value of money essay

Essay on Money for Students and Children

500+ words essay on money.

Money is an essential need to survive in the world. In today’s world, almost everything is possible with money. Moreover, you can fulfill any of your dreams by spending money. As a result, people work hard to earn it. Our parents work hard to fulfill our dreams .

Furthermore various businessmen , entrepreneurs have startup businesses to earn profits. They have made use of their skills and intelligence in getting an upper hand in earning. Also, the employee sector works day and night to complete their tasks given to them. But still, there are many people who take shortcuts to success and get involved in corruption.

Black Money

Black money is the money that people earn with corruption . For your information corruption involves the misuse of the power of high posts. For instance, it involves taking bribes, extra money for free services, etc. Corruption is the main cause of the lack of proper growth of the country .

Moreover, money that people having authority earns misusing their powers is black money. Furthermore, these earnings do not have proper documentation. As a result, the people who earn this do not pay income tax . Which is a great offense and the person who does this can be behind bars.

Money Laundering

In simple terms, money laundering is converting black money into white money. Also, this is another illegal offense. Furthermore, money laundering also encourages various crimes. Because it is the only way criminal can use their money from illegal sources. Money laundering is a crime, and the people who practice it are liable to go to jail.

Therefore the Government is taking various preventive measures to abolish money laundering. The government is linking bank accounts to AADHAR Card. To get all the transaction detail of each bank account. As a result, the government comes to know if any transaction is from an illegal source .

Also, every bank account has its own KYC (Know your Customer) this separates different categories of income of people. Businessmen are in the high-risk category. Then comes the people who are on a high post they are in the medium-risk category. Further, the last category is of the Employee sector they are at the lowest risk.

Get the huge list of more than 500 Essay Topics and Ideas

White Money

White money is the money that people earn through legal sources. Moreover, it is the money on which the people have already paid the tax. The employee sector of any company always has white money income.

Because the tax is already levied on their income. Therefore the safest way to earn money is in the employment sector. But your income will be limited here. As a result, many people take a different path and choose entrepreneurship. This helps them in starting their own company and make profitable incomes .

Every person in this world works hard to earn money. People try different methods and set of skills to increase their incomes. But it is always not about earning money, it’s about saving and spending it. People should spend money wisely. Moreover, things should always be bought by judging their worth. Because money is not precious but the efforts you make for it are.

Q1. What is Black Money?

A1. Black money is the money that people earn through illegal ways. It is strictly prohibited in our country. And the people who have it can go to jail.

Q2. What is the difference between Black money and White money?

A2. The difference between black money and white money is, Black money comes from illegal earnings. But white money comes from legal sources with taxation levied on it.

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Essay on Importance of Money

Students are often asked to write an essay on Importance of Money in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Importance of Money

Introduction.

Money is a crucial part of our lives. It is the medium used for exchange of goods and services, and it helps us meet our basic needs.

Significance in Daily Life

Role in society.

Money also plays a societal role. It helps us contribute to community development through taxes.

While money is important, it’s not everything. It’s a tool for survival and contribution, but happiness and fulfillment also require love, health, and peace.

250 Words Essay on Importance of Money

The significance of money.

Money, a medium of exchange, is a fundamental component of modern society. It is a tool that allows us to acquire goods, services, and experiences, thus playing a vital role in our lives.

Money as a Means of Exchange

Money simplifies trade, replacing the need for a direct barter system. It provides a standardized measure of value, enabling us to understand the worth of various commodities. This standardization facilitates smooth economic transactions and promotes economic efficiency.

Money and Freedom

Money also provides a certain level of freedom. It allows individuals to make choices about their lifestyle, from basic necessities to luxury items. It grants us the liberty to explore different opportunities, be it travel, education, or investment.

Money and Social Status

In many societies, money is often equated with power and status. While this perspective can lead to materialism and inequality, it also motivates individuals to strive for financial stability, fostering innovation and economic growth.

Money as a Tool, Not a Goal

In conclusion, money holds significant importance in our lives. It is the cornerstone of economic activity, a catalyst for personal freedom, and a symbol of status. However, its value lies in its ability to enable us to achieve our goals, not in its mere accumulation.

500 Words Essay on Importance of Money

Money, often seen as a simple medium of exchange, plays a pivotal role in modern society. Its importance transcends mere transactions, permeating every aspect of our lives – from the economy to social structures, personal relationships, and even our sense of self-worth.

The Economic Imperative

At its most basic level, money is the lifeblood of any economy. It facilitates trade, allowing for the efficient exchange of goods and services. Without money, barter would be the only alternative – a system fraught with inefficiencies and limitations. Money, therefore, enables economic growth by allowing for specialization and the division of labor.

Money as a Social Construct

The psychological dimension.

Money also has a profound psychological impact. It can influence our behavior, our motivations, and even our sense of self. Money can provide a sense of security and freedom, but it can also lead to stress and anxiety. The desire for money can motivate us to work harder and strive for success, but it can also lead to greed and materialism.

Money and Happiness

That’s it! I hope the essay helped you.

Apart from these, you can look at all the essays by clicking here .

Happy studying!

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Importance of Money Essay - 100, 200, 500 Words

Money is a commodity accepted by general consent as a medium of economic exchange. It is the principal measure of wealth. It is any good that is widely used and accepted in transactions. Human life will have a lot of changes with the presence and absence of money. Money has become the most vital part of life.

100 Words Essay On Importance Of Money

Money is a critical factor in our lives as it helps us to meet our basic needs and desires. It provides us with a sense of security and helps us to plan for the future. Money enables us to buy food, shelter, and clothing, and to access healthcare and education. Additionally, it provides us with the means to enjoy leisure activities and to travel. Money is also important in terms of personal and professional development, as it allows individuals to invest in themselves and their careers. Furthermore, money plays a crucial role in the economy, as it is used for transactions and for saving and investing.

200 Word Essay On Importance Of Money

The status of a person in society is impacted by how much money they have. We all desire financial success either b y working hard or succeeding in business. However, only a few people seize the opportunity to realise their dream of becoming a millionaire. Money also provides a measure of economic stability, as it allows for the management of inflation and the allocation of resources. On a personal level, money helps to meet basic needs and provide a sense of security, allowing individuals to plan for the future and pursue their goals and aspirations.

Everyone needs money, no matter how wealthy they are. Knowing the value of money in our lives helps us to avoid wasting or squandering it for any reason. The only reason for all the changes and variations in life is money. From the moment we begin till the moment we go to sleep, everything that happens in between requires the use of money. However, it is important to remember that money is not everything, and that true happiness and fulfillment come from other sources such as relationships, personal growth, and contributing to the community. Money is important, but it should not be the driving force in one's life.

500 Word Essay On Importance Of Money

Creation of money.

People bartered for goods and services before money was invented. About 5000 years ago, the Mesopotamian people created the shekel. This is considered the first known form of currency. Around 650 to 600 BC, gold & silver coins were stamped and used to pay armies. From then to now, money's importance has been increasing daily.

Origin of money

The word money is derived from the Latin word "Moneta" . Moneta means coin . In the ancient world, Juno was often associated with money.

Types of Money

There are seven types of money—representative, fair, paper, commodity, coinage, digital and commercial bank money . This money is used for exchange depending on their need and requirement.

Properties of money

The different properties of money are durability, divisibility, portability, uniformity, acceptability and limited supply. Having such unique and essential properties adds value to money.

Basic Need For Money

No matter their financial situation, everyone needs money. Money is required for many things, including purchasing clothing, housing, food, and other necessities. It's imperative to satisfy these needs. Our personal and societal well-being will suffer severely if we don't have enough money to achieve it.

Uses of money

In reality, we can say there are only five main uses for money

We can use it to live.

We can give it.

We can pay taxes.

We can repay debt and

We can save or grow it.

Power Of Money

Money has significant power to rule human life. It provides people with the ability to have the freedom to do what they want, be who they want and go where they want. Life with money will have success, freedom, choice, security, happiness and many more. Without money, we would be reduced to a barter economy. For every penny we spend in life, we need to think twice about whether it is worth it. Life without money shows us what adjustment is, what scarcity or starving for food is.

Impact Of Money

Money has a significant impact on our lives, influencing various aspects such as:

Basic necessities: Money allows us to meet our basic needs such as food, shelter, clothing, and healthcare.

Security: Having a stable source of income provides financial security, allowing us to plan for the future and reducing stress.

Career and personal development: Money provides the means for individuals to invest in themselves and their careers, allowing for personal growth and professional advancement.

Lifestyle: Money affects our lifestyle and the choices we make, from the type of home we live in to the leisure activities we pursue.

Relationships: Money can influence relationships, as disagreements over financial issues are common and can cause stress and tension.

Social status: Money affects social status, as income and wealth can determine access to certain opportunities and experiences.

Mental well-being: Money has a significant impact on mental health, as financial stress and insecurity can cause anxiety and depression.

In conclusion, money affects many aspects of our lives and has the potential to greatly impact our well-being, both positively and negatively. It is important to manage money wisely and to strive for financial stability while also balancing other important aspects of life.

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Essay On Money: 100, 250 Words Samples

Updated on
Nov 9, 2023

Why do you think money is important? Can we live without money? Does money have its own value? What’s the difference between hard money and digital money? When we plan on buying something, we have to pay a certain amount. Let’s say you want to buy a wristwatch worth $50. How do you compare that commodity with money? Do they have equal value? Is there any authority that states the value of money ? These and several other questions about money can make one wonder why money is given so much importance. Let’s go in-depth with an essay on money and find answers to all these questions.

Table of Contents

1 What is Money?
2 Why is Money So Important?
3 Essay on Money in 100 Words
4 Essay on Money in 250 Words

What is Money?

According to Wikipedia and Oxford Dictionary, Money is simply a medium of exchange. Some even consider money as one of the most important resources , which is used to make transactions of goods, services, or repayment of debts within a specific country or socio-economic context.

Money can have various forms, coins and banknotes in physical form, and electronic balances in bank accounts in digital forms. Money serves as a unit of account, facilitating the measurement of value in terms of prices, and as a store of value, allowing individuals to save purchasing power for future use.

Learn Why Financial Literacy is Important for Students.

Why is Money So Important?

What makes money such an important resource is its acceptance across the globe in multiple transactions and services. From serving as a medium of exchange to facilitating financial activities, the importance of money goes beyond our everyday needs. Here are several reasons stating the importance of money.

Money serves as a convenient medium of exchange that facilitates the buying and selling of goods and services, making transactions more efficient than barter systems.
It provides a standardized unit for measuring the value of goods, services, and assets, allowing for easier comparison and assessment of value across different items.
Money enables individuals and businesses to store wealth and purchasing power over time, facilitating savings and investment for future needs and goals.
A stable and reliable monetary system encourages investment, trade, and economic growth, fostering overall prosperity within an economy.
By using money, individuals and businesses can avoid the high transaction costs associated with bartering and the inefficiencies of non-monetary exchange systems.
The use of money encourages specialization in the production of goods and services, leading to increased productivity and efficiency within an economy.
Money is essential for the functioning of financial markets, banking systems, and investment activities, which are crucial for the allocation of resources and capital within an economy.

