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Why Virtual Currency is a Wave of the Future

Why Virtual Currency is a Wave of the Future

While it has only been around for a few years, there are very few people today who haven’t heard of virtual currency, usually in the form of BitCoins.

A Brief History of Virtual Currency

The first mention of virtual currency was defined by Wei Dai in 1998 on the cypherpunks mailing list. This mailing list is an un-moderated list dedicated to discussing cryptography and its effect on society. In his original post, Wei Dai explained his idea of a virtual currency that would free people from government imposed restrictions and manipulations. He described a system where people could buy and sell products and services anonymously, using advanced cryptography which would control the virtual currency’s creation and transactions.

The first specifications and proof of concept of a virtual currency (called Bitcoin) were published in 2009 by Satoshi Nakamoto. However, nobody really knows who this “Satoshi Nakamoto” is. While there has been much speculation and investigations, there is still many questions on the originator of Bitcoin, but we do know that since its original conception as Bitcoin, virtual currency has grown by leaps and bounds! As a matter of fact, at the time of writing this article, there are almost 800 different Crypto-Currencies available for trading and that number is expected to keep rising.

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Why does Virtual Currency remain so popular?

There are several factors that make Virtual Currency so popular. One of the main attraction to virtual currency is the anonymity factor. The way virtual currency (aka crypto-currency) is set up makes it almost impossible to match up a person with a transaction. This is a good thing for those who want to set up a nest egg, but don’t want their government to know about it.

Although Cryptocurrency can often be spent like any other currency, the government can only tax it when and if you are ready to cash out or make a purchase. This makes virtual currency something of a tax haven! Of course, many governments are now trying to figure out ways to tax virtual currency: To this day, however, it remains very difficult (if not impossible) to impose any taxes on a currency that does not have legal tender status in any jurisdiction.

Another thing that makes virtual currency such an attractive option is that, since it’s conception, many places across the world have actually started accepting Bitcoins (and other virtual currency) as payments. According to an article in Technology Review, there are tens of thousands of Bitcoin transactions every day, with hundreds of businesses (mostly online) accepting bitcoins (and other virtual currencies) as payment.

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As Virtual Currency becomes more entrenched in the world, we will find more and more businesses, vending machines, grocery stores, etc. accepting this type of currency.

What does the Future hold for Virtual Currency?

    While there may be hundreds of virtual currencies out there right now, only a few are really viable currencies. We’ve already discussed the most popular virtual currency, BitCoin, but few others seem to be making waves.

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    For instance, shortly after bitcoin’s emergence, we saw another virtual currency called Litecoin. Unlike the creator of the Bitcoin, however, the creator of Litecoin (the second most successful virtual currency) is well known. Charles Lee successfully launched Litecoin in 2011, based in part on the Bitcoin code, but using Scrypt as a proof of work function, instead of the SHA-256 function that Bitcoin uses. Basically, what this means is that it takes less computing power to generate the Litecoin, so more people can “mine” it.

    Other virtual currencies are appearing on the horizon every day that may give LiteCoin and even BitCoin a run for their money. The creators of virtual currencies are always coming up with new and inventive ways of mining and distributing these “coins,” such as OneCoin and YoCoin, which use different methodologies for distribution.

    As virtual currencies catch on, we will probably see many innovations and new ideas that will propel the virtual currency world further and further. Who knows, we may see a global currency, some day, based on the concepts of virtual currency, that will make real currencies a thing of the past. While many virtual currencies are a flash in the pan (based on poor coding or poor planning), you would do well to keep your eye out on emerging virtual currencies, as you never know what might be the next BIG thing. If you get in on the right one early, you can easily see a 500% or higher return on your investment. Take BitCoin as an example. When it first came out, BitCoin was trading at $1 per coin. Today, a bitcoin is worth over $500 (though this can fluctuate daily) and has fluctuated as high $1,242! So, you can see, although it may be considered ‘high-risk’ it’s definitely something to keep in mind as you consider making an investment in the future.

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    Featured photo credit: thewealthwatchman.com via thewealthwatchman.com

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    Published on September 17, 2018

    How Being Smart With Your Money Leads to Financial Success

    How Being Smart With Your Money Leads to Financial Success

    Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

    With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

    So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

    1. Avoid being “penny wise but pound foolish”

    It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

    You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

    So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

    2. When you want something big, wait

    Impulsivity can get you in trouble in most aspects of life. Finances are no different.

    It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

    We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

    A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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    So, you get the itch.

    You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

    Here’s where you have to take a step back.

    Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

    Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

    It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

    The impulse faded. And you just saved yourself a ton of money.

    3. Live smaller than you can afford

    You finally get that big raise. And you want to celebrate – and why not?

    You’ve been looking forward to this forever. And after all, it was all due to your hard work.

    That’s fine, splurge a little. However, make it a one-time deal and be done.

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    Don’t get caught in the trap that just because you’re now making more money, you should spend more.

    Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

    The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

    But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

    4. Practice smart grocery shopping

    Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

    But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

    Create a grocery budget

    Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

    Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

    I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

    Make a list… and never deviate

    Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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    You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

    These impulse decisions will lead to overspending, which will derail your grocery budget.

    Eat before going grocery shopping

    It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

    If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

    After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

    Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

    However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

    This makes it much easier to stick to your grocery plan.

    5. Cancel your gym membership

    Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

    The average gym membership costs around $60 per month. That’s $720 a year.

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    Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

    I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

    Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

    Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

    For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

    Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

    There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

    It’s baby steps… And baby steps can start now!

    I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

    Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

    The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

    Featured photo credit: Unsplash via unsplash.com

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