Month: July 2021

Money and Its Effects

Money is a social commodity, the basic definition of which is “any of various things that are typically accepted as payment, not necessarily exchange, for goods and services.” Money is used for trade, investment, and for the transfer of wealth from one person to another. Money may be considered to be a societal good in that it serves the purposes of all other goods and services; it has been said that without money, there would be no markets, no jobs, and no security. On the other hand, money may be viewed as a form of private property, depending on individual or state laws. For instance, money can be privately owned by a person or group and transferred through a variety of legal means.

Money has been used as a medium of exchange since antiquity, when the world was largely composed of nomadic tribes. Nomadic individuals are not tied to any place or schedule, and they are always on the move, searching for new lands to farm and to trade with other tribe members. The only medium of transaction they are not required to use is barter, which involves the transfer of goods, usually livestock, for the goods of other individuals. Because of this very mobility, goods are often exchanged on a very regular basis, usually within a day or two. This established the basis of money as a medium of exchange, a process through which goods are transferred from one hand to another in exchange for a specific amount of food or other goods.

Modern cryptography has taken this fundamental principle and transformed it into a highly complex system of digital currency. Through the use of digital signatures, or biometrics, users of certain currencies are able to transact with ease, allowing for secure, near-frictionless exchanges of money. Cryptocurrency, or virtual currency, has grown tremendously in popularity, especially in recent years as more businesses have come to realize the need to securely transfer their value from one place to another.

A good example of this is the way that certain companies will buy raw materials and sell them to other businesses, at a certain price per unit. In a fiat economy, such a practice would be impossible because goods and services would be priced with a commodity as a good, be it gold, silver, oil, or whatever. Through the use of a fiat money system, however, businesses can develop a market for their goods and services by establishing a medium of exchange that cannot be manipulated by any central authority. For instance, when a warehouse sells goods to a retailer, the retailer marks up the price of the goods in order to make a profit, and no matter how much the warehouse sells its goods for, the retailer will still make a profit.

However, the sale of goods through a fiat currency system can only occur if there is a functioning financial system, and the only thing that ensures this is a functioning financial system is a trusted government. Therefore, it is not surprising that when the general public hears the term “fiduciary media” they assume that such systems are used in the exchange of currencies. The truth, however, is that most transactions in the realm of money substitutes are not done through fiduciary media. For instance, you can tell a lot of people that you will pay X amount of dollars for a stock, but what you do not know is that if you were unable to receive the stock due to economic circumstances you would not be able to sell it, thus, you would not be able to make money on your sale.

Such situations occur all the time all over the world. When goods and services are bought and sold through a fiat monetary system like the United States dollar or the Euro, there is no way for anyone to determine what the value of such goods and services are. There is only a medium of exchange, which can be manipulated by a central bank, which is the Bank of England, or the Bank of Japan, or the Central Banks of India and Switzerland. If you wish to exchange one currency for another, you need to work with a central bank that has a printed currency that can be trusted. However, digital currencies such as the Digital Goods Exchange (DGE) do not have a printed currency, but rather they are issued through a peer to peer system of computing.

Understanding The Nucleus Of Financial Institutions


Understanding The Nucleus Of Financial Institutions

Financial finance is a broad term encompassing things regarding the science, development, management, and accumulation of financial assets and liabilities. The world of finance is huge and complex, making it difficult for many people to get a clear picture of what it actually encompasses. One way that people can learn about the world of finance is by taking a basic course in finance. Courses in finance give students an overview of the world of finance and teach them the skills they need to become successful investors. There are many different types of courses in finance, including general principles of finance, cycle time analysis, asset and liability economics, financial portfolio analysis, business finance, public finance, banking, venture capital, derivatives, and more.

General principles of finance are essential to understanding financial markets and businesses. Principles like investment grade bonds yield higher interest rates, buy-and-hold investments offer stability, and lending rates are linked to inflation. All these things are necessary to understand the world of finances. Another aspect of general principles of finance is the concept of cash flow. Cash flow is the future expected income from the sale or ownership of assets. Cash flows come in different forms, such as current cash flows, savings, income from leases, income from capital gains, and more.