Essay on Money in 100 Words

El dinero or money is used as a medium of exchange, unit of account, and store of value. It facilitates trade, allowing for the smooth exchange of goods and services, while also enabling efficient allocation of resources and encouraging economic growth. As a unit of account, it provides a standardized measure of value, simplifying the comparison of different goods and assets.

Moreover, money acts as a store of value, allowing individuals to save and plan for the future. Its role in reducing transaction costs, enabling specialization, and supporting complex financial activities highlights its significance in the functioning of contemporary economies.

Essay on Money in 250 Words

Modern economics is heavily dependent on money or we can say that money is the pillar of modern economies. As a medium of exchange, it simplifies trade by providing a universally accepted method of payment for goods and services, eliminating the inefficiencies and limitations of barter systems. Its characteristic fosters the development of complex market systems, encouraging specialization and the efficient allocation of resources.

Apart from being a medium of exchange, money functions as a unit of account, providing a standardized measure of value that enables individuals to compare prices and evaluate the worth of different goods and services. This uniformity in valuation streamlines commercial activities and allows for effective planning and decision-making in both personal and business contexts.

Money serves as a store of value, allowing individuals to save and accumulate wealth over time. This feature empowers people to prepare for future expenses, emergencies, or long-term goals, providing a sense of security and stability in an uncertain world.

In addition to its role in daily transactions , money fuels economic growth by facilitating investment, entrepreneurship, and innovation. Financial institutions utilize money as a tool to allocate capital efficiently, enabling the development of new businesses, industries, and technologies that contribute to overall economic prosperity.

Money plays multiple roles in our lives; it is a physical or digital representation of currency; it is a fundamental pillar of modern economies, underpinning the intricate web of commercial activities, financial systems, and societal well-being. Its importance lies not only in its tangible properties but also in the complex functions and structures it supports within the global economic framework.

Money is globally accepted as a medium of exchange in multiple transactions and services. From serving as a medium of exchange to facilitating financial activities, the importance of money goes beyond our everyday needs. To buy goods or services, you are required to pay a certain amount, which is fulfilled by paying money.

To write an essay on money, you need to highlight the key aspects of this essential resource. The multiple transactions in which money is used in our day-to-day lives make money an important part of our lives. Give examples of how money can change our lives and what would happen if we were out of money. Highlight the latest trends in the financial sector and what governments are doing to save our money from inflation.

Here are the 5 strongest currencies in the world: Kuwait Dinar (KWD), Bahraini Dinar (BHD), Omani Rial (OMR), Jordanian Dinar (JOD), and Gibraltar Pound (GIP).

For more information on such interesting topics, visit our essay writing page and follow Leverage Edu .

Shiva Tyagi

With an experience of over a year, I've developed a passion for writing blogs on wide range of topics. I am mostly inspired from topics related to social and environmental fields, where you come up with a positive outcome.

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Essays About Money: Top 5 Examples and 6 Prompts

With money comes great power ; however, power must always come with responsibility . Discover thought-provoking essays about money in our guide .

Money is everywhere. We use it to eat, drink, clothe ourselves, and get shelter, among many other uses. Nowadays, it is an undisputed fact that “ money makes the world go round.” The earliest known form of money dates back to around 5,000 years ago ; trade was previously carried out using a barter system. However, over the centuries, more and more nations began implementing a currency system, and money has become more critical.

In the contemporary world , it seems to be “all about money .” However, it is important not to lose sight of what is important; we must maintain good physical and mental health and healthy relationships with the people around us. Money is necessary; it is just not the only thing necessary. To start your essay, read these examples to write insightful essays about money .

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5 Top Examples On Essay About Money

1. essay on money by prasanna, 2. how money changed human history by jacob wilkins, 3. capitalism: money that make money by ernestine montgomery, 4. is money the most important thing by seth higgins.

5. An Introduction to Saving Money by Jeremy Vohwinkle

Writing Prompts For Essays About Money

1. good uses for money, 2. the “dark side” of money, 3. money’s role in history, 4. morality vs. money, 5. can money buy happiness, 6. how to save money.

“Imagine the world without money . We will eventually come to a point where we will be asking questions like “what’s the point of life”. Hope and goals are some of the important things that will keep a man going in life. Without any sense of achievement or motivation, there wouldn’t be any inventions or progress in the world. People work to get money and then people work harder to get more money . This cycle of life that keeps a man motivated and hopeful is one of the biggest advantages of the system of money ”

This essay gives readers a general outlook on money and its advantages and disadvantages. It gives people equal opportunity to work for their dreams and motivates them to be productive members of society, while it also raises the question of greed. Money , without a doubt, has its positive and negative aspects, but it exists and is only becoming more critical.

“But the barter economy was flawed. There was no universal measure for determining the value of an item. It was all based on the subjective opinion of the individuals involved. And to make matters worse, the barter economy relied on both sides wanting something the other had to offer. Trade, therefore, could be sluggish and frustrating. Human beings needed something different, and money was the answer.”

Wilkins writes about how money revolutionized the way trade was conducted. The barter system involved trading any objects if both parties agreed to a deal, such as trading animal skins for fish or medicine for timber. However, the only measure of an item’s value was how much one party wanted it- both sides needed to have something the other wanted. The introduction of money allowed people to put a solid value on commodities, making trade easier.

“So, if you were to closely observe the dirty, disordered canvas of economic progress during the 20th and 21 st century, you should conclude that, for all its warts, capitalism has been the winner. It has sometimes caused pain; suffered from serious cycles; and often needed the clout of the state- such as we have seen from September 2008. It has also been quite resistant to sensible regulation. Even so, the basic institutions of capitalism have worked, not just in the US and the OECD (Organization for Economic Co-operation and development) nations, but also many developing countries, of which India is one.”

Albeit lengthy, Montgomery’s essay discusses the debate between socialism and capitalism, a topic of which money is at the core. Montgomery describes Karl Marx’s criticism of capitalism: all the money goes to a few people, not the workers. She believes these are valid to an extent and criticizes certain forms of capitalism and socialism. Neither capitalism nor socialism is perfect, but according to Montgomery, capitalism creates a better economy.

“Being the richest man in the world does not mean you are the happiest man in the world, although money can buy you happiness sometimes, but not always. If we could all appreciate the way life is, the fun, and the beauty I think the world would be better. If people weren’t power hungry maybe we’d have a lesser demand for money . Those people who is money hungry and power hungry need to relax. Money can’t buy you happiness. These individuals need to understand that.”

Higgins implores readers to remember that money is not the only thing people need in the world. He stresses the necessity of money , as it is used to pay for various necessary goods and services; however, he believes it is not a prerequisite for happiness. Material things are temporary, and there are other things we should focus on, like family and friends.

5. An Introduction to Saving Money by Jeremy Vohwinkle

“A financial emergency may take the form of a job loss, significant medical or dental expense, unexpected home or auto repairs, a hurricane or major storm, or something unthinkable, such as a global pandemic. The last thing you want to do is to rely on credit cards with their hefty interest fees or to be forced to take out a loan. That’s where your emergency fund can come in handy. Historically, the formula for an emergency account is to have enough readily available cash to cover three to six months of living expenses.“

Vohwinkle’s essay gives readers some suggestions on how to save more money . Most importantly, he suggests setting up an emergency fund, as all other saving techniques stem from there. He also suggests creating an automatic savings plan and cutting down on “spending leaks,” like buying coffee. You might also be interested in these essays about celebration .

In this essay, write about why money is necessary and the ways to use it for the greater good, and include ways in which it can be used (investing, donating, etc.). For each point, you make, be sure to explain why. Of course, this is entirely subjective; feel free to write about what you consider “good uses” for money .

On the other hand, money also has a negative side —research on money -related issues, such as taxpayer-funded corruption and trading of illegal goods. In your essay, explore this side of money and perhaps give solutions on how to stop these problems.

Money has played a progressively more important role throughout human history. Discuss the development of currency and the economy, from the barter system to the digital world we live in today. You need not go too in-depth, as there is a lot of ground to cover and many eras to research. Be sure to cite reputable sources when discussing history.

Many people warn of “selling your soul” for financial gain. In your essay, you can write about the importance of having solid values in this day and age, where money reigns supreme. What principles do you need to keep in mind? Explain how you can still value money while staying grounded; mention the balance between material needs and others.

As stated in Higgins’ essay, more people have begun to prioritize money over all else. Do you believe that money is truly the most important thing? Can it alone make you happy? Discuss both sides of this question and choose your position accordingly. Be sure to provide precise supporting details for a stronger argument.

Enumerate tips on how you can save money . Anything works, from saving certain things for special occasions to buying more food in the grocery rather than eating out. This is your opinion; however, feel free to consult online sources and the people around you for extra advice.

For help with your essays, check out our round-up of the best essay checkers .If you’re still stuck, check out our general resource of essay writing topics .

Essay on Money

Introduction to The Power and Perils of Money

“Where Money Talks, Values Listen.”

Money is a fundamental aspect of modern society, serving as the lifeblood of economies and a cornerstone of daily life. Money holds immense significance in our lives, from facilitating transactions to influencing social dynamics. In this essay, we delve into the multifaceted nature of money, exploring its origins, functions, and profound impact on individuals and society.

As we navigate the complexities of money, we’ll unravel its historical roots, examine its various forms and functions, and delve into its role as a catalyst for economic growth and social change. Furthermore, we’ll explore the intricacies of personal finance, discussing the importance of financial literacy and responsible money management in achieving financial stability and well-being.

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Beyond its economic implications, we’ll also explore the broader societal effects of money, including its role in shaping social hierarchies, perpetuating economic inequality, and influencing political landscapes. Ultimately, this essay aims to provide a comprehensive understanding of the significance of money in our lives, shedding light on its profound impact on both individual prosperity and societal dynamics.

Origin and Evolution of Money

Money has been an essential part of human civilizations for thousands of years in all its manifestations. From basic barter systems to complex financial tools of the present day, money has always been important. Understanding the origin and evolution of money provides crucial insights into its significance and impact on society.

1. Barter Economy and the Emergence of Money:

Barter System: In primitive societies, individuals engaged in barter, exchanging goods and services based on mutual needs, with each person trading one commodity for another. Limitations of the barter system, including the “double coincidence of wants,” led to inefficiencies and logistical challenges.
Evolution to Commodity Money: Commodity money emerged as a solution to the shortcomings of barter, with certain items, such as cattle, grains, or precious metals, gaining widespread acceptance as mediums of exchange. Commodity money possessed intrinsic value and was universally recognized, facilitating trade and commerce across regions.

2. Development of Metal Coins:

Introduction of Metal Coins: Metal coins, particularly gold and silver, emerged as standardized forms of currency in ancient civilizations, including Mesopotamia, Egypt, and Greece. Metal coins facilitated trade by providing a convenient and durable medium of exchange, standardized in terms of weight and purity.
Coinage and State Authority: The minting of coins became centralized under the authority of states and rulers, leading to the establishment of monetary systems and the issuing of official currency. Coinage symbolized the sovereignty and power of states, with rulers often inscribing their images and symbols on coins as a means of propaganda and control.

3. Transition to Fiat Money:

Rise of Paper Money: With the expansion of trade and commerce, the need for a more flexible and portable form of money led to the introduction of paper currency. Paper money initially represented claims to a specific quantity of precious metals, serving as promissory notes issued by banks and governments.
Decoupling from Precious Metals: Over time, central banks and governments gradually abandoned the linkage between paper money and precious metals, transitioning currencies to fiat money and deriving their value from the trust and confidence of users rather than intrinsic value. Adopting fiat money allowed for greater flexibility in monetary policy and facilitated the expansion of credit and financial markets.

