Over the past few years, many people have acquired a deep distrust of both banks and governments when it comes to handling their money. The disastrous real estate market made it clear that no one at the top was really expending much energy on making sure that the average person was protected and would be all right. Instead, both executives and politicians seemed to be able to do whatever they wanted, while ordinary people suffered and struggled to hold their lives together.
The reaction from some individuals has been to look around for ways that they can move their hard-earned wealth outside of the control of the institutions that showed so little interest in the common good. This has helped to fuel the growth of interest in crypto currencies like Bitcoin. They’re designed to not require the kind of centralized authorities that are necessary with typical currencies, and don’t even really require that any particular individual tie his name to a particular purchase. Instead, everything is ruled by math and a lot of collaborative number crunching to track what is happening on the system at any given time.
In a sense, these operate like fiat currencies. That’s a term for the type of money that’s issued by governments and takes its value only from a general agreement of how much it should be worth. People accept the dollar as payment for things like bread and gasoline because they know they can take those dollars and use them to buy other things. Crypto currencies operate in much the same way. They don’t have any innate value or outside use. What they do have is a limited supply and a group of people who are willing to collectively treat them as a valid medium of exchange.
At the same time, people are never quite sure what’s going to happen next with the system. Prices have surged significantly over the past few years, but there have also been days when the currency lost half of its value in a single day. Anyone who wants to use it has to be at least a little adventurous, and it helps a lot to get eager to find a path toward prosperity that isn’t entirely under the control of big banks or the government.