In 2001, Argentina temporarily suffered a financial corralito by which the use of the peso as a means of exchange was restricted. This traumatic measure led to a loss of credibility in the then weak currency both as an instrument for exchanges and to have a reserve of value.
Before this, the people, who still needed to exchange goods, began to organize meeting points for barter. This type of direct exchange between people without use of a monetary instrument, although momentarily served its purpose, is tremendously inefficient. Historically, barter gave way to the use of currency as a more efficient means to coordinate trade and even financial exchanges, also because it allows a fraction of the exchange value much better (it facilitates negotiating with money a price of two chickens and live stock) .
In Argentina at that time, in front of the corralito and the incipient trick as a response, before the complexity of the transactions, the need for an instrument in the sports centers began to emerge, meeting points where people came to exchange what they had for what they needed. This resulted in the endogenous birth of local currencies called credits. Going to a point of exchange with some goods allowed you to obtain some credits with which you can buy the goods offered there.
This reveals something already known but that is remarkable, the creation of a currency is not an exogenous issue and at the request of a monetary authority that endorses it. Actually, it's just the other way around. Given the need arises an instrument of exchange and hence a need to homogenize it. From this coordination to guarantee the trust deposit of the users in a decentralized instrument arises the need of a centralized supervision, of a monetary authority.
As is logical, the Argentine credits disappeared at the moment in which the monetary authority restituted the use of the peso. Despite being weakened, it was the accepted medium throughout the country and that made up for abandoning local instruments.
It is very interesting to note that in the face of a financial and monetary crisis, due to the intrinsic need of the people, an exchange instrument will emerge.
In the financial crisis of 2008 it became clear that the banking system had not been sufficiently supervised and regulated by the monetary authorities to preserve confidence in the means of exchange. The banking malpractice had been able to speculate with the confidence of all in the monetary and financial system, through financial engineering to develop a bubble that once exploited, we had to pay for it together. From this crisis came a year later, in 2009, Satoshi Nakamoto launched the world bitcoin.
The birth of the cryptocurrency does not differ much from the birth of those pesos in the Argentine sports centers in the corralito but technologically it solved a series of problems that have allowed it to survive. Bitcoin is designed by resolving how to transfer value between two agents without the need for an intermediary through the network and also to maintain the confidence and security of not being counterfeit. It is, therefore, a technical response to the decentralization of the exchange instrument through the use of the internet for the transfer of information while maintaining high levels of security.
The first bitcoin quote for dollars in 2009 was at a rate of 1 309.03 bitcoins per US $ 1. Since then their quotation has increased until recently they have been changed at a rate of 1 bitcoin for around US $ 19 000
Currently financial markets have seen how more cryptocurrencies have been born and are being hit by their consolidation and rising prices. One of the keys to this revaluation is that, unlike the conventional currencies supervised by the corresponding monetary authority, the emission rate does not depend on the centralized decision and also has a maximum limit of virtual currencies. When a product is perceived as scarce increases its value. If the maximum limit of bitcoins created, 21,000,000, is approaching, it is normal for it to increase its quotation as long as it is perceived as a means of exchange and reserve of value.
Just as decentralized Argentine credit fell into a rapid and logical disuse, bitcoin has become consolidated as long as it is not linked to a local exchange point. In bitcoin, the exchange meeting point is global, it is internet. Another factor that should be added is that for years most commercial and financial transactions are no longer done physically but electronically where no physical currency takes part. The electronic accounting note with reference to a conventional centralized currency is the fiduciary instrument that we usually use. The move to a cryptocurrency is simply that it ceases to be centralized using the network.
But all this involves a complication in terms of monetary policy. One of the roles of the monetary authority is to regulate and stabilize the economy. When the cryptocurrencies arise, this asset is in question and its ability to affect the future of the economy can be weakened. In 2017, the Chinese Central Bank announced that it banned the use of bitcoins in its transactions. In the US there is a debate about whether or not to register bitcoin as an acceptable means of payment. The Japanese authority instead accepted the cryptocurrency as a means of payment. The banking system begins to see certain benefits in the use of the cryptocurrency because it allows many operations to facilitate its traceability and at a very low cost, cheaper than conventional currencies.
Undoubtedly, cryptocurrencies are revolutionizing the financial market and will give you something to talk about throughout this consolidation process. Increasingly they are used to make transactions without intermediaries and as long as they are revalued they are pursued as a means of reserving value. In this second function, everything points out that we are facing a new financial bubble as demand increases exponentially while its revaluation is expected and that is fed back with the demand itself.
Therefore, as a financial asset, although it shows high short-term profitability, it also entails a high risk. Before this who wants to use bitcoin as a reserve of financial value that should be advised with real experts on the subject and not rely solely on those recommendations of the last bubble in which it was insisted that the price of real estate assets was not going to fall. And it fell. Let us be cautious and sensible not to fall twice on the same stone.