Category Archives: Personal Finance

How to Build Real and Sustainable Habits For Health, Wellness and Finance in 2019

When people tell me that 2019 is going to be their year, I have to laugh and roll my eyes. Isn’t that what everyone says? When I think seriously about how 2019 will be different, I ask myself these questions, “what did you do last year and why was it not a good year for you? What will actually be different about this year? Are you not happy with yourself? Could you be better? Are you actually going to change?”

Personally, I try to maintain a level of discipline in certain areas of my life. Over the past couple of years, I have remained focused on my goals despite circumstances changing and other challenges I face daily. Yes, each year is different, each year has a different mix of people surrounding you or different locations, but the common denominator is always the same. You. Knowing I only have control of myself in life and the choices I make, I approach resolutions in a slightly more strategic way. Before the year begins, I will set an expectation of exactly how I want to finish the year; a vision that I can revisit whenever I want to. This vision will be within the realm of possibility, but will require specific behaviors and routine changes to achieve. These routines become the foundation for the resolutions I set. They will be purposeful, actionable and measurable. I like to, as they say, “beat the market” year after year. The market being a normal progressive way of life. Whether my goal is to make more money, travel to new places, meet new people or upgrade my quality of life, I am always striving to improve.

The main way I work to ‘beat the market’ and improve my life is through altering my habits each month. Building positive habits throughout the year is a great way to make sure you ultimately achieve personal growth and embody the vision you had for yourself at the start of the year. Even small changes to your daily routine can have tremendous effects and snowball to improve other areas of your life.

Every year we all make resolutions and try to “stick to them.” But the reality of the matter is carrying out these resolutions can be daunting and feel impractical. but my method is much more sustainable for me. I try and make it into a game. So instead of making 1-2 resolutions at the start of the year, I will make 3-4 mini goals/resolutions at the start of each month and focus only on those habits/goals for the 30 days. This is a way of tricking my brain to build a strong new habit and become a better person. Grooming myself to be better and hold myself to a higher standard. I read the book the “Power of Habit” by Charles Duhigg and it takes 21 days to build a habit so 30 seemed right on par.

Instead of setting a vague resolution, for example, “get fit in 2019,” a better goal would be to specify and implement three new habits that would help to make you more fit. For example, set your alarm a half hour earlier in the mornings, drink 8 glasses of water every single day, and do (3) 1-minute planks every night. Some of the goals can be more focused toward self improvement as well. Its a collection of little things that make big changes in your life. If you can make them attainable and more specific the better. Here are some examples from my first three months.

January:

  • Only 1-cup of coffee per work day (black, no sugar, or milk)
  • Finish every shower by turning the nozzle to pool temp (supposedly much better for your body, it gets easier every day I promise)
  • Read 10 pages every day.

*It’s march and I already drink much less coffee and don’t even mind that it’s black with nothing added, I feel much healthier. Showers are cold in the winter but I barely mind it now. I read every single day much more than 10 pages a day, it’s an ingrained habit now.

February:

  • Make my bed every single day
  • Drink a glass of water first thing in the morning
  • Complete 100 calf-raises every night while I brush my teeth
  • Eat a vegetable every single day

Some month-long habits I plan to implement this year:

  • Give up “candy” for 30 days
  • “Pool temp” showers every day for a month
  • 8 glasses of water every day for 30 days
  • Pack lunch for 30 days instead of buying lunch
  • Make bed every day (psychologically, a groundbreaking feat for your day)
  • Lay your clothes out every night for the next day
  • Give away thirty pieces of clothing, one article for every day of the month
  • “No spend days.” These are days where you spend “zero” money during the day, no cash purchases and no charges to the credit card. See how many you can get a month.
  • Meal prep for 30 days
  • Take a vitamin every day, especially those that you are lacking in. I take Vitamin D every single day.
  • Get in bed by 10:30p on weekdays, 1-2a on weekends.
  • No alcohol for 30 days, or you can do “no beer”
  • Be active every day for 30 days jog/bike/gym
  • Communicate with someone from your past, 30 different people in 30 days
  • Track your finances for 30 days, income and expenses every single day. (I’ve been doing this for almost three years)
  • Not going shopping for 30 days
  • Stay below or above a certain weight for 30 days
  • Keep your room/house at an acceptable standard of clean for 30 days.
  • No TV for 30 days
  • Follow the stock/real estate market for 30 days