4. Evolution of Digital and Cryptocurrencies:

Digital Currency: Digital currencies, electronic records with monetary value saved in digital form, result from the Internet’s and electronic banking’s development. Digital currencies, such as electronic bank transfers and payment systems, revolutionized how money is transferred and accessed, offering convenience and efficiency.
Cryptocurrencies: Blockchain -based cryptocurrencies, like Ethereum and Bitcoin , are examples of decentralized digital money. Cryptocurrencies provide increased privacy, security, and decentralization but also present regulatory and stability concerns because they function independently of governments and central banks.

The Basic Need for Money

Meeting Basic Needs: Money is essential for meeting basic human needs, such as food, shelter, clothes, and healthcare. Access to money enables individuals to purchase necessary goods and services for survival and well-being, ensuring a decent standard of living.
Facilitating Economic Transactions: Money serves as a medium of exchange, enabling the exchange of goods and services in the marketplace. It enables individuals to engage in economic transactions, buy goods, pay for services, and participate in economic activities that contribute to economic growth and development.
Access to Education and Skills Development: Money is necessary for education and skills development opportunities. Investing in education and training enhances individuals’ knowledge, skills, and employability, leading to better job prospects and higher earning potential.
Healthcare and Medical Services: Money is vital for healthcare services and medical treatment. Individuals require financial resources to pay for medical expenses, health insurance, and access to quality healthcare facilities, ensuring their physical well-being and addressing health-related concerns.
Housing and Shelter: Money is essential for securing housing and shelter providing individuals and families with a safe and stable living environment. Access to affordable housing options requires financial resources for rent, mortgage payments, or property ownership, ensuring adequate housing for individuals and communities.
Transportation and Mobility: Money facilitates transportation and mobility, enabling individuals to travel for work, education, healthcare, and recreational purposes. Access to transportation choices, such as public transit, vehicles, or ride-sharing services, requires financial resources to cover transportation costs and maintain mobility.
Emergency Preparedness and Resilience: Money is crucial for building emergency funds and financial resilience. Having savings and financial resources enables individuals to prepare for unexpected expenses, emergencies, and financial setbacks, providing a safety net during challenging times.
Social and Recreational Activities: Money plays a role in accessing social and recreational activities that contribute to overall well-being and quality of life. Participating in leisure activities, entertainment, and social events often requires financial resources to cover expenses related to leisure pursuits and social engagements.

The Role of Money in Society

Money is a cornerstone of societal structures, influencing economic activities, social relationships, and individual well-being. Its multifaceted role extends beyond a mere medium of exchange, encompassing various functions integral to modern societies’ functioning.

1. Economic Significance of Money:

Facilitating Trade and Commerce: Money acts as a universally accepted medium of exchange, facilitating the soft flow of goods and facilities in the market. Eliminating the need for direct barter enhances efficiency and encourages specialization in production.
Measurement of Value: Money provides a common unit of account, allowing for the standardized measurement of the value of different goods and services. This function enables individuals to compare prices, make informed decisions, and confidently engage in economic transactions.
Economic Growth and Development: A stable and reliable monetary system fosters economic growth and development . Governments and central banks use monetary policy tools to regulate money supply, interest rates, and inflation to maintain economic stability.

2. Social Significance of Money:

Influence on Social Status and Power: The possession of wealth and financial resources often correlates with social status and power within a community. Economic disparities can create social hierarchies, impacting individuals’ access to opportunities and resources.
Impact on Lifestyle and Standard of Living: The availability of financial resources influences an individual’s lifestyle and standard of living. Money provides access to education, healthcare, housing, and other essential services, shaping the quality of life for individuals and communities.

3. Money and Personal Finance:

Importance of Financial Literacy: Financial education empowers people to make informed decisions about earning, spending, saving, and investing. Understanding the principles of personal finance is essential for achieving financial security and long-term well-being.
Managing Personal Finances: Budgeting, saving, and investing are key to effective personal finance management. Individuals must make strategic financial decisions to meet their short-term and long-term goals.
Psychological Aspects of Money: People often tie money to their emotions and psychological well-being. Developing a healthy money mindset involves understanding one’s relationship with money and addressing any emotional factors that may impact financial decisions.

4. Impact of Money on Society:

Economic Inequality: The distribution of wealth and income in society can contribute to economic inequality. Addressing issues of inequality requires a nuanced understanding of the role of money and the implementation of policies that promote equitable wealth distribution.
Consumerism and Materialism: Money influences consumer behavior , contributing to a culture of consumerism and materialism. Society’s emphasis on material possessions can impact individuals’ values and priorities.
Influence on Politics and Governance: Money plays a significant role in political processes, affecting campaigns, lobbying, and policy decisions. The intersection of money and politics raises questions about transparency, accountability, and the democratic process.
Environmental Implications: Economic activities driven by the pursuit of profit can have environmental consequences. Balancing economic growth with environmental sustainability requires careful consideration of the environmental impact of monetary and economic policies.

Functions of Money

Medium of Exchange
Money is a widely acknowledged medium of exchange for goods and services, facilitating transactions between buyers and sellers.
It eliminates the inefficiencies of barter by providing a common unit of value that simplifies the exchange process.
Unit of Account:
Money provides a standardized unit of measurement for the value of goods and services, permitting easy comparison of prices and making economic calculations more efficient.
It enables individuals and businesses to express the relative worth of different goods and services in terms of a common currency.
Store of Value:
Money serves as a store of value, permitting individuals to hold and accumulate wealth over time.
Unlike perishable goods or assets with fluctuating value, money retains its purchasing power over extended periods, providing a reliable means of preserving wealth.
Standard of Deferred Payment:
Money facilitates transactions involving future obligations by serving as a medium for deferred payments.
Contracts, loans, and other financial agreements often stipulate payments in a specific currency, with money as the standard for settling debts and fulfilling obligations.
Money’s high liquidity enables it to be readily convertible into goods, services, or other assets without experiencing a significant loss of value.
Its liquidity enables individuals to quickly access funds for urgent expenses or investment opportunities, contributing to economic flexibility and efficiency.
Measure of Value:
Money is a measure of value, providing a common denominator for expressing the worth of different goods and services.
Its role as a measure of value facilitates economic decision-making, allowing individuals to assess the relative utility and worth of various goods and services.
Facilitates Specialization and Efficiency:
Money enables specialization and division of labor by allowing individuals and businesses to focus on producing goods and assistance in which they have a comparative advantage.
Specialization leads to increased productivity and efficiency, driving economic growth and prosperity.
Portability and Durability:
Money is highly portable and durable, making it a convenient medium of interaction for transactions of varying sizes and distances.
The physical forms of money (such as coins and banknotes) and their digital representation ensure ease of transportation and storage, contributing to its widespread use in modern economies.

The Ethics and Morality of Money

While essential for economic transactions and societal functioning, money raises ethical and moral considerations beyond its economic utility. From wealth distribution issues to the impact of financial decisions on individuals and society, exploring the ethical dimensions of money sheds light on complex moral dilemmas and societal values.

Wealth Distribution and Economic Inequality: One of the most significant ethical concerns about money is the unequal distribution of wealth and income within societies. Critics argue that extreme wealth disparities contribute to social injustice and perpetuate systemic inequalities, raising questions about fairness and equity.
Social Responsibility of Wealth: Accumulating wealth brings with it a moral obligation to contribute to society’s well-being. Concepts like philanthropy, corporate social responsibility, and impact investing highlight the ethical imperative for individuals and organizations to use their financial resources for the greater good.
Ethical Consumption and Consumerism: Consumerism fueled by the pursuit of material wealth raises ethical questions about consumption patterns’ environmental and social impact. Ethical consumption movements advocate for mindful spending and sustainable lifestyles that consider the broader consequences of consumer choices.
Ethics in Financial Services: The financial industry operates within a complex ethical landscape, with issues like transparency, conflicts of interest, and fair treatment of clients coming under scrutiny. Ethical codes of conduct and regulations aim to promote integrity and trust in financial services, ensuring that financial professionals prioritize the interests of their clients.
Debt and Financial Vulnerability: Ethical considerations arise in lending practices, particularly regarding the responsible provision of credit and the treatment of borrowers, especially those in vulnerable financial situations. Predatory lending practices and exploitative debt arrangements raise ethical concerns about the consequences of financial transactions on individuals’ well-being.
Corruption and Financial Crime: Money laundering, bribery, and other forms of financial crime undermine the integrity of financial systems and pose ethical challenges to businesses, governments, and individuals. Ethical frameworks and legal regulations aim to combat financial corruption and promote accountability and transparency in financial transactions.
Psychological Impact of Money: Money’s influence on individuals’ attitudes, behaviors, and relationships raises ethical questions about the psychological effects of wealth and materialism. The pursuit of wealth can lead to ethical dilemmas related to greed, envy, and the prioritization of financial gain over other values.
Cryptocurrency and Ethical Considerations: Emerging digital currencies, such as cryptocurrencies, introduce new ethical considerations related to privacy, security, and the potential for illegal activities like money laundering and fraud. Ethical discussions surrounding cryptocurrencies also touch on financial inclusivity, decentralization, and the democratization of finance.

Financial Education

Financial education is essential to enable people to make informed decisions concerning their money, investments, and overall economic well-being. It covers many topics, from basic budgeting and savings to more complex concepts like investing, debt relief, and retirement planning. The need for financial literacy is huge in today’s complex financial world, where individuals are more accountable for their financial future.

Foundational Knowledge: Basic financial concepts like income, expenses, budgeting, and savings are the first things students learn about when they start their financial education. Comprehending these underlying concepts establishes the foundation for prudent financial judgment and accountable handling of finances.
Budgeting and Saving: Effective budgeting and saving are essential for financial education. Individuals learn how to create and stick to a budget, allocate funds for essential expenses, savings, and discretionary spending, and build an emergency fund to weather unforeseen financial challenges.
Debt Management: Financial education teaches individuals about managing debt responsibly, including understanding different types of debt, interest rates, and repayment strategies. It emphasizes the importance of avoiding excessive debt and using credit wisely to maintain financial health.
Investing and Wealth Accumulation: Investing is a key aspect of financial education, enabling individuals to grow their wealth over the long term. Topics covered may include understanding investment options (stocks, bonds, mutual funds, etc.), risk tolerance, asset allocation, and strategies for assembling a diversified investment portfolio.
Retirement Planning: Financial education helps individuals plan for their future financial security, including retirement. It covers retirement savings vehicles (e.g., employer-sponsored retirement plans, IRAs), estimating retirement expenses, and developing a strategy to achieve retirement goals.
Risk Management and Insurance: Understanding risk management and insurance is integral to financial education. Individuals learn about different types of insurance (e.g., health, life, property) and how insurance can mitigate financial risks and protect against unexpected events.
Financial Decision-making: Financial education supplies individuals with the knowledge and skills to make instructed financial decisions based on their goals, values, and circumstances. It encourages critical thinking and evaluating financial products and services, empowering individuals to navigate the financial marketplace effectively.
Economic Empowerment: Financial education is a tool for economic empowerment, particularly for marginalized communities and underserved populations. Promoting financial literacy and capability helps individuals build financial resilience, reduce vulnerability to financial exploitation, and achieve greater economic independence.
Lifelong Learning: Financial education is a lifelong journey with changing financial circumstances and economic conditions. It emphasizes the importance of ongoing learning, staying informed about financial trends and developments, and adapting financial strategies as needed throughout life.
Social and Policy Implications: Financial education has broader social and policy implications, influencing financial inclusion, economic mobility, and societal well-being. Policies that promote financial education in schools, workplaces, and communities can contribute to building a financially literate society and reducing financial disparities.