The third main aspect of understanding the world of finance is understanding banking. Banks are institutions that provide monetary loans and other financial products to businesses and individuals. Banks acquire financial goods and services through loans. There are two major types of banks: savings and traditional banks, which use checking accounts, money market accounts, certificates of deposit, and other financial products, and bankers, which do not use checking accounts, money market accounts, certificates of deposit, or other financial products.

Some of the major banks in the United States are Bank of America, Chase Manhattan Bank, Wells Fargo Bank, CitiBank, Branch Bank, Wachovia Bank, Fleet Bank, Key Bank, Branch Bank, Sun Trust Bank, Trust & Savings Bank, HSBC Bank, U.S. MasterCard, Bank of New York, Wells Fargo Bank, Fleet Bank, Sun Trust Bank, CDBC Bank, PNC Bank, Chances Bank, Sun Belt Bank, BBVA Bank, Fifth Third Bank, Lasalle Bank, MBNA America Bank, Fifth Third Bank, Sunbelt Bank, Stone Street Bank, Merchants Bank, MBNA Europe Bank, Sun Belt Bank, New England Bank, Stone Street Bank, Branch Bank, National Association Bank, Branch Bank, City National Bank, Key Bank, Branch Bank, and others.

The United States government regulates all banking transactions. United States federal law specifically provides for the registration of all banking institutions and all banking services. All United States banks act as legal intermediaries and provide banking services to all persons wishing to purchase, sell, or trade financial products. This system is called orderly fashion or uniform commercial code. All United States banks follow this system of supervision to guarantee fair and smooth functioning of their financial activities.

The role of a financial institution in the economy is to ensure secure access to cash and easy accessibility of monetary instruments such as credit. All financial institutions offer a wide range of financial products including currency exchange, traveler’s checks, GIC’s (General Ledger, Treasury bills, mutual funds, bonds, etc), depositary receipt systems, wire transfers, bill payment systems, credit card systems, ATM machines, direct deposit, bank reconciliation systems, overdraft facilities, and online banking. They also provide investment advice and market surveillance on vital market sectors. Many financial institutions engage in the business of providing commercial lines of credit. They use this facility to extend credit to their customers. A wide range of products and services are offered by financial institutions to cater to the needs of all kinds of customers.

The Basics of the Over-The-Counter Stock Market

A stock market, equities market, or share exchange is an association of buyers and sellers of shares, that collectively represent ownership interests in organizations; these can include publicly traded securities on a regulated exchange. The buying and selling of such securities take place at a pre-set price on a regular basis and can be bought or sold through a broker or online at any time. There are many types of exchanges, some of which are listed below. These include the over-the-counter market, Over-the-Counter Bulletin Board (OTCBB) market and Pink Sheet market.

The OTCBB is a relatively new type of stock market. It was developed in the early nineties and since has grown to encompass a number of different nations and currencies. Many new names have been given to the various exchanges, but they all basically function on the same basic principle. Members of the exchange trade stocks that are listed on the OTCBB for a pre-set price. Investors in these stocks may buy and sell as they see fit during the trading session.

A public market provides immediate liquidity, allowing small investors to quickly and easily access shares on the business they are interested in. Because of this accessibility, it has often been called the world’s largest stock market. Public equities are available in almost every type of industry, with everything from oil and gas to computer equipment and publicly held equity stocks accounting for most of the market value of publicly traded companies.

The Over-the-Counter Market (OTC) is a large and constantly expanding market consisting of over-the-counter options, penny stocks and other types of securities that are traded between brokers and individuals on an exchange. With so many choices, this is one of the best ways for new investors to get into the stock market. Options, a kind of investment vehicle where the initial financial risk is low, allow the potential investor to gain some financial security without putting up any initial capital. When the value of the option is less than the initial investment, an investor makes a profit.

