Is the flow of money in the world changing? A beginner's guide to the future of the economy and Bitcoin
Hello, I'm John, a blogger who explains blockchain technology in an easy-to-understand way!
Have you heard the news recently that the value of the US dollar has fallen a little? Today, I would like to take a look at how this small change in the world economy actually relates to our future and the world of blockchain, which I always talk about. Even when experts talk about difficult economic news, if you replace it with something familiar, you will surely find it easy to understand.
What's happening in the global financial world right now?
First, let me briefly introduce the original news. Recently, the Malaysian currency (ringgit) has reached its highest level against the US dollar in nine months. This is likely due to a slight easing of trade tensions around the world.
You may be thinking, "What does that have to do with us?" In fact, experts see this as a sign that the flow of money around the world may be changing.
Until now, the US dollar has played an absolute leading role in the world economy. It is the image of a currency that everyone can hold with confidence. However, if its power as the leading currency weakens a little, investors will start to think, "So, where should I put my money next?" This is a "change in the logic of capital allocation," that is,The rules for where big money goes are changing
In this news, Ng Jianhao, an expert at Mahara Capital Management Academy, also pointed out that investors now need to reconsider the risks of their investments such as stocks, bonds, and commodities (physical assets such as gold and oil).
Why is the "change in the flow of money" important to us?
Investors around the world are rethinking where to put their money. This is not irrelevant to us. Because there is a possibility that crypto assets (virtual currencies) such as Bitcoin will be one of the options for the new "place to put money."
So far, my main investments have been as follows:
- stock:Investing money in the hope of the company's growth.
- Bond:To lend money to a country or a company and receive interest.
- Commodities:Buying something that has value in itself, such as gold or oil.
All of these are heavily influenced by the economic and political situation of the country. For example, if the American economy fluctuates, the US dollar and the stock prices of American companies will also be affected.
But investors are always looking for new and safer places to invest, and especially in times like these when fears grow that what we know now may no longer apply, they may be looking outside the traditional financial system.
That's where the new option "blockchain" comes in.
This is where blockchain technology comes in!
Crypto assets, such as Bitcoin, have fundamentally different characteristics from traditional "money" and "assets." These are:"It is not controlled by any particular country or central bank."That's the point.
This system is supported by "blockchain (a technology that acts as a digital transaction notebook that can never be tampered with and is monitored by everyone)."
This is why Bitcoin is gaining attention when the global economy becomes unstable.
- Nationalless Global Assets:Bitcoin is less likely to be directly affected by a weakening of the US dollar or the state of the Japanese economy.
- The amount of issuance is fixed:There is no risk of a country printing a lot of money (risk of inflation) for its own convenience. Since the upper limit of the amount issued is determined by a program, it is thought that scarcity is easily maintained. Because of this property, it is sometimes called "digital gold."
- Unstoppable:Because the blockchain network spans the globe, even if one country or company says, "We're going to stop transactions," it cannot be stopped.
In other words, when investors around the world think, "I'm a bit worried about the US dollar, I wonder if there's anywhere safe..." Bitcoin, which is independent of national frameworks, could be chosen as a new safe haven.
From the author John
When I see traditional financial news like this, I feel the importance of the value of blockchain being "country independent." The more unstable the world becomes, the more attention may be paid to new monetary systems that are not controlled by any particular person. It's very exciting to be able to see such changes in the times in real time!
This article is based on the following original articles and is summarized from the author's perspective:
Ng Jian Hao: Shifts in Global Capital Flows and Markets
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