Many of these small habits, can develop into lasting, Keystone habits. Keystone habits provde the foundation for how you live your life and provide a stable foundation for building and adding new habits. The best way to make big changes your life is to make small changes. It’s been about three months since I’ve started doing these new, mini habits and I have already started to notice my life changing a positive changes. I hope this post will inspire you to take action with your own life and get the results you really want. Best of luck!

7 Financial Lessons from Ancient Babylon

I just finished reading the book, the Richest Man in Babylon. This is a short book of probably 150 pages in a decent sized font. The book was written by a college professor in the 1800’s, it was all about stories translated from texts of the ancient city of Babylon. The most interesting take away from the book is that the stories, even though they were written 100s of years ago, are still relevant to many of the financial issues that we as people, millennials especially, continue to face today. The book is about a man named Arkad, who was the richest man in Babylon, even richer than the King. The King sought to find the reasons as to why he was so independently wealthy, so he invited him in for an interview to understand what he learned. In this passage, I will cover some of the lessons and issues they brought up, and show you how they are still relevant today.

Lesson One: ‘Fatten Thy Purse’

One of the first lessons of the book and I believe is the most important is to pay yourself first. How can you expect to be a wealthy man if you do not have any priority of savings in your life? If a man receives 10 pieces of gold a year he is to keep at least 1 of them for himself and adjust his expenses accordingly. We can utilize this same method today by using an extremely powerful financial tool called the 401k or 403B. You can adjust this amount to come right out of your paycheck, Pre-tax or Roth, so the savings are out of sight and out of mind. Trust me, after a while you won’t even realize this money is affecting you because you will naturally adjust your expenses to what you can afford based on the lesser amount. Now what you have to be careful of is the credit card trap. With lines of credit, you still need to save 10% of your wealth but you cannot overspend on credit so that your net worth becomes meaningless.

Lesson Two: ‘Control Thy Expenditures’

This means if you are always buying the best most delicious food, the nicest robes and the finest horses you will have no money left over for creating wealth. What this translates into is if you are buying the latest Apple products, the newest Gucci loafers, always going on vacations or living above your means in a luxury apartment you are not saving because you are spending. The money is going into your pockets then leaving immediately. One of the biggest lessons of the rich is the concept of ‘frugality’. This goes along with another lesson that being wealthy is as simple as spending less than you make. A very simple concept but hard to put into action with the distractions that life throws at us these days. Advertising and credit cards make spending the easiest thing in the world.

Lesson Three: ‘Make Thy Gold Multiply’

The story goes on to give the laws of gold. This would be to put the savings you have(the 10%) into action by investing in smart investments to earn more money. He talks about them as your children and they will have children and multiply. This will make you a very rich man. These investments could be investing in a jeweler, traveler, salesmen, sword makers and in return set up a profit structure to get paid a return plus a rental of money fee also known as interest in this day and age. Today we can invest in things such as real estate, bonds, stocks, funds, gold, commodities etc.

Lesson Four: ‘Guard Thy Treasure from Loss’

Just as Warren Buffet put it, the name of the game is, “never lose money.” Whether that is safeguarding your smart investments, minimizing risk, adding “stop losses” to your trading account, or “protecting your pouch of silver from thieves and foreign armies.”

Lesson Five: ‘Invest in Your Dwelling’

Owning real estate is a great way to build equity and wealth where you live. Every mortgage payment is a way of paying yourself first so that one day you can refinance or sell the property for its future value. This also works well if you live in the property. The value will increase as well as paying down the debt.

Lesson Six: ‘Insure a Future Income’

One of the worries the ancients of Babylon had was that when they get old and tired they will not be able to work as hard and provide for their family. They can mitigate this by ensuring future income when they are older. Making part of your investments long term will help with this. Something we can do in this day in age I invest in long term funds or bonds that we will be able to sell when we retire and live off of the sale of the assets. Or a long term real estate holdings as an investment property. Either way, you want to be prepared for when you are no longer able to work effectively and provide for either yourself or loved ones.