Shares on the Over-the-Counter Market are traded on futures exchanges and are not traded on major exchanges such as the New York Stock Exchange or the NASDAQ. This aspect of the market allows buyers and sellers to skirt the costs of trading exchanges by trading shares without actually having to purchase the actual shares. This has made it popular with younger investors who do not want to commit to a large amount of money upfront and are happy to ride the stock market until the time is right. However, many savvy investors use the OTC market as their primary means of trading, as well as shorting and trading stocks. These techniques have earned millions for those who can successfully apply them.

While the over-the-counter stock market may seem appealing to new investors and veterans alike, both must be wary of the potential dangers. Brokers and dealers can be a double-edged sword, as they often work in tandem with investment banks to orchestrate trades and provide advice. Because of this, it is very important that you work with only the most trustworthy brokerage firms and dealers.

The Essentials Of Money

Money is an abstract idea; money is also a concrete thing. Money is any verifiable account or agreed document that is normally accepted as payment of debt repayment by specific individuals and/or companies, for products and/or services and payment of taxes, including tariffs, in a specific country or socio-cultural context. Money has been a central factor in all economic activity since the earliest times, probably before recorded history itself.


Money has four main functions in the world economy: as a key term in the trade, as a commodity in barter, as a measure of value and a medium of exchange. Money is neither a commodity nor a fixed entity. A commodity is something that can be easily substituted for money, for example, gold. A fixed entity, on the other hand, is a physical object at stake, for example, a house or a ship. The definition of money as a commodity money and its characteristics of being a medium of exchange are explained below.

Commodity money is a standard of value by which a market industry may identify the relative values of goods. It is a standard of worth that can be used to facilitate trade between parties to the industry, for example, between producers of commodities and consumers of commodities. Commodity money is usually issued by governments as a unit of account. Its use as a standard of value has made it the most commonly used standard of measurement for international trade.

Money as a medium of exchange plays a key role in the processes of trade. The buying and selling of goods take place through the use-value of money. Money facilitates exchanges between different goods and services on the basis of their relative value. Money, therefore, facilitates exchange transactions on the basis of their use-value as money. This also means that money can serve as a commodity and as a standard of value, and that it can be the medium through which commodities are exchanged.

In modern times money has become the highly relied-on pre-requisite for the functioning of modern economic systems. Money is the means through which goods and services are exchanged in the market. The importance of money is exemplified in the manner in which transactions between private individuals are primarily executed through the use of money. Without money people would not be able to perform monetary systems. And since money forms the foundation of all markets, barter systems are developed to make the use of money more effective.

Barter is a form of economy in which goods and services are exchanged directly without any intermediary. Barter is a practical and economical way of economy in which the exchange of goods takes place directly between two parties to the transaction, in which neither of the parties has a specific advantage over the other. Money serves as the medium through which barter exchanges take place. Money, besides being a medium of exchange, is a good medium through which the market for the underlying commodities can be accessed by individuals.

Financial Accounting Basics – A primer on the three major components of accounting!


Financial Accounting Basics – A primer on the three major components of accounting!

Financial markets are the marketplaces where investors trade securities based on their future potential value. Financial markets include financial markets such as corporate bonds, mutual funds, individual stocks, mortgage-backed securities (commonly referred to as mortgages), insurance, and a variety of international markets. The word “financial” comes from the Greek word “fiscus”, which means “money”. Financial markets are the largest and most liquid marketplaces in the world. It accounts for about 80 percent of global trading activity.

The basic function of financial markets is the allocation of capital between different objectives. Financial markets also provide information needed by other market participants to determine investment strategy, monitor the performance of financial portfolios, and make investment decisions. While most of these activities are typically carried out by large banks, they are also used by investors, both corporations and individuals, for purchasing and selling mutual funds, creating various accounts, borrowing money, securing loans and receiving payments, etc.

The three main categories of financial reporting are the balance sheet, income statement, and statement of cash flows. All three provide the financial information necessary to assess and analyze the health of the company. All of these reports include information that can affect the value of the company. Companies’ balance sheet, in particular, provides information to management concerning current assets, current liabilities, and expected future profits and losses.