Money in the Digital Age

Digital Payments and Transactions: The addition of digital payment methods, including mobile wallets, online banking, and peer-to-peer payment platforms, has reshaped the conduct of transactions. Digital payments offer convenience, speed, and accessibility, allowing individuals to transfer funds, make purchases, and manage finances seamlessly across various digital channels.
Cryptocurrencies and Blockchain Technology: Cryptocurrencies, such as Bitcoin and Ethereum, represent a decentralized digital currency powered by blockchain technology. Blockchain technology enables secure, transparent, and tamper-proof transactions without intermediaries like banks or financial institutions.
Financial Inclusion and Access: The digitalization of money can promote financial inclusion by delivering access to financial services for underserved populations. Digital payment platforms and mobile banking services empower individuals in small areas or underserved communities to participate in the formal financial system.
Challenges and Risks: Despite the benefits, the digitalization of money presents challenges and risks, including cybersecurity threats, data privacy concerns, and regulatory challenges. Fraud, hacking, and data breaches highlight the importance of robust cybersecurity measures and regulatory frameworks to protect consumers and maintain trust in digital financial systems.
Central Bank Digital Currencies (CBDCs): Central banks are exploring the vision of central bank digital currencies (CBDCs) as a digital alternative to traditional fiat currencies. CBDCs combine the advantages of digital currencies with the stability and regulatory oversight provided by central banks, potentially reshaping the future of money and monetary policy.
Smart Contracts and Decentralized Finance (DeFi): Smart contracts, facilitated by blockchain technology, automate and enforce the words of contracts without intermediaries. Decentralized finance (DeFi) leverages blockchain and innovative contract technology to create decentralized financial services outside traditional banking systems, including lending, borrowing, and trading.
Cross-Border Transactions and Remittances: Digital currency and blockchain technologies promise to stream international transfers and reduce expenses and inadequacies linked to conventional remittance systems. Cryptocurrencies and stablecoins offer an alternative means of transferring value globally, bypassing traditional banking channels and intermediaries.
Regulatory Landscape and Policy Considerations: Governments and officials face regulatory hurdles due to the rapid evolution of digital currency. Regulatory frameworks must actively update to consider the changing landscape of digital finance to preserve consumer protection, financial stability, and compliance with know-your-customer (KYC) and anti-money laundering (AML) regulations.

Money is a cornerstone of modern society, serving as a medium of exchange, store of value, and facilitator of economic activities. Its significance extends beyond financial transactions, impacting individuals’ access to basic needs, economic opportunities, and overall well-being. Understanding the multifaceted role of money is crucial for promoting financial literacy, responsible money management, and equitable access to financial resources in today’s complex socioeconomic landscape.

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Essay on Money | Money Essay for Students and Children in English

February 13, 2024 by Prasanna

Essay on Money: The concept of money was invented somewhere in 5000 B.C by a few traders in Western Europe. Ever since the invention, different countries have adopted it and started printing their own money with specific values, which was usually backed by gold. But before money was invented, trading used to happen with a system called a barter system, where you could buy one product or service with an exchange of another product. This is basically a brief history of money.

For centuries, money has been, gradually, incorporated into every corner of our lives. Not to sound cliché, but the entire world runs on one simple thing called money. Thanks to those traders hundreds of years back, our lives now entirely revolve around the man-made concept of money.

You can also find more Essay Writing articles on events, persons, sports, technology and many more.

Long and Short Essay on Money in English for Children & Students

In this article, we provide a 600-word long essay on money for school children for projects and assignments. We also provide a 200-word short essay on money for school and college assignments and project work.

Long Essay on Money

A very informative 400 to 600-word long essay on money for school and college projects and assignments can be found below.

While not everything is about money, we will have to come at a point of realization where we simply cannot live without money. It’s a hard truth. But isn’t the world being too negative about money? No essay on money will make sense if it is just about history and facts. So let us see how money has impacted our lives. Just like every attribute in our society, money has two sides. The evil and the good.

What’s the Good Side of Money?

When we say our lives revolve around money and everyone is just chasing it, it is usually considered with a negative connotation. Not everything about money should be taken in a bad light. The whole concept of money and capitalism has given people livelihood, better standards of living and most importantly an equal platform for everyone to work hard and fulfill their dreams.

Trust and Convenience of Money

Money is one of the biggest and most valuable and trustworthy forms of trade in which businesses can thrive and consumers can be saved from fraud and cheating. One of the biggest plus points of money is the trust factor it carries with it. Imagine having to carry out the barter system even today, where, to get a kilo of rice, you need to give a kilo of wheat. Sounds funny, isn’t it?

Equality of Money

This is, surprisingly, one thing that can bring people from different walks of life to agree upon. Money can buy you a good standard of living, it can buy you respect and value in society. Every person, irrespective gender, race, ethnicity or creed will be provided with an equal level playing field to earn money and lead a better life

Motivation and Direction of Money

Imagine the world without money. We will eventually come to a point where we will be asking questions like “what’s the point of life”. Hope and goals are some of the important things that will keep a man going in life. Without any sense of achievement or motivation, there wouldn’t be any inventions or progress in the world. People work to get money and then people work harder to get more money. This cycle of life that keeps a man motivated and hopeful is one of the biggest advantages of the system of money

What is the Evil Side of Money?

Well, not everything is hunky-dory about our financial systems. It would only be fair to talk about the disadvantages of money also to have a well-informed essay on money.

Whether it is capitalism or socialism, democracy, or communism or where its India or China, our system of money in the world has many cracks and fault lines within it.

Broken system: If the concept of money in its pure form was used properly, there would have been equality on all scales and levels in the world. But, the reality is far from our imagination. The hierarchical system, in both capitalism or socialism, has created an immense amount of inequality and large gaps in income. It is true that more than 90% of the world’s wealth is in the hands of 2% of the population. If this is not a sign of a broken system, then we don’t know what is
Greed: We need to understand the difference between desire and greed. When the fine line between the two is made more visible, then maybe our world will start healing itself. We are not necessarily talking about individual greed for money, but we are talking about issues on a much larger scale. Businesses are solely running to make profits, the government is more concerned about saving the economy than their own people or the environment we live in. The greed for money is destroying our nature, creating an imbalance in the natural cycle of the world and led us into wars, famine, poverty and pandemics.

Short Essay on Money

A short essay on money with a word limit of 150 to 200 can be found below for school assignment and projects

We can’t deny the fact that we cannot live without money. Money is undoubtedly the more important thing to live a happy and content life. Sure, the money will help us buy our dream car or impress and give a dignified life for our parents, but we also need to remember that there is more to life than just earning money.

Money can make or break many things, but like any other thing in the world, money also needs to have limits and should be used judiciously. The gap between rich and poor is because of poorly planned financial systems and an immense amount of greed which is a pet of human tendency

On a big picture level, governments need to fix the broken financial systems and modify our capitalist and socialist mindsets to create for ourselves a better world and leave an even better society to our next generation.

10 Lines on Money Essay

Money is the only trustworthy and convenient way of trade
The money we use is guaranteed and backed by our government
Money, collected in the form of tax, helps us create a better environment for us
Earning money will give people hope and direction to lead a happy life
Money doest just buy tangible things like car or house, money also helps you earn respect and dignity in the society
Hard work, responsibility and dedication is what reflects in a person’s character if they have a good amount of money
Money is the core factor in all type of economies like a capitalist, socialist and communist economies
Money has provided equal opportunities for everyone in the world
Wrong use of money and greed has led to certain world issues like terrorism, pandemics and famine
The difference between the amount of money rich and poor has, reflects loopholes and problems in our system

FAQ’s on Essay on Money

Question 1. What if the concept of money was not there?

Answer: We would be back to our age-old barter system. Globalization and industrialization would never be possible and each country and each village in the country would be self-sufficient and isolated

Question 2. Is money good or bad?

Answer: This is one of the most daunting questions that economists, leaders and other experts are pondering upon for years. There is no simple answer, but the present system, if modified well, can make money the best thing in the world.

Question 3. Why can’t governments just print money?

Answer: Every money, even a Rs. 1 is backed by government securities, usually in gold or dollars. If we print more than the security we have, our fiscal deficit will increase, which means that the value of money will get reduced as it will be available everywhere to everyone. It is a simple supply and demand theory.

Question 4. What are the different types of money?

Answer: In terms of value and currencies, we have dollar, rupees, pounds, yuan and many more for each country. In terms of physical existence, we have digital money (like bitcoins) and hard paper-based cash. In terms of tangibility, we have hard cash, commodities, fiduciary, representative and fiat money.

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Essay on Money

Money is a significant part of human civilisation. It is difficult to think about the world without money. Everybody needs money for various purposes, starting from day-to-day transactions to savings for the future. But if we go back to history, we will find that before money came into existence, there was a barter system to facilitate transactions among individuals in society. With the development of civilisation over time, the barter system lost its ground and was replaced by money. This essay on money will provide ideas to students so they can effectively write essays on this topic. They can also check out the list of CBSE Essays to practise more essays on different topics and boost their writing skills.

500+ Words Essay on Money

Money is any object or record that is generally accepted as payment for goods and services and repayment of debts which also acts as a standard of deferred payments. The main functions of money are distinguished as: a medium of exchange, a unit of account and a store of value. The money supply of a country consists of currency (banknotes and coins) and bank money. Bank money usually forms the largest part of the money supply.

With the help of money, we can fulfil our dream. We can go on trips to various places, eat tasty food, buy a beautiful house and can buy any luxury items. Many businessmen earn a lot of money by making profits from their businesses. They provide services or make products that people need and make money from them. Now, there are many industries and startups which have set up their business and gained success. But still, there are many people who use illegal modes to earn money and become a part of corruption.

Significance of Money in Economy

Money plays an important role in shaping the economy of any country. Money can stimulate or even hamper economic progress. Money affects the income, output, employment, consumption and economic welfare of the community at large. Money through its purchasing power increases consumption and, as a store of value, increases investment, and employment and leads to economic development.

Demonetisation in India

The Prime Minister of India, Narendra Modi, announced demonetisation on 8th November 2016, where Rs 500 and Rs 1000 notes were withdrawn from circulation. It was a major event of the year 2016. The demonetisation decision was taken by the Government in consultation with the RBI. The action was taken to tackle Black Money which is available in various forms like cash, investment in property and real estate, luxury goods like jewellery or with foreign currency dealers and private financiers. The target was to curb the use of black money.

The other motto of demonetisation was to reduce corruption. With demonetisation, the cash in the hands of corrupt people becomes useless, and if the same is deposited in the banks, it loses anonymity, and the person has to pay taxes on the said amount.

