History repeats itself time and again, yet man fails to learn.
Of all the qualities a man possesses, greed is the one which takes him down. And to exploit this very same greed, time and again men of deceit have come come up with new schemes to rob people.
Crypto currency is the new kid in the block which came into being in 2009 and has taken the world by storm in recent years. Everyone is talking about how this new currency is going to change the world and you will lose out if you don’t invest in it.
However, to my knowledge, currency has never been an asset class for investing. The same holds good for crypto currencies too. But before that, can these so called crypto currencies be called currencies at all. To understand this, let us look at the definition of a currency.
Currency is a system of money in general use in a particular country. For any system to be called a currency it must meet two fundamental characteristics. One it should be a store of value and two it should be a common medium of exchange generally accepted.
Which means, if I hold a certain value of currency with me, I should be able to meet my needs on exchange of currency of equal value. However, today I won’t be able to purchase even a needle on the street with any amount of crypto currency in my hands.
It is still not a legal tender for exchange in most countries. Which means it fails to satisfy to the two basic conditions for a currency.