A cash flow statement, which includes the balance sheet, income statement, and cash flow statement, is the first in a financial analysis of the company. This represents a company’s most recent period of operation. The statement shows how revenue earned and expenditures were collected. It also shows if the company had any special or one-time expenses during the period of time. All of these items are reflected in the company’s net income.

Income statement, which is the second part of a financial statement, represents an income statement that summarizes the company’s net income. It includes all of the company’s income categories, and their balances. Also included are all of the company’s revenue sources. The companies’ profit and loss margin are the third parts of this statement. All of the financial statements will be consistent with generally accepted accounting principles (GAAP). Many individuals do not have knowledge of all the terms used in GAAP, therefore it is recommended that they receive training on financial accounting.

There are specific accounting standards that must be followed when creating financial statements. Most professional financial organizations will have specific standards that must be followed. The accounting methods that are used will depend on the type of financial statements that are being created. All financial statements will be consistent with generally accepted accounting principles (GAAP).

Penny Stocks Is Not Always the Best Way to Invest

A stock market, stock exchange, or share exchange is an arrangement in which investors purchase shares of ownership in companies. These can include publicly traded securities on the major exchanges such as the New York Stock Exchange (NYSE) and the NASDAQ Composite. On these exchanges investors are able to buy shares directly from the company for a set price. A company’s stock may also be traded in a secondary market such as the Pink Sheets. A buyer’s market is one in which there are more buyers than sellers.


The primary goal of the Securities and Exchange Commission (SEC) is to regulate trading and maintain orderly bidding and asking prices for securities in the stock market. They do this through a variety of rules and procedures. Some of these involve controlling liquidity by making it easier for a security to be bought and sold quickly. Other rules limit the number of shares that can be traded per customer and institute minimum closing prices for securities. While these rules were created to serve the general public, the recent financial crisis showed that these rules are no longer necessarily beneficial to the average investor.

There are two types of over-the-counter (OTC) stock exchanges: Over the Counter Futures and Over the Counter Speculation. OTC futures are standardized markets where trading is done primarily through telephone communications. OTC speculation is an informal system of trading where companies trade their stocks for wagers. Many companies that offer OTC stocks use their own trading system instead of relying on centralized exchange systems. In some instances, companies also offer bi-lateral contracts that allow companies to make money off of stocks of other companies.

Over the counter stock markets are open twenty-four hours a day and seven days a week. This gives small, inexperienced investors the opportunity to purchase shares at peaks not available during traditional business hours. Additionally, during the stock market’s slump, OTC stocks are often the only way to gain exposure to the market at a reasonable cost. These same investors would be unable to obtain the same price or volume if they attempted to buy the same shares in a mainstream, over-the-counter market. In addition, OTC shares are often less expensive, offering penny stock investors the opportunity to purchase large amounts of shares at a fraction of the cost of larger companies.

Because these stocks are purchased as an Over the Counter item, it is difficult for most brokers to give advice to individual investors. Because the market is not well regulated, many brokers will charge high fees for advice. Many investors may decide not to trade OTC stocks because they fear high brokerage fees may prevent them from receiving a substantial profit.

On the other hand, there are benefits to investing in Over the Counter shares as well. Because the costs of trading are lower than those of larger companies, it allows investors to speculate on the health of the stock market and to create a part time or full time income from it. Since trading occurs over the internet and does not require the same overhead as trading on a major exchange, the majority of penny stocks will never receive a formal listing by the NYSE and will never be traded on a major exchange.

The Nature of Money


The Nature of Money

Money is the most basic need of people in all human societies. Money is any verifiable document or asset that generally constitutes payment of obligations for goods and/or services and payment of debts, including taxes, in a specific nation or socio-cultural context. In its simplest form, money is a bundle of cash that has been issued under the law of ownership. It is considered legal tender and in the legal sense, it is always convertible into legal tender (in the case of currency) when required.