Lesson Seven:  ‘Increase Thy Ability to Earn’

Once you have mastered the other lessons it is essential that you increase your wage as to multiply the lessons and become richer. Everyone has something that they are good at and the point is to find that skills and act on it to increase wealth for something that pays the most. If you have a job you need to figure out how to outperform as to get promoted or if you are a business owner how can you increase sales or product lines to bump up your income.

It is crazy to think that these lessons are still relevant in this day and age. When Babylon was uncovered from the sand, archeologists found ancient rock texts with these parables. You see them today to build your wealth as the ancients did in civilizations a long long time ago.

Reference:

https://www.entrepreneur.com/article/249179


Want A Raise? Start looking at your Diet!

Eating vegetables and eating healthier is similar to getting a raise! I cut my grocery bill in half, while also still being incredibly healthy. Sometimes you can be incredibly frugal in your life by looking at some of your mindless purchases that you make at the supermarket.

What I’ve have been realizing more and more since I turned 28 is the fact that we as humans do not need a whole lot to survive. When you are a millennial living in a big city, you have an endless amount of things surrounding you that influence every thought. Whether it’s the things that your friends are doing or buying to what you should be eating when you go grocery shopping or how you should be eating whether its ordering seamless or following your co-workers to an expensive salad place for lunch. One of my goals for 2019 or resolutions was to not eat any lunch out during the work-week. In order to do this I was going to have to take my diet a lot more serious and learn how to cook a wide variety of things to sustain a healthy and low cost budget. We all have goals in life, why let expensive food get in the way of those goals.

The first things that i realized is that cooking is work. Whether its learning how to cook perfect rice, learning what foods go together and getting your timing down so all the food is ready around the same time. If you want to be good at something you are going to have to try and fail and keep trying. I almost always have a base of rice, farrow, lentils or my favorite “chickpea Pasta”. In terms of saving money Dave Ramsey always advocates for the “rice and beans diet” They are full of protein and will fill you up. The best part is that you can get a lot of basic food for a cheap price.

The second thing that I do is add a small amount of meat, turkey, pork, chicken or ground beef. Then the third part is to add a huge mix of cooked vegetables that I buy raw. Simply raw vegetables are some of the cheapest foods you can buy at the grocery store usually coming in around $1-3/lb. These are also the foods that are going to be the best for you. If you can make a couple meals at one time and spread them out during the week you can save a whole lot of money on food and living expenses.

After reading the book “how not to die” I realized the simple truth that a lot of the healthiest foods you can buy are also the cheapest. I started eating onions, zucchinis, kale, beets, Carrots and potatoes and my overall grocery bill went down significantly. At first last year I was paying $600/ month on food and groceries (Manhattan) after really trying to work my diet I got that bill down to $200-$250/month. This took a lot of practice meal prepping and being very disciplined. With how many options there are in NYC it’s easy to grab some quick hot food or hit up the local Duane Reade.  

List of Some of the cheapest Vegetables as well as some of the healthiest choices that i incorporate into my personal diet every week.

  • Lentils
  • Kale
  • Beets
  • Canned beans Pinto/Black
  • Chickpea Pasta
  • Bananas
  • Potatoes
  • Peppers
  • Carrots
  • Broccoli
  • Farro

Another tip: Water, Drink tons of water. It is the best liquid you can drink and will help replenish your body when it is thirsty. I was buying 2 cartons of almond milk (lactose intolerant) and it was costing me a fortune. One day I just stopped buying it and just drank water instead. I started feeling better and was saving $9 a week. After a few weeks I started noticing a drastic difference, my meals were averaging $4 a meal compared to a $15/work lunch and a $10 dinner. I was able to start saving loads of money from my paychecks, and in-turn investing more.

Everything You Need to Know About Cryptocurrency Regulation

Originally posted on UpCounsel by Gary Ross.