The demonetisation also helped in promoting digitalisation through online transactions. A large section of the Indian economy was being run on the cash system, which does not get captured by the tax department as it does not leave any trail. So, the Government thought about promoting digitisation and formalisation of the economy through online transactions, e-wallets, and various payment instruments like Paytm, Rupay cards, the BHIM app etc. The beauty of these instruments is that the entire economic activity gets captured. It reduces tax evasion and improves tax collection.

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Money Essay | Importance and Benefits of Money Essay in English

Money Essay: Money is a vital wellspring of everyday routine to experience a solid and satisfying life, despite the fact that it can not measure up to adore and mind. Both have their own significance and benefit. We are giving articles on Money to partake in a paper composing contest in basic and basic words here.

Money is the medium utilized by individuals to purchase required labor and products. It is utilized as the source to satisfy fundamental requirements and is additionally a wellspring of solace throughout everyday life. Money is the main source to carry on with a sound and prosperous life; nonetheless, it couldn’t measure up to the meaning of affection and care. Both have their own significance and advantages. By the way, Money is a helpful and important product to live cheerily arranging all your standard liabilities towards your family and friends and family.

You can read more Essay Writing about articles, events, people, sports, technology many more.

Short Essay on Money 300 Words in English

Money is the fundamental need of life, without which nobody can envision a sound and tranquil life. We need money to satisfy our littlest needs. In present-day times, when progress is growing quickly and everybody is following western culture, in such a period, we need more money because of expanding merchandise. On prior occasions, there was training called trade framework, in which anybody would get another thing in return for a certain something. In any case, presently in this advanced world, just Money is expected to purchase everything or thing. it happens.

These days you need Money for each work, for garments, for food, for a safe house and surprisingly in numerous spots you need to pay for water. Despite the fact that it can likewise be said that ‘Money can’t give joy’s yet would you be able to be content with no Money? Since Money is a major piece of our life, at any rate you need Money to be content.

The significance of Money is expanding step by step, in light of the fact that our living has gotten over the top expensive. The significance of Money has expanded for a huge scope in the fields of creation, utilization, trade, circulation, public income and so on It assumes a vital part in deciding pay, work, continues partnership, general value level and so on On the off chance that we take a gander at the present-day situation, there is no uncertainty that he, who has a lot of riches, is viewed as more cultivated on the planet. Consequently, we can say that Money is vital in each part of life.

Importance of Money

Money is a fundamental thing throughout everyday life. In any case, it can’t accept things like time, love and genuine consideration. It can just satisfy the outer requirements of an individual and not the interior necessities like love. These days, everything has gotten costly yet getting them is vital to carry on with basic life. In the event that we don’t have money, nobody can envision the reality of how our circumstances will be.

The demise of an individual is sure because of the absence of Money and on the off chance that he endures, he experiences to confront numerous difficulties. Abundance empowers us to purchase every one of the essential things and helps us for the duration of our life. In the event that we comprehend the significance of Money throughout everyday life, we won’t ever go through Money with no reason or abuse. We can’t look at Money and love, in light of the fact that to carry on with a fruitful life we need both Money and love.

In this cutthroat world, to bring in Money by finding a decent line of work, everybody needs to concentrate well with advanced education from a notable school or college. An individual needs to bring in more money to satisfy the prerequisite of the relative multitude of individuals in the family, particularly for the individual who is the lone worker in the family.

An individual necessities Money to address the issues of all his relatives to eat, wear, and live. The rich have an uncommon personality and notoriety in the general public, be that as it may, the needy individuals spend their lives just getting two suppers per day. Every one of these progressions and contrasts are because of Money as it were.

In any place where there is a shortage of money in the house, there are a lot of struggles. There are squabbles among a couple. Neither does anybody regard each other in the case of bringing in Money. Neighbors and family members likewise peer downward on the destitute individual. He begins cutting her reasoning that the individual never requests Money from her. With this, nobody needs to get to know a destitute individual in the present time.

Money can neither purchase nor stop time nor purchase genuine romance and care together. Yet at the same time it is needed by all, so life can be taken in the correct way. Despite the fact that Money can’t give time and love, it certainly gives us bliss, certainty, fulfillment, physical and mental harmony. Because of which we can carry on with life effectively and each troublesome issue can be settled.

Advantage from Money

You can carry on with a conscious life: An individual is regarded just when he is monetarily prosperous. Something else, in the present society, the bankrupt individual has no regard.

Unadulterated and nutritious food can be eaten: The individuals who have abundance can appreciate an assortment of heavenly and nutritious dinners. What’s more, they can shield themselves from sicknesses.

Your assurance should be possible: In the present society, burglary, theft have expanded a great deal and rich individuals can give security to themselves because of Money.

The credit is repayable: Obligation taken from an individual rich individual can reimburse the credit without any problem.

The happiness regarding material delights can be achieved: With an adequate measure of riches, all material solaces can be appreciated like taking a decent house, great garments, vehicles and different things.

FAQ’s on Money Essay

Question 1. What is the requirement for money?

Answer: The main capacity of cash is to fill in as a mechanism of trade. As a mechanism of trade, cash addresses every one of the troubles of the deal. There is no need for a twofold fortuitous event of needs in a cash economy.

Question 2. What are the benefits of money?

Answer: Having money with you gives you a respectful life, you can have a healthy and nutritious life, you can pay your loans, have a luxurious life, etc.

Question 3. How can we earn money?

Answer: There are a number of ways to earn money such as;

You can be an employee in a company
You can start your own business
You can be an entrepreneur
You can use social media channels to provide your service

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What Is Time Value of Money?
Understanding TVM

The Bottom Line

Corporate Finance
Financial Ratios

Time Value of Money Explained with Formula and Examples

Katrina Ávila Munichiello is an experienced editor, writer, fact-checker, and proofreader with more than fourteen years of experience working with print and online publications.

What Is the Time Value of Money (TVM)?

The time value of money (TVM) is the concept that a sum of money is worth more now than the same sum will be at a future date due to its earnings potential in the interim. The time value of money is a core principle of finance. A sum of money in the hand has greater value than the same sum to be paid in the future. The time value of money is also referred to as the present discounted value.

Key Takeaways

The time value of money means that a sum of money is worth more now than the same sum of money in the future.
The principle of the time value of money means that it can grow only through investing so a delayed investment is a lost opportunity.
The formula for computing the time value of money considers the amount of money, its future value, the amount it can earn, and the time frame.
For savings accounts, the number of compounding periods is an important determinant as well.
Inflation has a negative impact on the time value of money because your purchasing power decreases as prices rise.

Investopedia / Mira Norian

Understanding the Time Value of Money (TVM)

Investors prefer to receive money today rather than receive the same amount in the future. Any sum of money, once invested, grows over time . So, that money they receive and invest today is worth more than putting off the receipt until tomorrow. For example, money deposited into a savings account earns interest. Over time, the interest is added to the principal, earning more interest. That's the power of compounding interest.

If it is not invested, the value of the money erodes over time. If you hide $1,000 in a mattress for three years, you will lose the additional money it could have earned over that time if invested. It will have even less buying power when you retrieve it because inflation reduces its value .

As another example, say you have the option of receiving $10,000 now or $10,000 two years from now. Despite the equal face value, $10,000 today has more value and utility than it will two years from now due to the opportunity costs associated with the delay. In other words, a delayed payment is a missed opportunity.

The time value of money has a negative relationship with inflation . Remember that inflation is an increase in the prices of goods and services. As such, the value of a single dollar goes down when prices rise, which means you can't purchase as much as you were able to in the past.

Time Value of Money Formula

The most fundamental formula for the time value of money takes into account the following: the future value of money, the present value of money, the interest rate, the number of compounding periods per year, and the number of years.

Based on these variables, the formula for TVM is:

F V = P V ( 1 + i n ) n × t where: F V = Future value of money P V = Present value of money i = Interest rate n = Number of compounding periods per year t = Number of years \begin{aligned}&FV = PV \Big ( 1 + \frac {i}{n} \Big ) ^ {n \times t} \\&\textbf{where:} \\&FV = \text{Future value of money} \\&PV = \text{Present value of money} \\&i = \text{Interest rate} \\&n = \text{Number of compounding periods per year} \\&t = \text{Number of years}\end{aligned} F V = P V ( 1 + n i ) n × t where: F V = Future value of money P V = Present value of money i = Interest rate n = Number of compounding periods per year t = Number of years

Keep in mind, though that the TVM formula may change slightly depending on the situation. For example, in the case of annuity or perpetuity payments, the generalized formula has additional or fewer factors.

The time value of money doesn't take into account any capital losses that you may incur or any negative interest rates that may apply. In these cases, you may be able to use negative growth rates to calculate the time value of money

Examples of Time Value of Money

Here's a hypothetical example to show how the time value of money works. Let's assume a sum of $10,000 is invested for one year at 10% interest compounded annually. The future value of that money is:

F V = $ 10 , 000 × ( 1 + 10 % 1 ) 1 × 1 = $ 11 , 000 \begin{aligned}FV &= \$10,000 \times \Big ( 1 + \frac{10\%}{1} \Big ) ^ {1 \times 1} \\ &= \$11,000 \\\end{aligned} F V = $10 , 000 × ( 1 + 1 10% ) 1 × 1 = $11 , 000

The formula can also be rearranged to find the value of the future sum in present-day dollars. For example, the present-day dollar amount compounded annually at 7% interest that would be worth $5,000 one year from today is:

P V = [ $ 5 , 000 ( 1 + 7 % 1 ) ] 1 × 1 = $ 4 , 673 \begin{aligned}PV &= \Big [ \frac{ \$5,000 }{ \big (1 + \frac {7\%}{1} \big ) } \Big ] ^ {1 \times 1} \\&= \$4,673 \\\end{aligned} P V = [ ( 1 + 1 7% ) $5 , 000 ] 1 × 1 = $4 , 673

Effect of Compounding Periods on Future Value

The number of compounding periods has a dramatic effect on the TVM calculations. Taking the $10,000 example above, if the number of compounding periods is increased to quarterly, monthly, or daily, the ending future value calculations are:

Quarterly Compounding: F V = $ 10 , 000 × ( 1 + 10 % 4 ) 4 × 1 = $ 11 , 038 FV = \$10,000 \times \Big ( 1 + \frac { 10\% }{ 4 } \Big ) ^ {4 \times 1} = \$11,038 F V = $10 , 000 × ( 1 + 4 10% ) 4 × 1 = $11 , 038
Monthly Compounding: F V = $ 10 , 000 × ( 1 + 10 % 12 ) 12 × 1 = $ 11 , 047 FV = \$10,000 \times \Big ( 1 + \frac { 10\% }{ 12 } \Big ) ^ {12 \times 1} = \$11,047 F V = $10 , 000 × ( 1 + 12 10% ) 12 × 1 = $11 , 047
Daily Compounding: F V = $ 10 , 000 × ( 1 + 10 % 365 ) 365 × 1 = $ 11 , 052 FV = \$10,000 \times \Big ( 1 + \frac { 10\% }{ 365 } \Big ) ^ {365 \times 1} = \$11,052 F V = $10 , 000 × ( 1 + 365 10% ) 365 × 1 = $11 , 052

This shows that the TVM depends not only on the interest rate and time horizon but also on how many times the compounding calculations are computed each year.

How Does the Time Value of Money Relate to Opportunity Cost?