The modern era of globalisation has seen major changes in the function of money. Several mediums of exchange have evolved such as stocks, futures and options, securities, derivatives, central banks, paper notes and computerised monetary instruments. All these have had a profound impact on money as a medium of exchange. One such example is the development of stock markets in numerous countries and the adoption of a variety of trading systems such as the London interbank offer, the ISX, the EFT and futures market.

Barter transactions are usually accompanied by the concept of peer to peer lending. These have enabled the evolution of financial services such as loans, credit, settlement and the provision of goods and services, which are now easily accessible through the Internet. Online bartering has facilitated direct online sales and purchases of goods, services, commodities, assets and services to third parties with lower costs. This form of online sales has increased over the past few years, due to the evolution of web technology, and the opening up of new information and communication systems.

Money is not only a medium of exchange in everyday life but also in the complex systems of deferred payment and cross margin trading. Deferred payment occurs when an investor gives an order to buy or sell a stock or commodity, and the order is not acted on until a later date, typically within one day. Cross margin trading, on the other hand, involves the commission of broker dealers who buy or sell shares of stock or currency from their clients and then hold these shares for an extended period of time. The sale of these shares in the open market by brokers to investors could create a margin call, which is an order that requires an additional amount of money upfront to the broker in exchange for the agreed exchange of shares between the buyer and seller. These transactions take place in the same way as those of a traditional stock exchange, whereby the buyer pays the seller, and the seller then pays the buyer.

Money is also a medium of exchange in the context of market-determined money. Market-determined money is normally a physical commodity such as gold, silver, wheat, pork bellies, bank notes, or currency. These goods are usually bought and sold in predetermined quantities, at pre-decided prices, and only during specified hours. This type of money is commonly used as a global money transfer mechanism; however, it can also be converted into various other foreign currency types, including the domestic ones. It can be traded for goods and services on the commodities market, over the Internet, or through wire transfer.

Money may be defined as the value that is transferred between parties in future transactions between them. Money is a standard unit of account in all civilizations, and in all nations, since the earliest times. Modern economic theory suggests that money is a powerful agent of change, capable of influencing human actions through its use-value, which varies according to the relative scarcity and demand for the good that will exchange hands. Money, therefore, is not a physical object but a process of exchange that depend on the use-value of goods for the function of being a medium of exchange. As such, money-marketplaces often facilitate future transactions that may involve complex financial instruments such as futures, options, and currencies.

Financing For Business – Part 2


Financing For Business – Part 2

Financial planning is a broad term for things about the science, development, management, and policy of finances and financial investments. The discipline of financial planning covers many different topics such as savings and investment, budgeting and debt, estate planning, investing in business, taxes, and even estate. The topic is broad and the scope is tremendous. This is one area of study that will always be in demand because people need to know how to manage their finances. Whether you are young or old, this is an important part of your life that needs to be planned properly. If you are going to get a good job with a good income then financial planning is an important skill that you must master.

Financial management is a discipline that you learn in a classroom that is supervised by professionals. For instance, a person getting a Master’s degree in Business Management would go into banking. A person getting a Master’s in Accounting would go into business accounting. These individuals can also open their own firm specializing in finance. A business on its own does not provide financial services; therefore, people looking for such services would do well to hire someone to manage their finances. This is where the role of banks and financial institutions comes in.

The main functions of financial institutions are to offer loans, buy securities (such as corporate bonds and corporate stocks), and invest in assets. They can also help with retirement plans like saving, investing, and distributing benefits to employees and retirees. In addition, they are institutions that work to improve the economy. They facilitate the movement of capital through lending programs. As for investment banks, they deal with the borrowing of funds by corporations and central authorities, the issuance of securities (such as corporate bonds and corporate stocks), and working to create economic policies that will benefit the whole nation.

The two main components of modern financial management are interest and capital management. Interest is what pays the interest on loans and makes sure that the financial management process goes on smoothly. Capital is what enables a corporation or company to produce its goods and services. Therefore, capital in itself is not necessarily a bad thing. However, excessive capital can inhibit growth, innovation, expansion, and overall financial welfare of a company or organization.