The meteoric rise of cryptocurrencies has taken the world by storm. Innovators, investors, users, and governments are scrambling to wrap their heads around cryptocurrencies and the blockchain technology that they rely upon. The emergence of a new market and business model has created great opportunities for participants, but it also carries significant risk.

Cryptocurrencies present an inherently unique challenge to governments because of their new technology, cross-jurisdictional nature, and frequent lack of transparency. Governments are struggling to develop new ways to regulate cryptocurrencies, adapt existing regulations, and identify fraudulent schemes. Cryptocurrencies and their regulations are evolving before our eyes, and this article will provide a brief background on cryptocurrencies and an overview of where cryptocurrency regulations currently.

What are cryptocurrencies?

Cryptocurrency is, by any other name, a currency—a medium of exchange used to purchase goods and services. Or, as some have suggested, cryptocurrency is a “peer-to-peer version of electronic cash.” However, this currency has two qualities that distinguish it from traditional bills and coins.

First, cryptocurrency is a virtual currency that is created through cryptography (i.e. coding) and developed by mathematical formulas through a process called hashing. Second, unlike traditional bills and coins that are printed and minted by governments around the world, cryptocurrency is not tied to any one government, and thus is not secured by any government entity. The fact that cryptocurrencies are not secured by a government authority has led to concerns from critics that this is the second coming of Tulipmania, because we are ascribing value to an otherwise valueless item. However, the potential for cryptocurrencies as a medium of exchange remains enormous.

What is blockchain?

Blockchain is the technology at the heart of most cryptocurrencies, and explaining the technology in detail would require a blog post of its own. What is important to know is that blockchain is a record of peer-to-peer transactions categorized into blocks on a distributed ledger. Despite the obtuse terminology, blockchain functions similarly to a local bank authorizing and recording a transaction, but instead of only one party holding the entire ledger book, the transactions are recorded communally by member nodes, with each node being a computer in a peer-to-peer distributed network.

The blockchain can confirm a transaction within minutes, removing errors that exist when trying to reconcile and audit separate ledgers and transactions. Whenever a transaction takes place, the miners on the blockchain develop a new hash and digital signature to update the ledger and create a new “block.” This block, or recorded transaction, is time-stamped and encrypted and will remain on the blockchain for life.

Regulation in the US – Utility Tokens v. Investment Tokens

In the United States, there has been no federal regulation of cryptocurrencies. Instead, cryptocurrencies are often grouped into two non-binding categories: (1) investment tokens that fall under the purview of already existing U.S. securities laws like the Securities Act of 1933 and the Securities Exchange Act of 1934, and (2) utility tokens, which remain largely unregulated (for now).

Security Tokens

Whether the tokens being offered in connection with a particular cryptocurrency are security tokens is decided on a case-by-case basis that even experienced securities lawyers can disagree upon. Tokens are usually analyzed under the four-part Howey Test below to see if the token is in fact a security. Securities must meet the following criteria:

  1. An ​investment of money
  2. in a ​common enterprise
  3. with an ​expectation of profits
  4. predominantly from the efforts of others

Each characteristic of the token is analyzed against this framework to see if the cryptocurrency is in reality functioning as a new-age security. If it is, then regulators treat it as such, and cryptocurrencies must then be registered and handled with all of the same disclosures and precautions as any other security sold in the United States or to U.S. investors.

 

Utility Tokens

Cryptocurrencies can also be categorized as non-security utility tokens. These tokens purport to offer intrinsic utility and value, and are typically instrumental in powering the blockchain technology. These tokens function more like commodities than securities, and while they may act like currency in a fully functional network, they also have other values.

However, having a utility token with a properly formed and functioning network does not preclude said token from being labeled a security by the SEC. In In the Matter of Munchee, Inc., a purported utility token with a non-functioning network was labeled a security by the SEC. While labeling a token without a functioning network as a security – as it has no present utility – is not unexpected, the SEC also concluded that: “even if [Munchee] tokens had a practical use at the time of the offering, it would not preclude the token from being a security.”

After analyzing the Munchee Tokens under the Howey test, the SEC concluded that they were investment contracts because purchasers of the tokens had an expectation of profits predominantly from the efforts of Munchee and its staff. The SEC further concluded that Munchee had primed such expectations through its marketing efforts.