Opportunity cost is key to the concept of the time value of money. Money can grow only if it is invested over time and earns a positive return. Money that is not invested loses value over time. Therefore, a sum of money that is expected to be paid in the future, no matter how confidently it is expected, is losing value in the meantime.

Why Is the Time Value of Money Important?

The concept of the time value of money can help guide investment decisions. For instance, suppose an investor can choose between two projects: Project A and Project B. They are identical except that Project A promises a $1 million cash payout in year one, whereas Project B offers a $1 million cash payout in year five. The payouts are not equal. The $1 million payout received after one year has a higher present value than the $1 million payout after five years.

How Is the Time Value of Money Used in Finance?

It would be hard to find a single area of finance where the time value of money does not influence the decision-making process. The time value of money is the central concept in discounted cash flow (DCF) analysis, which is one of the most popular and influential methods for valuing investment opportunities. It is also an integral part of financial planning and risk management activities. Pension fund managers, for instance, consider the time value of money to ensure that their account holders will receive adequate funds in retirement.

What Impact Does Inflation Have on the Time Value of Money?

The value of money changes over time and there are several factors that can affect it. Inflation, which is the general rise in prices of goods and services, has a negative impact on the future value of money. That's because when prices rise, your money only goes so far. Even a slight increase in prices means that your purchasing power drops. So that dollar you earned in 2015 and kept in your piggy bank buys less today than it would have back then.

How Do You Calculate the Time Value of Money?

The time value of money takes several things into account when calculating the future value of money, including the present value of money (PV), the number of compounding periods per year (n), the total number of years (t), and the interest rate (i). You can use the following formula to calculate the time value of money: FV = PV x [1 + (i / n)] (n x t) .

The future value of money isn't the same as present-day dollars. And the same is true about money from the past. This phenomenon is known as the time value of money. Businesses can use it to gauge the potential for future projects. And as an investor, you can use it to pinpoint investment opportunities. Put simply, knowing what TVM is and how to calculate it can help you make sound decisions about how you spend, save, and invest.

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The Time Value of Money

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Published: Jul 10, 2019

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Essay on Money in English for Children and Students

Table of Contents

Essay on Money: Money is the medium used by people to buy required goods and services. It is used as the source to fulfill basic needs and is also a source of comfort in life. Money is the most important source to live a healthy and prosperous life; however, it cannot be compared with the significance of love and care. Both have their own importance and benefits. Nevertheless, money is a useful and necessary commodity to live contentedly disposing all your usual liabilities towards your family and loved ones.

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Long and Short Essay on Money in English

We have provided some simply written essay on money to help your kids to do better in their essay writing competition.

These Money Essay are written in easy English so that student of any class can easily understand it and also reiterate it or write it down, whenever required.

We have divided following essays under long and short essay on money in English according to the need, to help your kids to do better in their school competitions.

These essay on money will prove useful in your school assignments or general discussion with your family and friends.

Money Essay 1 (100 words)

Money is the most basic requirement of the life without which one cannot fulfill his basic needs and requirements of the daily routine. We can never compare the importance of the money with the importance of love or care. When one need money, love cannot fulfill this requirement and if one need love, money cannot fulfill this requirement.

Both are highly required for the healthy life but they have their significance and importance separately. Both are required by us on urgent basis so we cannot rank both on the same scale. We need money everywhere such as to eat food, to drink water or milk, to see TV, news, subscribe newspaper, wear clothe, get admission and many more requirements.

Money Essay 2 (150 words)

Money is the basic requirement of the life without which one cannot imagine a healthy and peaceful life. We need money even buying a little needle. In the modern time, where growth of civilization is going very fast and following western culture, we need more money because of the increasing prices of everything. Earlier there was a system called barter system in which one was allowed to exchange things to get goods however, in the modern one need only money to buy everything.

The importance of money is increasing day by day as the living has become so costly. The significance of money has increased to a great extent in the field of production, consumption, exchange, distribution, public finance and etc. It plays a very crucial role in determining the input, income, employment, output, general price level of anything, etc.

Money Essay 3 (200 words)

In such a costly and competitive society and world, no one of us can live without money. We need money to fulfil our basic needs of the life such as buying food, and other many basic necessities of life which are almost impossible to buy without money. People in the society who are rich and have property are looked as honourable and respectful person of the society however a poor person is seen as hatred without any good impression.

Money increases the position of the person in the society and gives good impression to him. All of us want to be rich by earning more money through good job or business in order to fulfil all the increasing demands of the modern age. However, only few people get this chance of completing their dreams of being a millionaire.

So, money is the thing of great importance all through the life. Money is required by everyone whether he/she is rich or poor ad living in urban areas or rural areas. People in the urban areas are earning more money than the people living in backward or rural areas as the people of the urban areas have more access to the technologies and get more opportunity because of the easy sources.

Essay on Jan Dhan Yojana

Money Essay 4 (250 words)

Money is very much required thing in the life however; it cannot buy things like time, love and true care. It can only fulfil the outer needs of the person and not the inner needs like true love. Now-a-days, everything has become so costly but necessary to buy for living a simple life. And what if we have no money, either we would die or suffer more if saved.

Money has capability to buy anything virtually and helps us a lot throughout the life. By taking the importance of the money in our life we should never destroy or waste the money without any purpose. We should not compare the money and love because both are required separately to run a successful life.

In this competitive world, everyone wants to get good study with higher education from the popular college and university to get good job in order to earn more money. A person needs more money to fulfil the requirement of the all members of the family especially one who is only working person of the family.

He or she needs to fulfil the eating, clothing and living requirements of the family members and for that money is required. Rich people of the society are given particular recognition and popularity however poor people live their life by arranging just food for two times a day. All the changes and differences are just because of the money.

Money Essay 5 (300 words)

Money is really a very important thing for the human beings to lead their life in the satisfactory way. Unlike animals and plants, we need more money everywhere. In order to live in the society, we need to maintain our status and position in the society for which we need money. In order to eat food or drink water, wear cloth, get admission to the school, take medicine or go to the hospital and other many activities we need lots of money. Now the topic arise is, where we got such required money. We need to get higher level study and do hard works to get good job or open our own business which requires more skill and confidence.

Earlier the condition of poor people was very poor because of the pressure of the rich people. They were not helping the poor people and use them only as a servant on the very low salary. However the condition of the poor people has become good as the rule and regulations of the government as been change in order to equalize the condition of both. Now everyone has equal rights to study higher and get good job. Many people understand that money is the origin of the evil in the mind however I do not think so because thinking is the process of human mind and not the creation of money.

I understand and believe that money is the most important key of happiness gifted by the God. It is the human mind to take anything in different ways. Some people take it only to fulfil their physical needs and they never take it heartily however some people understand everything to the money and they can do anything for getting the money such murder, corruption, underworld work, smuggling, promoting bribe, etc.

Money Essay 6 (400 words)

There is no any doubt that money is so essential for our healthy living. Money is almost everything for us to live a life and maintain the good stats in the society. It is the money which fulfils the need of bringing necessary comforts and amenities of the life. If one has money, he/she can get anything in his/her life. It is the money which helps us in developing good personality, improving confidence, makes us able to creditworthiness, improving capacity, increasing capabilities and enhancing our courage to a great level. Without money we feel helpless and alone in this world where no one is ready to help and assist. In the current materialistic world, money is very important and powerful thing without which one cannot live and survive.

Now-a-days, in order to earn more money in wrong ways, bad people are taking help of corruption, bribe, smuggling, murder rich people of the society, and other callous activities by degrading the moral and ethical values of the humanity. Lazy people follow wrong ways to earn money as they understand that these ways are simple and easy however it is not true. One can earn more money in less time and effort but not for long; surely he would be lost in the near future as he is following wrong and weak way. The people who are earning money by following all the rules of humanity earn less money but for long time and they become the high status personality of the society.

People doing corruption save their money as a black money in other countries to keep hidden from the common public and use that money for bad works or increasing their physical luxury. However, common people of the society respects a lot to the people earning money using wrong techniques as they have fear of them and little bit greediness that they can get some money in return whenever required by giving them respect. They are generally called as the bhai or dada or don. Money cannot buy or stay the time as well as cannot give true love and care however highly required by all of us to run the life on the right path. It cannot give time and love however gives happiness, confidence, satisfaction, feeling of well being mentally and physically, makes life easy by solving all the difficulties, and many more.

All the essays on money given above are written by the professional content writer to help students in getting fulfilled their needs and requirements. Essay on money is generally assigned to the students to write something in their own way. Money essay is given under the category of general essay.

Frequently Asked Questions on Money

Who found money.

Money, in various forms like barter or trade, has existed since ancient times. The first coined money is believed to have been created by the Lydians, in what is now Turkey, around 600 BC.

Who said money is life?

This specific quote isn't attributed to a singular famous person. Various interpretations and contexts might exist, but the idea that money plays a significant role in many aspects of life is widely acknowledged.

What is money quotes?

A popular quote about money is, Money can't buy happiness, but it certainly helps.

What is the nature of money?

The nature of money is abstract. It has no intrinsic value but is accepted as a medium of exchange. Its value is determined by trust and the backing of an authority, like a government.

What is the value of money in life?

The value of money in life goes beyond purchasing power. It provides security, freedom, and opportunities, but isn't the sole determinant of happiness or success.

What is the importance of money?

Money is essential as it enables trade, provides financial security, meets daily needs, and offers the potential for a better life. It's a measure of one's ability to afford services and products.

What is money in own words?

Money is a tool that facilitates trade, allowing us to purchase what we need or desire. It represents value and can be saved, spent, or invested.

What is the few lines on money?

Money is a medium of exchange, used to buy goods and services. It acts as a unit of account, a store of value, and is universally accepted in transactions.

Money Essay

Money is the medium used by people to buy required goods and services. It is used as the source to fulfill basic needs and is also a source of comfort in life. Money is the most important source to live a healthy and prosperous life; however, it cannot be compared with the significance of love and care. Both have their own importance and benefits. Nevertheless, money is a useful and necessary commodity to live contentedly disposing all your usual liabilities towards your family and loved ones.

Long and Short Essay on Money in English

We have provided some simply written essay on money to help your kids to do better in their essay writing competition.

These Money Essay are written in easy English so that student of any class can easily understand it and also reiterate it or write it down, whenever required.

We have divided following essays under long and short essay on money in English according to the need, to help your kids to do better in their school competitions.

These essay on money will prove useful in your school assignments or general discussion with your family and friends.

Money Essay 1 (100 words)

Money Essay 2 (150 words)

Money Essay 3 (200 words)

Money Essay 4 (250 words)

Money Essay 5 (300 words)

Money Essay 6 (400 words)

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All the money essay given above are written by the professional content writer to help students in getting fulfilled their needs and requirements. Essay on money is generally assigned to the students to write something in their own way. Money essay is given under the category of general essay. You can get other related essays and related information such as:

Essay on Poverty

Essay on Jan Dhan Yojana

Essay on Honesty is the Best Policy

Essay on Honesty

Essay on Corruption

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Americans Are Losing Faith in the Value of College. Whose Fault Is That?

For most people, the new economics of higher ed make going to college a risky bet.

Credit... Illustration by Sean Dong

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By Paul Tough

Paul Tough is a contributing writer for the magazine who has written several books on inequality in education.