The first article in this series discussed the basics of financial economics. The second article looked at some of the most important areas, including theory and practice of financial economics. The third article looked at three related areas: investment risk management, corporate finance, and financial economics analysis. The fourth article looked at four more areas: political, legal, organizational, and behavioral issues. The fifth article looked at some current hot topics in financial economics, which are currently of increasing interest to both academics and layman alike.

This series has looked at some of the key players in modern financial management. They include investment banks, corporate finance managers, wealthy individual investors, government finance agencies, central banks, monetary authorities, international institutions, and creditors. In order to get global economic growth going again, these key players need to find new sources of growth-sustaining investment projects. One of the ways of doing that is through the commercial banking system. Other ways of getting the funds to such projects include borrowing from a variety of sources, including private lenders, issuing commercial paper, or using bank owned property as collateral.

Penny Stock Brokers

A stock market, stock exchange, or bond market is an arrangement where different participants or buyers pool their money so that they can purchase shares of a company. These may include securities registered on a centralized public stock exchange, namely a depository. Other types of stock markets exist such as the option market and the futures market. These have become very popular due to the high degree of trading and speculation that goes on in them. In order for one of these markets to be called a stock market, it must contain equities, options, bonds, or a combination of both.


There are two basic types of stock markets: Over-the-counter (OTC) and open-outcry markets. The difference between the two is that OTC markets are traded over the counter, whereas open-outcry markets are not. OTC markets are traded via telephone or through computer software. OTC trading is more convenient since it can take place at any time and anywhere, whereas open-outcry markets are regulated by the Securities and Exchange Commission (SEC). OTC stocks are also cheaper than those listed on stock exchanges.

Over-the-counter trades are done via direct communication between brokers and traders. An investor can visit any online stock trading website and place orders without the aid of a broker. The ease and convenience of OTC trading have attracted many new investors who are looking for growth opportunities on the basis of lower expenses and faster execution. However, some people have turned their back on OTC stock exchanges in favor of centralized exchanges like the New York Stock Exchange (NYSE) or the NASDAQ because of stricter regulations and less freedom for price movements. Others prefer the direct communication between brokers and investors over the internet.

OTC stocks offer various advantages to investors. For instance, they are less liquid so they can be purchased and sold quickly, oftentimes within minutes of the market opening. Investors can purchase shares as low as 5 cents each and hold them for several days without needing to obtain a certificate of deposit. Because the costs of trading are low, most penny stocks will pay off in a few weeks, even if they are initially sold for less than their true market value. Moreover, an investor can choose to buy and sell a multitude of stocks without waiting for the business to become truly public, unlike penny stocks on national exchanges that must follow the guidelines of an SEC-approved list of registered securities.

There are two types of shares available on the open market: Over-the-counter (OTC) and Over-the-counter securities (OTC). An OTC stock is a stock that is not traded on a major exchange. Some well-known OTC stocks include notes, forward contracts, swaps, single stock shares, and warrants. An investment bank or brokerage house typically offers a variety of OTC shares to its clients.

A sticker is a company that trades in securities that are listed on the Over-the-counter Market. An Stocker has higher costs than an OTC broker because they are required to purchase the shares from a large buyer; the costs are then spread out between the buyers. The cost of buying shares from an OTC broker is based upon the amount of commission the broker charges per trade and may vary between shares and other fees. However, a sticker will offer lower costs per share because the market cap of the company’s securities is much smaller than the price of shares on the OTC.

How STOREnergy Can Make You Money?

What is a stock market? A stock market, stock exchange, or mutual-fund stock market is an establishment where investors buy and sell shares of stock in companies. These typically include securities listed on a publicly traded stock exchange, or a futures exchange. A mutual-fund stock market is an association of individual investors that invest in a fund; there is a fund for each asset category.

How does STOREnergy make money? Storenergy takes advantage of the fact that stock markets all over the world are open at any time. Because of this, people who are interested in buying shares can take advantage of the many opportunities available at any hour. When someone buys a security at the beginning of the day and then purchases more shares during the evening hours, they can realize short-term gains. During the course of the trading day, when everyone is closed up, the profits from all the buys are spread out over the different hours.

