25 leverage.
In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders need to rely on leverage to make financial trading viable. Generally, the higher the fluctuation of an instrument, the larger the potential leverage offered by brokers. The market which offers the most leverage is undoubtedly the foreign exchange market, since currency fluctuations are relatively tiny. Of course, traders can select their account leverage, which usually varies from 1:50 to 1:200 on most forex brokers, although many brokers now offer up to 1:500 leverage, meaning for every 1 unit of currency deposited by the trader, they can control up to 500 units of that same currency. For example, if a trader was to deposit $1000 into a forex broker offering 500:1 leverage, it would mean the trader could control up to five hundred times their initial outlay, i.e. half a million dollars. Likewise, if an investor using a 1:200 leveraged account, was trading with $2000, it means they would be actually controlling $400,000, i.e. borrowing an additional $398,000 from the broker. Assuming this investment rises to $402,000 and the trader closes their trade, it means they would have achieved a 100% ROI by pocketing $2000. With leverage, the potential for profit is clear to see. Likewise, it also gives rise to the possibility of losing a much greater amount of their capital, because, had the value of the asset turned against the trader, they could have lost their entire investment.FX Regulators Clamp Down on Leverage Offered by BrokersBack in multiple regulators including the United Kingdom’s Financial Conduct Authority (FCA) took material measures to protect retail clients trading rolling spot forex and contracts for difference (CFDs). The measures followed after years of discussion and the result of a study which showed the vast majority of retail brokerage clients were losing money. The regulations stipulated a leverage cap of 1:50 with newer clients being limited to 1:25 leverage.
Read this Term of handling monetary crises by allowing more free flow of currency, controlling lending interest rates, and influencing purchasing power.
This also gives central banks immense power and control over various aspects of the market, frequently benefitting corporate interests more than the welfare of the common man. It is the money supply that leads to either inflation, disinflation, or deflation in the economy, affecting price levels and other economic prospects.
What is Deflation?
Talking in macroeconomic terms, deflation is a decline in the general price level. It is the opposite of inflation; put simply, it enables people to buy more with the same banknote.
It is important to understand here that prices can decline for a variety of different reasons, such as low levels of productivity in the economy, technological advancements, or even decreased demand levels.
Contrary to the general perception that price decline is a good thing, economy-wide price fall in the form of deflation is bad news. Deflation leads to greater purchasing power, which seems momentarily enticing.
However, in the long term, it can lead to inevitable recession and tough economic times. Deflation also impacts employment and income, interest rates, and spending.
Why are Economists Afraid of Deflation?
Economists are afraid of deflation because of its potential to make debt relatively expensive. This kickstarts a downward spiral because lower interest rates lead to fewer loans and hence lesser new money, thereby putting even more pressure on monetary deflation and so on.
But on a deeper look, it becomes clear that this problem due to deflation arises only because fiat currency is flexible. This is exactly what some cryptocurrencies are providing relief from.
The cryptocurrencies Bitcoin, Prophecy, BOMB, and SINOVATE have a deflationary model, unlike many other cryptocurrencies which have essentially infinite maximum supply.
Apart from users losing cryptos by sending them to non-compatible addresses or losing the password to their wallet, these cryptos allow users to voluntarily burn their coins.
This helps drive deflationary properties by systematically reducing the total circulating supply, and helps to retain as well as augment the market density of these currencies.
Cryptocurrencies that Have No Problem with Deflation
Bitcoin has a cap of 21 million coins in existence, and follows a gradually reducing emission rate to ensure users that there will never be any sudden increase in supply, or “supply shock”. Prophecy has an in-place contracting supply model of Burning to stabilize demand. BOMB has kicked off a trend of Ethereum-based deflationary tokens, ensuring that 1% of all tokens used are destroyed in every BOMB transaction.
SIN system economy’s utmost goal is fighting emissions while incentivizing the users. The circulating supply of SINOVATE has not increased in 2 years.
At the same time, as the circulating SIN coin supply decreases, the selling pressure for the digital asset also weakens on the open trading market.
The SINOVATE project has implemented the Proof-of-Burn (PoB) mechanism to burn the coins used for the collateral whenever users set up a new masternode.
The SIN System Economy (SSE) consists of:
- Burning all the transaction fees in the network.
- Burning all the governance proposals and voting fees.
- Burning the collateral coins of the Infinity Nodes.
- Burning all the decentralized cloud fees.
As a result, the instant circulating supply depends on network equilibrium between coin emissions and load of the ecosystem. More network utilization here means less circulating supply and vice versa, which means growth equals scarcity on SIN coins.