Sept. 5, 2023

A decade or so ago, Americans were feeling pretty positive about higher education. Public-opinion polls in the early 2010s all told the same story. In one survey, 86 percent of college graduates said that college had been a good investment ; in another, 74 percent of young adults said a college education was “very important” ; in a third, 60 percent of Americans said that colleges and universities were having a positive impact on the country. Ninety-six percent of parents who identified as Democrats said they expected their kids to attend college — only to be outdone by Republican parents, 99 percent of whom said they expected their kids to go to college.

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In the fall of 2009, 70 percent of that year’s crop of high school graduates did in fact go straight to college. That was the highest percentage ever, and the collegegoing rate stayed near that elevated level for the next few years. The motivation of these students was largely financial. The 2008 recession devastated many of the industries that for decades provided good jobs for less-educated workers, and a college degree had become a particularly valuable commodity in the American labor market. The typical American with a bachelor’s degree (and no further credential) was earning about two-thirds more than the typical high school grad, a financial advantage about twice as large as the one a college degree produced a generation earlier. College seemed like a reliable runway to a life of comfort and affluence.

A decade later, Americans’ feelings about higher education have turned sharply negative. The percentage of young adults who said that a college degree is very important fell to 41 percent from 74 percent. Only about a third of Americans now say they have a lot of confidence in higher education. Among young Americans in Generation Z, 45 percent say that a high school diploma is all you need today to “ensure financial security.” And in contrast to the college-focused parents of a decade ago, now almost half of American parents say they’d prefer that their children not enroll in a four-year college.

The numbers on campus have shifted as well. In the fall of 2010, there were more than 18 million undergraduates enrolled in colleges and universities across the United States. That figure has been falling ever since, dipping below 15.5 million undergrads in 2021. As recently as 2016, 70 percent of high school graduates were still going straight to college; now the figure is 62 percent.

Outside the United States, meanwhile, higher education is more popular than ever. Our global allies and competitors have spent the last couple of decades racing to raise their national levels of educational attainment. In Britain, the number of current undergraduates has risen since 2016 by 12 percent. (Over the same period, the American figure fell by 8 percent.) In Canada, 67 percent of adults between 25 and 34 are graduates of a two- or four-year college, about 15 percentage points higher than the current American attainment rate.

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BJ’s toilet paper is one of the best values on the market, and it stood out across the board in our Lab tests. In fact, it earned the Good Housekeeping Seal . The toilet paper aced our absorbency tests, receiving a perfect score and soaking up more water than most other toilet papers we evaluated. Despite being thick, the two-ply toilet paper dissolved within seconds in our tests, meaning it's a safer option for your septic system. Plus, both our consumer testers and our softness-testing machine gave BJ's toilet paper high scores for feeling soft, and when we inspected the rolls, they were free of defects like pills and ply separation.

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Roll count	32 rolls
Sheets per roll	244 sheets

Don't let the low price fool you; this Walmart brand toilet paper gives you good bang for your buck. The TP was a runner-up in our extensive Textiles Lab tests, earning high rankings for thickness and perfect scores for dissolving quickly. When we evaluated softness in a blind touch test, this toilet paper outperformed other more expensive rolls, and our consumer testers gave it top marks for softness during use.

The toilet paper proved strong in our dry strength and perforation strength tests (how easy it is to tear the perforated portion of the toilet paper), but it was a bit weaker when wet. If you ever find the toilet paper to be out of stock online for shipping, you may still be able to buy it ahead of time online and then pick it up from your local store. In some locations, you can even opt for delivery from the store.

Ply	Two-ply
Sheets per roll	Not listed
Roll count	12 rolls

Lots of toilet paper brands claim to be super plush, but nothing we've tested or tried comes close to the softness of Charmin. Both our consumer testers and specialized lab equipment designed to measure softness ranked it the softest in a blind comparison test. The two-ply construction was also strong overall and stood out in particular for having the highest strength when wet, so you don't have to worry about it crumbling while in use.

Unfortunately, its high strength means it didn't break down easily with water in our evaluations, so you may want to look elsewhere if you have a septic system or particularly old plumbing. But we still think it's a great pick if you don't have plumbing issues at home. Plus, when you buy this one in bulk packs, the price per sheet is similar to more affordable brands.

Ply	Two-ply
Sheets per roll	284 sheets
Roll count	18 rolls

With more than double the sheets per roll than other toilet papers we've tested , this TP from Scott is ideal for someone looking to shop in bulk. There are 36 rolls in each pack with 1,100 sheets per roll for a whopping 39,600 sheets of toilet paper in each pack. Online reviewers describe this pack of toilet paper as "long-lasting," with some sharing that it lasts their families months at a time. The toilet paper is on the thinner side, but it is still two-ply for added durability.

Unlike most other toilet papers, this one features a small core, which means the brand can fit more sheets per roll, but this may make it more difficult to slide over your current toilet paper holder. Although we haven't tested this particular toilet paper, we have evaluated others from Scott, and they received high scores for dissolving quickly, making the TP ideal for sensitive septic tanks or homes prone to plumbing woes.

Ply	Two-ply
Sheets per roll	1,100 sheets
Roll count	36 rolls

No one wants toilet paper that crumbles during use, so if you're looking for strong toilet paper that holds up, Cottonelle proved to be the best when we combined the wet and dry strength scores. It also had a perfect score in our visual analysis with no signs of pilling (so it doesn't leave pieces behind!), and the layers didn’t separate, which are two common TP issues.

It has two-ply construction with a rippled texture to help clean, and it was one of the most absorbent toilet papers in our test. It was still pretty soft despite not being super plush, and though it was slow to dissolve, it was still quicker than the plushest options we evaluated.

Ply	Two-ply
Sheets per roll	192 sheets
Roll count	36 rolls

While most toilet paper is only two-ply (and some just one), this TP actually has three layers, which makes it super thick and absorbent. When we put the toilet paper through a blind test, our testers and lab equipment gave it some of the highest scores for softness, and it received high ratings for overall softness during use.

It was also o ne of the strongest toilet papers when wet in our tests, but not surprisingly, it didn’t break down in our dissolvability evaluations, so avoid this one if you’re worried about clogs in your plumbing system. We also tested the brand’s two-ply Ultra Soft & Strong Toilet Paper , which was still thick but just not quite as soft, strong or absorbent and it still didn’t dissolve easily.

Ply	Three-ply
Sheets per roll	253 sheets
Roll count	32 rolls

When it comes to toilet paper, recycled rolls are the most sustainable option because they're both diverting waste and skipping the use of new pulp to create bath tissue. This pick from Seventh Generation was one of the top performers among the more sustainable brands we tested. T he two-ply sheets were fairly soft and absorbent, and they dissolved within seconds in our test, so they shouldn't wreak havoc in your septic system.

This toilet paper wasn't as thick or quite as strong as other TPs we tested, but it still outperformed a few of the "ultra soft" branded toilet papers in our blind softness test. It is one of the more expensive brands we evaluated when you calculate the cost per sheet, but we appreciate its lower environmental impact.

Ply	Two-ply
Sheets per roll	240 sheets
Roll count	12 rolls

Another option for sustainable toilet paper is made from bamboo, which touts itself as “tree free.” The bamboo toilet paper from Who Gives A Crap is three-ply instead of the usual two, and we were impressed by how soft it feels compared to other sustainable TPs we've tried. When we tested the toilet paper for dissolvability in our Lab, it dissolved more easily than some of the other toilet papers we've evaluated, so it shouldn't lead to clogging issues.

The brand skips plastic packaging and instead wraps each roll individually in eye-catching recycled tissue paper and ships it right to your door in a cardboard box. To ensure you never run out of rolls, there's a subscription service available. If you're skeptical of trying toilet paper made with bamboo, know that the brand does offer 30-day returns and a money-back guarantee — no questions asked.

Ply	Three-ply
Sheets per roll	370 sheets
Roll count	24 rolls

How we test toilet paper

At the Good Housekeeping Institute Textiles Lab, we test all kinds of bathroom necessities including menstrual products , wipes and toilet paper. Over the years, we've evaluated over 30 different types of toilet paper from both popular name brands and value brands to determine which rolls are worth it. When we test toilet paper, here's what we look for:

✔️ Absorbency: We individually immerse five sheets of each type of toilet paper in water to measure the amount of fluid each sheet is capable of absorbing.

✔️ Strength: There are many different ways to evaluate toilet paper strength including wet and dry tests. We use our Mullen Burst Tester to measure the force needed to burst through a stack of five sheets of toilet paper.

toilet paper is placed between the two clamps on the instron machine, which is pulling the toilet paper apart to measure perforation strength

We then layer together five sheets of toilet paper and place them in our Instron machine, which pulls the toilet paper apart to measure its tensile strength. The Instron machine is also used to evaluate perforation strength (shown here), or how easy it is to tear the perforated portion of the toilet paper. For wet strength, we use our Instron machine and a Finch Cup to wet the toilet paper while it's pulled apart.

✔️ Softness: To scientifically measure softness, we outsourced testing to NCSU. They used their EmTec Tissue Softness Analyzer to evaluate and rate each sample of toilet paper for Hand Feel Factor. We also conducted a blind comparison test of the different types of toilet paper, inviting GH staff to feel each unmarked toilet paper and provide a softness rating.

a sheet of toilet paper being immersed into a beaker of water for dissolvability testing

✔️ Dissolvability: To determine whether or not the toilet paper will dissolve once you flush, we evaluated dissolvability. To test, we dropped a sheet of each toilet paper into a set amount of water spinning at a set speed. The amount of time it took for each one to dissolve was recorded. The less time the toilet paper took to dissolve, the less likely it is to clog your pipes and lead to septic issues.

✔️ Thickness: We stacked 10 sheets of toilet paper on top of each other and then used a caliper to measure the thickness.

✔️ Visual quality analysis: We visually examined sheets of each type of toilet paper, noting any defects like ply separation or pilling on the surface.

✔️ Consumer testing: To better understand how the toilet paper truly performs, we placed samples in restroom stalls at GH and asked users to rate each sample for softness during use. We also shared TP with consumer testers who were able to try it out in their own homes and share their thoughts.

What to look for when shopping for toilet paper

✔️ Ply: The number of plies in toilet paper is the number of layers per sheet. Two-ply toilet paper (i.e. two layers) is the most common, but you’ll also find one-ply, which dissolves faster, and three-ply, which tends to feel thicker and more luxurious.

✔️ Price: You don’t have to spend a fortune to get high-quality toilet paper. In fact, some of our top performers were some of the cheapest per sheet! Keep in mind that it pays off to buy in bulk. The more sheets per roll and the more rolls per package, the less you’ll end up spending overall.

✔️ Septic safe: If you're wondering what's the best toilet paper to use in a septic system, consider this: Even though some ultra-plush toilet papers were labeled as “septic safe,” some of the TP never dissolved in our tests after spinning at a high speed for over five minutes. If you’re worried about clogging, it’s best to avoid super thick options.

✔️ Sustainability : Recycled paper is the most sustainable option for toilet paper, but you can also opt for bamboo rolls. These types of toilet paper didn’t perform as well as most premium brands in our evaluations for properties like softness, durability and absorbency, but they tend to dissolve easily and are better for the environment overall than standard toilet paper.

✔️ Brand : When it comes to toilet paper, there’s no need to shy away from private label or store brands. In fact, some of them outperformed the popular name brands in our tests.