STOREnergy also makes use of the fact that different stock exchanges have their own opening and closing times. For instance, the NYSE (New York Stock Exchange) typically opens two hours earlier than the London Stock Exchange. Because of this, it is easier to take advantage of trades happening in different times of the day.

Why should an investor buy into STOREnergy? The primary reason why STOREnergy is so interesting is that it uses a unique mathematical formula to determine the best times to buy individual stocks. This mathematical model outperforms the simple moving average by approximately four percent. Because the algorithm is so effective, the performance of the STOREnergy stock market has been remarkably accurate.

Besides STOREnergy, another way to make money from the stock market is by purchasing shares of other people’s shares. By purchasing shares of other people’s shares, investors help themselves to profits as the prices of their own shares go up and down. The downside to this technique is that it requires a lot of patience. An investor can’t possibly purchase shares everyday; typically, at least one week must pass before an investor can profit from his or her purchases.

There are other ways to make money on the stock market aside from buying shares of other people’s stocks. Investors can invest in mutual funds that hold a wide assortment of different stocks. These mutual funds give investors the opportunity to choose only those stocks that they think will perform positively. As long as these stocks show a positive return over time, they will be worth buying because they are a good investment.

Money – The Role of Bank Accounts, Money System, And Forex Markets

Money is money. No matter what it is in the form of – dollars, pounds, credits, traveller’s cheques or even packs of cigarettes – it is essentially money. In its simplest form, money is any verifiable financial document or product that is normally accepted as payment for services and goods and settlement of liabilities, including taxes, in a specific country or socio-cultural context. Although money may be regarded as a commodity in the same way that food is a food or clothes are clothes, money is legally a highly treasured legal tender, issued by governments and private institutions for the payment of debts and accrued interests, and as a highly valuable and highly readable product. This highly tradable product can be represented by various different types of money including banknotes, coins, bank deposit notes, bank membership slips, secured banknotes, negotiable coins, bills, coins of different countries, foreign currency, invoice of exchange and travellers’ cheques.

Cryptocurrencies are no different to other tradable goods in that, like food and clothes, they are purchased and sold on the market and their value is determined by their supply and demand in society. However, unlike other tradable goods and currencies, which are always bought and sold at a pre-agreed cost, cryptosporters typically operate on an exchange based on the principle of relative value. Because no central body governs the supply, level or exchange of currencies, these commodities are subject to highly dynamic and unpredictable market prices, which means that this form of trading is inherently unstable and risky.

The exchange rate of any particular asset is also subject to fundamental factors such as economic growth and inflation. Market participants then use these factors to adjust the supply of money in the market. This results in changes in the present value of future transactions (the price of future purchases). To ensure that the present value of future transactions remains constant and accurate, use-value must be constant as well.

Many critics argue that the contemporary use of money substitutes, including paper notes and digital currencies, are not backed by any asset that can be secure and safe enough to cover future losses. This is because, unlike physical assets, money substitutes do not have any underlying tangible or intangible value that could be converted or pledged as collateral. For example, digital money does not carry any real weight in the real world. It is worth nothing and cannot be converted or bartered for another thing. As such, these are not truly money substitutes that would guarantee the protection of our savings and investments.

As aforementioned, both physical and digital commodities are highly uncertain and intrinsically risky in terms of their present or future values. Because of this, no one can make a guarantee regarding their purchase or sale in a money system. In fact, even if there were, the present value of such commodities would be impossible to determine. For instance, what was the price of oil in 2012? How will we know if the price of oil in twenty years from now is much more than $200 per barrel? There are no fundamentals dictating the future value of money.

As an alternative to this problem, money substitutes can be obtained through a process called fractional reserve banking. In fractional reserve banking, financial institutions use a fraction of their overall assets (usually at a “bignium”) to facilitate all monetary exchanges. This serves two purposes. First, it increases the amount of money in circulation, which causes inflation. Second, it allows banks to create large amounts of money that they are able to sell quickly to consumers in exchange for physical money, creating more inflation.