By
Benjamin Njiri
April 23rd, 2024
From barter, cacao beans, and coins to cryptocurrency and blockchain: Simcord earns its place in the ongoing money evolution with its multifunctional blockchain-based platform Bitbon.
“You can look down on money, but you should never lose sight of it.”
André Prévost
We all know from the school history course that market relations originated in ancient centuries from the need to exchange goods. The very first deals were barter ones, and the value of goods was determined by the difficulties in obtaining them and the demand for them. But, in the development of human society, this method turned out to be not practical and convenient enough.
And, although the emergence of the first money in the form of seashells, stones, animal skins and even cacao beans seems to be a very primitive solution to a modern person, at that time, it was some kind of a technological breakthrough. However, such form of money was convenient to use only within a particular society where it was accepted, and it became ineffective with the emergence of foreign trade.
This problem was solved only in the 7th century B.C.; that was when the first coins emerged, which were quite different from the previous type of money. Nominal value was clearly determined, and the central government authority guaranteed its value protecting it from forgery. Such an approach facilitated active development of foreign trade.
It was very convenient to use coins because they were easy to store, transfer, and allowed the possibility of money exchange. It was yet another breakthrough resulting in the beginning of a new interstate economy. Metal coins turned out to be so practical that we are still using them nowadays.
“A bank is a common sense, sober approach to the reality and partners.”
J. Vringo
Trade development made it necessary to constantly transport a large number of coins over long distances. It was not only unsafe, but the problem was also in considerable weight of the money being transported. A solution was found, and soon it turned the whole world upside down. In such a way the first banks emerged which kept merchants’ money, and, instead, issued certificates stating the amount of deposit. Banks made it possible to use certificates rather than money for payment. This system became very popular and significantly influenced the global economy. Over time, certificates themselves began to be actively used as money. That is when the term “banknote” was invented, which literally means “bank record”.
“I believe that banking institutions are more dangerous to our liberties than standing armies.”
Thomas Jefferson
The bank network grew rapidly, bankers gained more and more power, but their political and financial activity did not always serve the state currency and treasury well. Moreover, their actions did not always coincide with the interests of the ruling elite, which resulted in the need for private bank regulation.
“A central bank is a bank by which the government interferes in the affairs of private banks, and which, unlike them, can print the money it needs by itself.”
K. Geppert and K. Pat
In 1668, the state bank of Sweden became the first central bank. Its tasks included monetary policy and issue of the national currency.
If you draw an analogy, you can notice something similar to it nowadays. And the most interesting thing is that the same reason had the same consequences then and now. The economic development led to the emergence of private banks, which caused the establishment of central banks. The invention of crypto currencies is also the consequence of continuous economic development and the reason for subsequent attempts to regulate them by states, as well as for creating national crypto currencies.
“Buy when everyone else is selling and hold until everyone else is buying. That’s not just a catchy slogan. It’s the very essence of successful investing.”
Jean Paul Getty
Crypto currencies rapidly spread all over the world. Now it is not easy to find a person who has not heard about Bitcoin, while crypto currency mining as well as mining farms have become a usual thing. Crypto currencies gained such success and popularity due to their previously unknown volatility. It is quite normal for Bitcoin to change in price by several thousand dollars just in a couple of hours. It is not surprising that such a feature, which gives the opportunity to invest and make profit as soon as possible, attracted investors all over the globe.
Enthusiasts think that crypto currencies are money of the future and, of course, they are right. Blockchain-based digital currency has a great potential. The possibilities of applying such currency in any niche significantly exceed all existing analogues. The experience of using digital money has already proved its efficiency, while its enormous popularity has shown that the economy needed such a financial instrument for a very long time.
However, in addition to the specified advantages, crypto currencies have a number of significant disadvantages. High volatility is only one of them, and this is rather a consequence where the prime reason is a lack of backing. Moreover, crypto currencies technologically cannot work with the state and are virtually unregulated because of full user anonymity. This led to numerous cases of financial fraud and then to extremely tough measures aimed at banning crypto currencies and ICOs in some countries.
“An investment in knowledge pays the best interest.”