While this new case does not eliminate the distinction between utility and security tokens, it does caution that, when deciding whether a given token is a security, the SEC will look beyond utility at the character of the instrument, and base their conclusion based on the terms of the offer, the plan of distribution, and the economic inducements held out by the token issuer.

State Regulation

So far only the state of New York has issued any kind of regulation specifically regarding cryptocurrencies: the BitLicense. The BitLicense is New York’s attempt to control cryptocurrencies within its borders by requiring cryptocurrency businesses to register and comply with several different disclosure and financial obligations. The regulation has been divisive, and many businesses have rallied against its high costs. While a few companies have applied for and received the license, most other companies have simply left the state or stopped offering services to its residents.

Regulation Abroad – The Ever-Shifting Jurisdictional Question

The United States is not the only country grappling with how best to regulate cryptocurrencies. Many cryptocurrency businesses face daunting questions regarding in which jurisdictions to form and to do business in. In the end, the question is quite difficult and fact-specific, requiring communication between legal counsel in different jurisdictions and taking into account nebulous and piecemeal country-by-country regulations. It is impossible to do a detailed analysis without knowing how a country’s existing securities laws, financial regulations, and banking regulations will operate (or will be adapted to operate) with cryptocurrencies. The fact that cryptocurrency-specific regulations are still developing does little to add clarity, and makes the analysis even more challenging. Yet a few global trends are noticeable:

Suspending Cryptocurrencies

Some notable countries, like China, and South Korea, have suspended cryptocurrencies. These countries have cited the risk of fraud and the lack of adequate oversight in suspending cryptocurrencies and their exchanges, forcing cryptocurrency companies and exchanges to relocate.

 

Regulating Cryptocurrencies

Other countries, like Japan and Australia, have adopted disclosure and regulatory measures, or have companies register with the applicable government authority. Several countries have also tried to implement disclosure or registration regulatory regimes when it comes to cryptocurrencies, but such regimes are cumbersome and expensive to fledging companies.

Cryptocurrencies as Commodities

On the other hand, Switzerland and Singapore, two of the countries at the forefront of the cryptocurrency market, have simply stated that cryptocurrencies are assets not currency, and that they will treat them as such under existing regulations.

Conclusion

Ultimately, cryptocurrency regulation remains in its infancy. Piecemeal regulation has already begun around the world as governments enact new regulations to control and legitimize cryptocurrencies, fold cryptocurrencies into existing regulations, or ban them outright. These splintered attempts at controlling a global phenomenon will keep the cryptocurrency market volatile, and pose a challenge to innovators, investors, and users. They will continue to work in the cryptocurrency space while pushing for legislation and regulation that will remove ambiguity and legitimize cryptocurrencies. At the same time, they must grapple with the possibility that new regulations may be confusing, detrimental, or have negative inadvertent effects.

Don’t Sleep – Robinhood Adding Crypto to Their Popular Mobile App Platform

Robinhood is a mobile stock market trading app. It has gained wide popularity because it allows you to buy and sell stocks and securities for no fees. The platform will soon allow stocks, options, ETFs and cryptocurrencies. I have owned this app, which required me to be on a waiting list for a long time for over two years now, and I am very happy with the integration and progression of the company. The app has a very simple and stylish design with 4 colors total and is completely mobile. A desktop version is coming soon.

1_ER7YBE3138afGPNmfkeRRw

The mobile app has just announced that they will be adding Cryptocurrencies in their new ad “Don’t Sleep” relating to the fact that currencies especially cryptocurrencies trade on a 24/7 global market around the world. This is very different from the American market which runs from 9:30a to 4:00p. According to news outlets and their site they will allow users to track 16 of the top cryptocurrencies and they will allow you to trade the top two “bitcoin” and “Ethereum”. This is largely due to the recent craze among these investment vehicles and gaining popularity around the world. It seems like these days, mobile companies are trying to capitalize and keep up with the times. They will still allow trading to be commission free even on the new cryptocurrencies. This is interesting because lately Bitcoin has been having issues with its high transfer fees and transfer speeds.

