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Why Crypto?

If a hunter gatherer works 10 hours a day to get 5kg of meat, if that meat is then sold for 100$, then we can say that 100$ is worth 10 hours of human labour (yes some jobs pay more in 10 hours), the point is 100$ equals some human labour/time. A bank that has $ 1 billion from customers’ savings in their vault could be said of having $ 1 billion worth of human labour. However, due to ‘Fractional Reserve Banking’ that bank can issue loans up to 90% of the real money in their vault - which technically still belongs to their customers, they are only required to keep 10% of that 1 billion. This creates more money (debt) in circulation since the banks customers still have the claim over that $ 1 billion despite the borrowers have taken 900 million from that bank and already used up that money to buy cars, houses, etc. That creates Multiplier effect since the car and house sellers now received 900 million, if that money goes to Bank B and this bank repeats the same process as the fist bank, the money will keep multiplying itself as new loans and credits are being generated. It will be fine as long as the savers can withdraw their money (bank not running out of cash) and the borrowers can pay back their loans, failure on one of these will cause crisis. Bail outs from central banks to cover failing banks allow the overflow of money into the market go unpunished. This causes products prices to increase and the value of money decreases - hence the value of human labour/time also diminishes. When banks print money, they literally robbed away your lifetime’s work and labour because your work is denominated in their fiat currency. The real currency is Time. Cryptocurrency - as long as it is secure is free from this problem. Making it probably the best means of exchange. Since no central authority could produce BTC or ETH for free. Crypto’s security relies on ‘Trapdoor Functions’ and bits mixers like SHA256, ETHASH, PROGPOW, etc. That will take all computers on Earth combined millions of years to brute force attack. Or is it? We’ll see…

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