Benjamin Franklin
Investing in science and technology has been popular at all times, and investing in Blockchain has become a real trend of modern times. The amounts granted to the development of this activity are billions and billions of dollars, and they continue to increase. According to Coinmarketcap.com, total capitalization of all existing crypto currencies equals several hundred billion dollars. Such an active financing gives positive results: Blockchain is being improved, and digital currencies get rid of their disadvantages.
“The individual investor should act consistently as an investor and not as a speculator.”
Benjamin Graham
After a massive hype towards crypto currencies, investors gained a certain amount of experience and became more selective in their investments. Increased attention was given to the features of technologies at the core of investment projects. That was why investors lost interest in hundreds of created Bitcoin clones. Business field required more stability from these currencies, and the government demanded opportunities for regulation and legal liability.
Such requirements led to the emergence of the first crypto assets, including Xaurum and Gold. These financial instruments are backed by a physical resource — gold. It is located in a depository, and users have a digital confirmation of their ownership right to a certain amount of gold. Does it remind you of anything? Maybe the first banks, where coins were stored, and banknotes were used. The only difference is that the Blockchain technology has allowed us to get rid of impractical paper certificates and has significantly improved the quality of mutual settlements.
Despite all the advantages of crypto assets related to their backing and increased exchange rate stability, their regulation remains an important issue. The use of digital money in business can be very convenient and profitable. But in order to conduct legitimate business in the legal field, it is necessary to have not only a flexible and friendly legislative framework, but also a platform for the digital currency based on the upgraded Blockchain.
“To spend money wisely — first spend it on your wisdom.”
Leonid Sukhorukov
The emergence of smart contracts has marked the next stage in the development of money. They are an electronic algorithm functioning in the same environment as crypto instruments. Such a contract can be described as automatic recording of transaction conditions in the Blockchain. Furthermore, the application field of the smart contract technology covers not only business area – its potential is really huge and is multiplied through potential of the Blockchain technology itself.
“There is nothing more criminal and self-destructive than having a great idea and then putting it off.”
Donald Trump
Ethereum (developed by Vitalik Buterin and launched on July 30, 2015) was among the first platforms to implement the ability to create and use smart contracts. Today, a lot of developers and entrepreneurs use the Ethereum core to build their Blockchain systems and businesses. While various governments are just trying to adapt their legislation to introduce the latest financial technologies into the economy, private business has already succeeded in that.
And that is when it is important not to miss a historic moment, when a crypto value, which is a completely new financial instrument, is formed in the hands of humanity. An “alive” self-sufficient and self-regulated ecosystem is necessary to ensure its functioning. Ethereum and its younger, but just as ambitious competitor, EOS, can be considered as a crypto value because these Blockchain systems are capable of a lot more than just executing transactions. But there is another platform different from the two mentioned above, and it should be considered in greater depth.
“Innovation distinguishes between a leader and a follower.”
Steve Jobs
The international company Simcord is engaged in scientific and research activities in the field of development and production of high-loaded blockchain-based software solutions, and it has been successfully developing for 18 years. In March, 2018, the company launched the Bitbon System. It is a multifunctional blockchain-based platform, the basis of which is the Bitbon crypto value. The system capabilities include the following: mutual settlements, collective investment through contributing and fundraising for various business projects.
One of the Bitbon features is that it is backed by real resources. And the most important thing is that any activity within this system is subject to the applicable legislation of the country in which the user resides. This became possible through removing anonymity of its users by completing the KYC identity verification procedure. Thus, all interactions between the system users are legally fixed.
“Riches do not consist in the possession of treasures, but in the use made of them.”
Napoleon Bonaparte
Execution of transactions between users is not the primary task of such platforms as Ethereum, EOS or the Bitbon System. Transactions are only a small part of their functionality, and their goals are much more global. In the future, it will be possible to implement all areas of business and economy at all levels into a single global Blockchain ecosystem. Thus, data records on all resources available to humanity will be stored in a unified public ledger, updated and monitored in the real time mode.
As predicted, the use of Blockchain as a ledger and crypto values as units for recording resources will allow increasing the efficiency of global economy and industry from 20% to 60%. This relates, in particular, to the production and distribution of products, electricity, water and other resources.
Undoubtedly, digital currencies are the future, but to be more precise, and as the evolution of forms of money has shown, the future belongs to multifunctional and highly efficient platforms based on the fundamental principles underlying a crypto value.