DQmSdSh23GzGePEJFHc69ADtZS7wXaMctKmTzGzEue1E3wX

The Sixteen Currencies that you can track include: Bitcoin, Ethereum, Bitcoin Cash, Litecoin, XRP, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, NEO, Lisk, and Dogecoin. This implementation will begin in February 2018. Stay Tuned.

 

Sources:

http://blog.robinhood.com/news/2018/1/24/dont-sleep

 

 

Smart-Bridging the Cryptocurrency Gap, What ARK Coin is All About.

Being a college student, the need for money is quite high; however, we want it fast. With Bitcoins $4,882 rise just last week, everyone is pouring there money into the cryptocurrency. Bitcoin this, Bitcoin that; however, the new thing in the world of cryptocurrency investors are alt currencies. These are a set of cryptocurrencies that have specialized features, but are far less known mainstream. The next crypto on the radar of many crypto users is ARK.

ARK is a fork of Lisk, which started out as a cryptocurrency with the goal of creating side chains. ARK still uses the blockchain; however it is utilizing it in a very different way. The potential is very high for ARK because of the ambition behind the team of developers. There is a team of 27 developers that work to fix the problems that mainstream cryptocurrencies have. A few things that the developers have done are increasing speed, the Delegated Proof of Stake, and the notorious SmartBridge.

To start off, the developers of ARK have increased the speed of confirmation time. The confirmation time for ARK is around 8 seconds. The developers were able to achieve this by allowing microtransactions to be done through off-chain processing. This allows the transaction to be much faster because it prevents blockchain bloat. Blockchain bloat is when the blockchain gets filled up with test/fake/small transactions that slow down the network; however, with the use of off-chain processing, this can be avoided.

Another change ARK has made to their cryptocurrency, which is a problem the top cryptos have, is a modified Delegated-Proof-of-Stake. Many cryptocurrencies, like bitcoin, would select people to put together the blocks. However, the same people keep on getting it. With the new DPoS system, 51 active forging Delegates are selected by vote mechanism built into DPoS. These people have voting power; however, it changes each time. This allows the cryptocurrency to be more decentralized. This decision making process makes is very easy to upgrade the currency. This means it is good for investing in because of the continued improvements that the developers are able to do with ease.

ARK is also experimenting with a homogenous codebase. This means that connecting other services off the main code is very easy since it all contains the same “format” of code. “The potential to provide service bridges in the form of Lisk blockchain apps, along with any other additional systems provided by their Blockchain administrators.”

And Finally, the greatest thing ARK has brought to us: the SmartBridge. SmartBridge is the bridge that connects all cryptocurrencies together. To convert cryptocurrencies into a different type you have to use a wallet that has both currency pairs, convert it, and then move it to where you wanted it to go; however, this process is way faster with ARK. For example, a user that has ARK currency and needs to send it to another user that wants bitcoin. The user with ARK can simply send the ARK currency and while on its way it will convert to Bitcoin. This allows all cryptocurrencies to be easily converted. ARK is trying to become the centralized crypto, the one cryptocurrency that connects them all.

Screen Shot 2017-12-12 at 10.08.32 PM

The ambition and drive that the ARK developers have is the biggest asset to the new cryptocurrency. The developers are taking all the small issues that blockchain based cryptos are having and adapting to ARK to avoid similar problems and issues.

Now what everyone wants to talk about, what are the returns on this coin. The crypto currency is trading for $4.16 as of 12/12/2017. ARK started on March 22nd, 2017 and started trading at .03 cents; however, it started to make major gains in August when it started to trade at .85. By September the coin saw a 311% gain and was up at $2.65. Now at the start of December, ARK started at $3.06 and saw a great increase until the 5th of December; however, it is making another climb and is trading at $4.16. That is still a dollar return on the coin within 12 days.

Screen Shot 2017-12-12 at 10.11.00 PM

The potential for this coin is quite high. The future of this coin looks bright.