What these cryptocurrencies have essentially made clear is that deflation is a problem only in the world of pyramid money.
The decentralization and reduction in emission rates together with the feature of burning make these cryptocurrencies more suitable for the masses and not just corporates.
Proponents see limitless potential because these cryptocurrencies do not just remain unaffected by global deflation but also offer a viable solution to the deflationary spiral.
Cryptocurrency has managed to disrupt several conventional financial systems through its path-breaking technology. In quite a short time, cryptocurrency has assumed the role of a global phenomenon.
Besides the well-known qualities of decentralization, transparency, and security that crypto brings to the table, a few Cryptocurrencies
Cryptocurrencies
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the networks which are used to authenticate blockchain technology. Cryptocurrencies can be thought of as systems that accept online payments which are denoted as “tokens.” Tokens are represented as internal ledger entries in blockchain technology while the term crypto is used to depict cryptographic methods and encryption algorithms such as public-private key pairs, various hashing functions, and an elliptical curve. Every cryptocurrency transaction that occurs is logged in a web-based ledger with blockchain technology.These then must be approved by a disparate network of individual nodes (computers that maintain a copy of the ledger). For every new block generated, the block must first be authenticated and confirmed ‘approved’ by each node, which makes forging the transactional history of cryptocurrencies nearly impossible. The World’s First CryptoBitcoin became the first blockchain-based cryptocurrency and to this day is still the most demanded cryptocurrency and the most valued. Bitcoin still contributes the majority of the overall cryptocurrency market volume, though several other cryptos have grown in popularity in recent years.Indeed, out of the wake of Bitcoin, iterations of Bitcoin became prevalent which resulted in a multitude of newly created or cloned cryptocurrencies. Contending cryptocurrencies that emerged after Bitcoin’s success is referred to as ‘altcoins’ and they refer to cryptocurrencies such as Bitcoin, Peercoin, Namecoin, Ethereum, Ripple, Stellar, and Dash. Cryptocurrencies promise a wide range of technological innovations that have yet to be structured into being. Simplified payments between two parties without the need for a middle man is one aspect while leveraging blockchain technology to minimize transaction and processing fees for banks is another. Of course, cryptocurrencies have their disadvantages too. This includes issues of tax evasion, money laundering, and other illicit online activities where anonymity is a dire ingredient in solicitous and fraudulent activities.
Read this Term are also offering positive performance even during global deflation.
Understanding Money Supply in the Context of Fiat Currency
The money supply is different for fiat currencies and their crypto counterparts. For fiat, such as dollars or euros, money supply depends on the monetary policies set by a central bank or government which dictates the amount of money to be printed and circulated in the economy.
Central banks can also take money out of circulation either to repeal old or defaced notes or to decrease the total supply of currency as and when needed.
Changing money supply in the economy thus gives central banks the Leverage
Leverage
In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders need to rely on leverage to make financial trading viable. Generally, the higher the fluctuation of an instrument, the larger the potential leverage offered by brokers. The market which offers the most leverage is undoubtedly the foreign exchange market, since currency fluctuations are relatively tiny. Of course, traders can select their account leverage, which usually varies from 1:50 to 1:200 on most forex brokers, although many brokers now offer up to 1:500 leverage, meaning for every 1 unit of currency deposited by the trader, they can control up to 500 units of that same currency. For example, if a trader was to deposit $1000 into a forex broker offering 500:1 leverage, it would mean the trader could control up to five hundred times their initial outlay, i.e. half a million dollars. Likewise, if an investor using a 1:200 leveraged account, was trading with $2000, it means they would be actually controlling $400,000, i.e. borrowing an additional $398,000 from the broker. Assuming this investment rises to $402,000 and the trader closes their trade, it means they would have achieved a 100% ROI by pocketing $2000. With leverage, the potential for profit is clear to see. Likewise, it also gives rise to the possibility of losing a much greater amount of their capital, because, had the value of the asset turned against the trader, they could have lost their entire investment.FX Regulators Clamp Down on Leverage Offered by BrokersBack in multiple regulators including the United Kingdom’s Financial Conduct Authority (FCA) took material measures to protect retail clients trading rolling spot forex and contracts for difference (CFDs). The measures followed after years of discussion and the result of a study which showed the vast majority of retail brokerage clients were losing money. The regulations stipulated a leverage cap of 1:50 with newer clients being limited to 1:25 leverage.
