A ‘Cashless Society’ describes an economic state whereby Financial Transactions are not conducted with money in the forms of physical banknotes or coins, but rather through the transfer of digital information (usually an electronic representation of money) between the ‘transacting parties’. Cashless societies have existed, based on barter and other methods of exchange.
Cashless transactions have also become possible using many different forms of ‘crypto currencies’ such as ‘Bitcoin’. A ‘Crypto Currency’ is described by Wikipedia as ‘a controversial digital asset designed to work as a medium of exchange that uses cryptography to secure its transactions to control the creation of additional units and to verify the transfer or assets.’ Depending on whom you listen to and believe ‘Crypto Currencies’ may just be ‘the next big thing’ or a ‘total fraud’.
Using the example of ‘Bitcoin’ whilst there are many examples of individuals who’ve invested and made strong returns in relatively short periods of time there appear to be many strange terminologies used and old adage of ‘If it’s too good to be true…’ may just apply.
Like an investment, a sound knowledge of both the product and the market allow better opportunities to obtain strong returns on capital. Whilst there have been many articles and lots of discussions regarding these relatively new products they haven’t been around long enough to make a truly informed assessment. There has also been a great deal of negative press that have surrounded many of these new markets. ‘Ponzi Scheme’ along with other negative names have been used to describe these new markets.
Further, as these products are delivered on electronic platforms across many country borders, consideration should be given to the Legal and Taxation framework and jurisdictions that exist where the transaction will occur.
Not dissimilar to any new or emerging products and markets, the more research and advice from professionals will allow you, as an Investor, the best opportunity for success.
Once again, the Greek saying that translates to ‘Let the buyer beware’ should raise the appropriate alerts.