 

 

Sources:

https://coinmarketcap.com/currencies/ark/

https://ark.io/

 

Bitcoin: Back to Basics, A History And Summary

 This past week Bitcoin reached a high of approximately $19,500. Seems like “bitcoin” is the internets newest mainstream buzz word.

Let me take you back a little:

On May 22, 2010, a developer bought two pizzas using 10,000 units of a then-little-known digital currency called bitcoin” (Price, 2017). A developer, Laszlo Hanyecz, used 10,000 Bitcoins to purchase two large pizzas from a Papa Johns. Although it was a very simple transaction, the event had started the cryptocurrency craze around the world because it showed the idea of cryptocurrency was in fact possible. In the early stages of bitcoin, people were skeptical about the possibilities. To many, it seemed like monopoly money with no true value. The skepticism was about whether Bitcoin and other cryptocurrencies were going to be accepted and if there were truly any benefits.

Bitcoin is the most well-known cryptocurrency in today’s world. “On October 2008, A person, or perhaps a group of people, going by the name Satoshi Nakamoto published a paper outlining a peer-to-peer electronic cash system” (Abridged, 2017). The idea of Bitcoin was born and developers continued to work on making the idea a reality. In 2008 the idea of creating a currency that no government had control over was unthinkable. People from all different demographics shared an equal amount of concern about the digital currency. The bases of currency and money is trust. The two parties participating in a transaction must trust and agree upon the true value of the paper with the number “5” written across the top. In the United States, the citizens all trust and agree upon the value of the money we use; however, many citizens were concerned about how bitcoin was going to change the currency system. The developers continued along with the new idea and by 2010, Bitcoin was able to be used to purchase goods; however, the value of one bitcoin was worth less than one cent and many stores didn’t accept it as a form of currency.  As time went on, the progression of Bitcoin continued.

Bitcoin is part of a larger type of currency called “digital currency” or “cryptocurrency”. With paper currency and money in every country around the world, the government controls it. The government is able to oversee the process of transactions and sets guidelines for the use of the money; however, this is different for cryptocurrency. Cryptocurrency is, “divorced from governments and central banks”(Weller, 2017). With paper money, the government is in charge of regulating the “value” of money and trying to control the economy with it; however, cryptocurrency is very different from that. The idea of cryptocurrency is that there is no government attachment to the currency. No government owns cryptocurrency, this means that there is no third-party regulation of the coin. The one thing that controls the digital currency are the users of it. Cryptocurrency is based on peer-to-peer interaction. The users regulate themselves through technology set in place by the developers like blockchains and smart contracts. To many, cryptocurrency seems to be a useless and corrupting; however, the introduction of cryptocurrency will change how the world handles transactions of money and currency.

The word “cryptocurrency” has a secretive and illegal connotation and the idea of no third-party regulations scares many people from supporting the digital currency; however, the technology behind cryptocurrency, blockchain, allows for peer-to-peer interaction, giving more transparency to the movement of money. Marvin (2017) writes, “Think of blockchain as a historical fabric underneath recording everything that happens exactly as it occurs. Then the chain stitches that data into encrypted blocks that can never be modified and scatters the pieces across a worldwide network”. The Blockchain allows for every transaction to be recorded at the exact moment it happens with no third-party altercations. Meaning no one has complete power over the information being recorded. The Blockchain also has a public ledger that gives everyone the right to see the transactions, increasing the transparency. And finally with the information being stored on different networks all across different networks, there is no single point of failure. If one computer’s information gets hacked, the network removes that computer from the system and reconnects with other computers that are safe. With the implemented technology set into place, third party regulation is no longer needed, restoring the democracy in money.

Blockchain technology has many other uses besides cryptocurrency. Blockchain is simply a way to record any type of digital transaction that exists between two peers. The technology can be incorporated into many other uses, for example banking and accounting. Ittay Eyal, a researcher in the Department of Computer Science at Cornell University, states “The fact that there is a single agreed-upon chain onto which all transactions are placed means that one cannot double-spend the same coin in two conflicting transactions”(Eyal, 2017). Since digital currency is a set of algorithms and codes, there is a chance for counterfeiting that is hard to detect. This is the largest problem with cryptocurrency; however, the blockchain corrects this. When the same bitcoin or digital currency is used again, the blockchain recognizes this since every previous transaction is recorded on one public ledger. There is no confusion because all the information is on a single ledger. Also, the basis of this technology can be incorporated into online banking and accounting. The reason many accounting companies don’t prefer digital accounting is because of the ease of alterations by unauthorized users; however, the blockchain prevents this from happening. Since the blockchain is encrypted and stored on a network of computers throughout the world, there is no single point of access. This protects the business’s accounting information.