In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders need to rely on leverage to make financial trading viable. Generally, the higher the fluctuation of an instrument, the larger the potential leverage offered by brokers. The market which offers the most leverage is undoubtedly the foreign exchange market, since currency fluctuations are relatively tiny. Of course, traders can select their account leverage, which usually varies from 1:50 to 1:200 on most forex brokers, although many brokers now offer up to 1:500 leverage, meaning for every 1 unit of currency deposited by the trader, they can control up to 500 units of that same currency. For example, if a trader was to deposit $1000 into a forex broker offering 500:1 leverage, it would mean the trader could control up to five hundred times their initial outlay, i.e. half a million dollars. Likewise, if an investor using a 1:200 leveraged account, was trading with $2000, it means they would be actually controlling $400,000, i.e. borrowing an additional $398,000 from the broker. Assuming this investment rises to $402,000 and the trader closes their trade, it means they would have achieved a 100% ROI by pocketing $2000. With leverage, the potential for profit is clear to see. Likewise, it also gives rise to the possibility of losing a much greater amount of their capital, because, had the value of the asset turned against the trader, they could have lost their entire investment.FX Regulators Clamp Down on Leverage Offered by BrokersBack in multiple regulators including the United Kingdom’s Financial Conduct Authority (FCA) took material measures to protect retail clients trading rolling spot forex and contracts for difference (CFDs). The measures followed after years of discussion and the result of a study which showed the vast majority of retail brokerage clients were losing money. The regulations stipulated a leverage cap of 1:50 with newer clients being limited to 1:25 leverage.
Read this Term of handling monetary crises by allowing more free flow of currency, controlling lending interest rates, and influencing purchasing power.
This also gives central banks immense power and control over various aspects of the market, frequently benefitting corporate interests more than the welfare of the common man. It is the money supply that leads to either inflation, disinflation, or deflation in the economy, affecting price levels and other economic prospects.
What is Deflation?
Talking in macroeconomic terms, deflation is a decline in the general price level. It is the opposite of inflation; put simply, it enables people to buy more with the same banknote.
It is important to understand here that prices can decline for a variety of different reasons, such as low levels of productivity in the economy, technological advancements, or even decreased demand levels.
Contrary to the general perception that price decline is a good thing, economy-wide price fall in the form of deflation is bad news. Deflation leads to greater purchasing power, which seems momentarily enticing.
However, in the long term, it can lead to inevitable recession and tough economic times. Deflation also impacts employment and income, interest rates, and spending.
Why are Economists Afraid of Deflation?
Economists are afraid of deflation because of its potential to make debt relatively expensive. This kickstarts a downward spiral because lower interest rates lead to fewer loans and hence lesser new money, thereby putting even more pressure on monetary deflation and so on.
But on a deeper look, it becomes clear that this problem due to deflation arises only because fiat currency is flexible. This is exactly what some cryptocurrencies are providing relief from.
The cryptocurrencies Bitcoin, Prophecy, BOMB, and SINOVATE have a deflationary model, unlike many other cryptocurrencies which have essentially infinite maximum supply.
Apart from users losing cryptos by sending them to non-compatible addresses or losing the password to their wallet, these cryptos allow users to voluntarily burn their coins.
This helps drive deflationary properties by systematically reducing the total circulating supply, and helps to retain as well as augment the market density of these currencies.
Cryptocurrencies that Have No Problem with Deflation
Bitcoin has a cap of 21 million coins in existence, and follows a gradually reducing emission rate to ensure users that there will never be any sudden increase in supply, or “supply shock”. Prophecy has an in-place contracting supply model of Burning to stabilize demand. BOMB has kicked off a trend of Ethereum-based deflationary tokens, ensuring that 1% of all tokens used are destroyed in every BOMB transaction.
SIN system economy’s utmost goal is fighting emissions while incentivizing the users. The circulating supply of SINOVATE has not increased in 2 years.
At the same time, as the circulating SIN coin supply decreases, the selling pressure for the digital asset also weakens on the open trading market.
The SINOVATE project has implemented the Proof-of-Burn (PoB) mechanism to burn the coins used for the collateral whenever users set up a new masternode.
The SIN System Economy (SSE) consists of:
- Burning all the transaction fees in the network.
- Burning all the governance proposals and voting fees.
- Burning the collateral coins of the Infinity Nodes.
- Burning all the decentralized cloud fees.
As a result, the instant circulating supply depends on network equilibrium between coin emissions and load of the ecosystem. More network utilization here means less circulating supply and vice versa, which means growth equals scarcity on SIN coins.
What these cryptocurrencies have essentially made clear is that deflation is a problem only in the world of pyramid money.
The decentralization and reduction in emission rates together with the feature of burning make these cryptocurrencies more suitable for the masses and not just corporates.
Proponents see limitless potential because these cryptocurrencies do not just remain unaffected by global deflation but also offer a viable solution to the deflationary spiral.