A Lil’ Bit a Coin – A Lil’ Bit a Crazy

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If you've had your head under a financial rock lately or have just returned from a vacation in Saint-Tropez, then you have reasons not to have seen the news, heard the bragging or for some – the dazzling d & # 39; a new means of financial transactions. This is called the "coin". The most exciting thing to hit the popular economy since the “ subprime bubble '', the Internet Sock puppet or the Dutch Tulip Bulb Mania.

Believers or outgoing

There are of course doubts, even in the face of irony: that even though the Internet has affected almost every part of our lives as promised, it has done little to affect traditional trading assets commercial.

This is neither the place nor the space to explain how the coins became, how they are extracted, the complex mathematical algorithm behind their control or how they both exploded worth one day and tumbled the next day. Let it be said, with people like Bank of America Merrill Lynch calling bit coins a "potential means of payment for electronic commerce (an important market in today's commerce) and who could even become a serious competitor of Traditional money transfer providers, "as Dick Bove at Rafferty Capital Markets states in a note to clients," This is not the last and there will be other more refined approaches, but will not make no mistake, one or more digital currencies, which are not controlled by governments, are coming. "I wish I had said that!

Enter JP Morgan

One of the largest banks and asset management companies in the world has applied for a patent strangely similar to bit coins. You have to take this into account and as Bove adds: "This will be a factor in the evaluation of certain banking products linked to the payment system."

Coin prices

In 2011, the value of a one-bit coin quickly dropped from around $ 0.30 to $ 32, before falling back to $ 2. Then on November 19, 2013, the value of the coin in bit on the mont. Gox's trade climbed to a high of $ 900 following a meeting of the United States Senate where it was announced that virtual currencies were a legitimate financial service. There were around 12 million pieces in bits in November 2013.

Pizzas and ATMs

There are already pizzerias in New York ready to take coins for a 10 "pepperoni and ATMs that ask if you prefer your cash or coins – coins. The market for these is Even the Winklevoss twins, these boys involved in brushing during the founding of Face Book, have taken a major position in currency.

But not my CPA A friend

No. He absolutely believes it is a scam. I point out to him that his technological capabilities barely extend beyond Skype, and he doesn't have a Twitter account to call his own, but "Technology be damned" is his opinion. And yet it is both public opinion and the economic significance of what constitutes money that will determine the acceptance of currencies.

Any item, coin, gem or device that is widely accepted as a form of third party exchange – that is, other than direct barter – and that has the means to "hold value "Is money. Now the value can go up or down, as we often hear about manipulations of foreign and domestic currencies, but the "currency", be it the US dollar, the euro, gold, etc. For example:

The purchase of Manhattan Island from the Native Americans for glass pearls valued at 24 Dutch guilders in the 19th century, valued at $ 24 at the time, and of 1000 USD today.

So, who is right?

It will take a while to find out if Dick Bove, Bank of America, JP Morgan and all the thousands of speculators are right or if my friend CPA finds himself with the last laugh. Meanwhile, I remember the song by Johnny Mercer (1940), sung by people like Frank Sinatra, Elvis Presley and even Ricky Nelson … "Fools Rush In"

"Fools rush where wise men never go,

But the wise never fall in love,

So how will they know. "


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