There are many pros and cons within the cryptocurrency world. In the video called, “Bitcoin: Pros, Cons and Coins” created by Forbes, both Bitcoin merchants and investors weigh in on the topic of the pros and cons of cryptocurrency. The pros presented throughout the video were ease of transferability. Since cryptocurrency is digital and peer-to-peer, the digital currency doesn’t have to go through a third-party when completing a transaction. This means that there are no fees attached to the transfer of the currency. Also with no third-party control, like countries, there is no need to exchange for a new type of currency when doing a transfer of currency. Another pro to cryptocurrency is developers and hackers are invited to test the limits of the security around the coin. The developers see the flaws in the system and making updates to the technology; however, cons are present. One of the cons of cryptography is the fluctuating prices. The volatility makes it very hard to price and keep track of the values of transactions since the values are always changing. The price constantly changes because of user’s actions. Since the users of bitcoins constantly buy and sell bitcoins, the value changes. The changing values make it difficult to continually update the values of one’s cryptocurrency.Another downfall is security of the currency. In order for the security of the currency to work, the developers must stay ahead of the speed of computers.

The two large pizzas that were purchased with 10,000 units of bitcoin would now be worth $100,000,000. As cryptocurrency becomes increasing popular, many people are taking to investing in it. Since the values of the currency continues to go up because of supply and demand, people purchase the digital currency and hold on to it. Skoyles (2015) writes an article about the process of investing. Skoyles writes, “At the moment the most common approach to investing in bitcoin is to just buy some.” The biggest problem with investing in cryptocurrency is the volatility of the currency. The value of the currency can decrease by a dramatic amount.

The words “bitcoin” and “cryptocurrency” have been thrown around the last few years. Although many people share fear of the idea of a digital currency with no regulations, the introduction of  digital currencies into the new world of technology will have many benefits. In the world of money, peer-to-peer transactions allows for an increase in transparency between the two parties. This is all possible with taking out the third-party and having the blockchain. There is no regulation; however, the blockchain gives the users a secure platform for transactions by recording every transaction at the exact moment and by storing the information on different networks throughout the entire world. The blockchain technology can be implemented into the world of banking and accounting. Digital currencies and the technology behind the currencies will influence the way world controls money.

 

 

Sources.

An Abridged History of Bitcoin (2017, November 19). In New York Times. Retrieved October 30, 2017.

Eyal, I. (2017). Blockchain Technology: Transforming Libertarian Cryptocurrency Dreams to Finance and Banking Realities. Computer (00189162), 50(9), 38-49. doi:10.1109/MC.2017.3571042

Soppe, Taylor. “Bitcoin: Pros, Cons and Coins.” Forbes, 2014. Accessed 13 Nov. 2017.

MARVIN, R. (2017). BLOCKCHAIN: THE INVISIBLE TECH THAT’S CHANGING THE WORLD. (Cover story). PC Magazine, 91-113.

Price, R. (2017, May 22). Someone in 2010 bought 2 pizzas with 10,000 bitcoins — which today would be worth $20 million. In Business Insider. Retrieved October 30, 2017.

Skoyles, J. (2015, Apr). Should I invest in bitcoin? New Statesman, , 21. Retrieved from https://search.proquest.com/docview/1679884099?accountid=14679

Treleaven, P., Gendal Brown, R., & Yang, D. (2017). Blockchain Technology in Finance. Computer (00189162), 50(9), 14-17. doi:10.1109/MC.2017.3571047

Weller, Chris. “Bitcoin is going wild — here’s what the cryptocurrency is all about.” Business Insider, 27 May 2017. Accessed 1 Nov. 2017.