Why trust Good Housekeeping?

This article was written by GH Institute Textiles Lab executive director Lexie Sachs , who holds a B.S. in fiber science from Cornell University and has more than 15 years of experience in the textiles industry, including merchandising and product development for home products. Lexie joined Good Housekeeping in 2013 and has tested all kinds of paper products, including toilet paper. For this article, Lexie conducted extensive evaluations of more than 20 different types of toilet paper from popular name and generic brands.

Amanda Constantine most recently updated this article. She is a home and apparel reviews analyst who joined Good Housekeeping Institute in 2022. She worked with Lexie Sachs to review former testing data, researched popular toilet paper brands and also conducted toilet paper testing on newer brands in the Lab before updating picks for the best toilet papers.

Lexie Sachs (she/her) is the executive director of strategy and operations at the Good Housekeeping Institute and a lead reviewer of products in the bedding, travel, lifestyle, home furnishings and apparel spaces. She has over 15 years of experience in the consumer products industry and a degree in fiber science from Cornell University. Lexie serves as an expert source both within Good Housekeeping and other media outlets, regularly appearing on national broadcast TV segments. Prior to joining GH in 2013, Lexie worked in merchandising and product development in the fashion and home industries.

Amanda (she/her) researches and reports on products in the Good Housekeeping Institute 's Textiles, Paper & Apparel Lab, ranging from clothing and accessories to home furnishings. She holds undergraduate degrees in apparel merchandising and product development and advertising and marketing communications, as well as a master of science degree in consumer sciences from The Ohio State University. Prior to joining Good Housekeeping in 2022, Amanda was a lecturer for the fashion and retail studies program at Ohio State, where she taught fashion and textiles courses.

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Time Value of Money: Importance of Calculating Essay

To find inspiration for your paper and overcome writer’s block
As a source of information (ensure proper referencing)
As a template for you assignment

Introduction

Time value of money, importance of time value of money, reference list.

Due to fluctuations in economies, all organizations need to take into consideration concepts of the time value of money in any investment venture. Calculations of future outcomes from current investments play the central role in determining an organization’s sustainability in times of turbulent variations in economies. For example, the value of business units never remains stagnant, but they are in continuous change, hence necessitating organizations to adopt strategies, which will ensure economic sustainability of their businesses. Time value of money not only affects business finance, but also affects both government and user finances, who are the main stakeholders in an organization (Garrison, 2009, Par. 1).

Time value of money (TVM) is a monetary approximation, which gives worth to money at hand more value than future expectations of financial gains. It helps in weighing investment ventures, hence providing solutions to financial problems primarily resulting from mortgages, allowances, and savings. Finances held presently by an organization are more worth compared to expectations of future gains because the organizations can invest them, hence gain an organization profits in the future. The main principle of investment in TVM is; organizations can convert future expectations of monetary gain to an equal value “today.” Organizations can calculate future gains from an investment so long as any four of the following are available: current expenditures, present and expected future value, charged interest rate, and time span needed for an investment (Cedar spring software, 2002, Para 1-4).

In TVM, organizations obtain future value through compounding interest, which present investments will bring into an organization. As operational time changes, organizations should add obtained gains on investments to original invested capital, which an organization should use to calculate future times interests.

For organizations to avoid risks associated with poor investments, they should always consider both the incremental and total cash flows resulting from an investment. This involves analyzing the following components: previous outlays, scale value, expected cash flows from ventures, terminal value, and correct timing in organizing investment projects. All these should play a central in all decisions made by an organization to ensure viability of business ventures. In business, positive incremental cash flows play the central role of giving business directions, because it indicates sustainable business ventures (Adair, 2005, pp. 185-187).

For organizations to meet all business obligations for example loan repayments and payroll requirements, they must always keep correct records of their cash flow, for they will help to maintain the credibility of businesses to both investors and stakeholders. On the other hand, for organizations to calculate correctly time value of money, they have to consider initial investment cash, all operating cash flows, investment cash flow, financing cash flow, and end cash flow. This will guide correct decision-making in terms of business investments with minimum risks and maximum profits, within planned or approximated time.

In calculating TVM, net present values (NPV) help organizations to analyze profitability of projects whereby analysis of cash inflows and outflows helps in drafting correct project budgeting for organizations. The sensitivity of NPV helps organizations to calculate profits, which an organization can gain from an investment, hence enabling management and planning teams to take corrective actions in project investments. NPV takes into consideration both the inflations and outcomes of investment projects, whereby it applies the principle of investment depending on the outcome. In this regard, if management teams suspect a likelihood of occurrence of a negative NPV then, they should cancel or avoid such investment opportunities. This is because the probability of occurrence of negative cash flows from such an investment is high (Glink, 2009, p.1). In addition, to calculate NPV organizations need to consider the discount rate, which may result from future cash flows about present values. The majority of organizations prefer high discount rates as the main substitution for risky projects; this is sometimes necessary but, time consideration as dictates NPV is important because it helps in determining the yield curve. This helps to reflect the real scenario of a business venture, hence guide the decision-making process (Herrick, 2003, PP. 254-259).

Consideration of payback period is also important to calculate TVM of any investment. It helps in decision making in that, an organization can accurately determine the amount of time a specific venture will take before repaying invested money. At all times an organization needs to adopt business ventures with the shortest payback periods in order to lessen limitations that may result from investments. Although this method is good, it has many limitations, in that it lays less emphasis on time value of money. When using this approach in decision making organizations should take precautions by incorporating other methods such as the internal rate of return to ensure assumptions made are correct. Discounted payback period helps to account for all business flaws, which may occur by considering inflation and the amount of interest investment will give an organization. In addition, payback calculations are important because they can help managements to evaluate various business ventures hence, make correct investment choices, which will ensure the viability of an enterprise (Pisello, 2005, Par. 1-5).

In conclusion, it is very essential to correctly approximate the time value of money because it helps in giving clear outcomes of ventures an organization seeks to invest in. In addition, correct calculations can help an organization determine the amount of time it will take an organization to realize expected profits, hence take correct measures to avert associated risks.

Adair, T. A. (2005). Corporate finance demystified. Columbus: McGraw-Hill.

Cedar spring software. (2002). Time value of money. Get objects . Web.

Garrison, S. (2009). Time value of money. Study finance. Web.

Glink, I. (2009). Calculating the net present value (NPV) of a foreclosure vs. a loan modification. Money watch . Web.

Herrick, D. F. (2003). Media management in the age of giants: business dynamics of journalism. New Jersey: Wiley-black well.

Pisello, T. (2005). Why pay back periods are important. Sap tips . Web.

Primitive Energy Company's Capital Budgeting
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Chicago (A-D)
Chicago (N-B)

IvyPanda. (2021, November 27). Time Value of Money: Importance of Calculating. https://ivypanda.com/essays/time-value-of-money-importance-of-calculating/

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How to To Make Money Online: 35 Reliable Ways (2024)

From online surveys to envelope stuffing, there are lots of popular get-rich-quick money-making ideas. But do these methods really work? Usually, they don’t. You might earn a little bit, but the real issue with these gigs is their lack of stability and potential for long-term success.

Fortunately, there are legitimate ways to make money online. Unlike quick-fix schemes that promise much but deliver little, these reliable methods can lead to sustainable earnings and even career growth. And the best part? You only need a laptop and a stable internet connection to pursue them.

How to make money online: 35 real ways

1. start a dropshipping business.

Dropshipping is a business model where you sell a product to a customer, but the supplier handles the storage, packaging, and shipping on your behalf. You can dropship through your own ecommerce store —just install a dropshipping app and you’ll gain access to dozens of suppliers across various product categories.

Ready to start a dropshipping business? Shopify is the platform most online entrepreneurs use to sell products without inventory. With Shopify dropshipping apps, you can source a variety of products and have them shipped to your customers.

2. Try print on demand

Print on demand (POD) is another popular way to earn money online. Many entrepreneurs are drawn to it because it allows for low initial investment and easy setup. You create designs for products such as t-shirts, mugs, and tote bags, and then a POD service prints and ships the items directly to your customers.

How does it differ from dropshipping? First, you can make your own custom products, which is great for brand recognition. Second, you can choose from specific items rather than a vast range of categories. Most print-on-demand companies offer products that are easy to print on, like t-shirts, mugs, and tote bags.

3. Affiliate marketing

Affiliate marketing is one of the most popular ways to make money online. Throughout the years, its popularity has gone up and down, but it continues to be an effective way to earn passive income. The best part about affiliate marketing is that you choose from a vast range of companies to partner with, including Shopify , Amazon , and Uber.

This business model allows you to earn a living by promoting other brands. Once you’ve signed up for an affiliate marketing program, you’ll start earning commissions from sales of retail products, software, apps, and more. While the commission may seem small, keep in mind that you can be an affiliate for several brands and promote a variety of products across different platforms.

4. Start a YouTube channel

If others are profiting from YouTube , you can too. Your YouTube channel should focus on a single niche so you can build a strong, loyal audience. For example, you can create makeup tutorials, stream video games, review products, teach skills, create prank videos, or do anything else you think there’s an audience for.

The key to earning money on YouTube is creating content people want to watch. Enticing headlines and keyword-optimized descriptions can draw viewers to your videos. Once you hit the 1,000-subscriber mark, you become eligible to earn advertising revenue through running ads on your content.

5. Become an influencer

Building a personal brand can also help you make money online. Soccer star Cristiano Ronaldo charges more than $2 million for a sponsored Instagram post, for example. While it may seem like reality stars, singers, and athletes are the biggest influencers, keep in mind that even smaller-scale influencers can make more money today than they did a few years back.

To become an influencer, you need to build a healthy following. The best platforms to get started on? Instagram and TikTok. Some of the biggest non-celebrity influencers often gained their first taste of exposure on these platforms. You might want to check out how to get more Instagram followers if you want to build a big audience on the platform.

6. Create an online course

Selling courses ranks as one of the top strategies for earning money online. If you’re an expert in a particular subject, you can capitalize on your knowledge by creating online courses. You can sell these courses on online platforms like Udemy or through your own website if you have a dedicated audience. Some entrepreneurs earn as much as $5,000 per month from their online courses .

The platform you choose to sell your course on will shape your online money-making strategy. Selling on Udemy means you won’t have to focus much on promotion—it practically takes care of itself. You may want to enhance its visibility through blogs or social media networks. On the other hand, if your course is on your own website, consider using ads for promotion.

7. Publish an ebook

With Amazon Kindle Direct Publishing , it’s never been easier to publish an ebook. All you need to do is write the ebook, format it, create an ebook cover, publish it, and promote it. You can choose to hire a writer for your ebook, a graphic designer to design the cover, and a manuscript editor to eliminate errors from the content.

When researching the topic, focus on keywords based on popular searches on Amazon. The Keyword Tool is a great choice for finding the words people use while searching, so you can craft your title around them.

8. Start a blog

Blogging is one of the oldest methods for making money online. People who love writing tend to start blogs with a niche focus. For example, a blog about procrastination, cars, dropshipping, toys, etc., is often a narrow enough focus to build a loyal following and big enough that you can cover a lot of ground. For those looking to make money online fast, this method can be a rewarding venture.

You can start a blog on various platforms, such as Shopify (remove the checkout feature so you don’t have to pay a subscription as you build it out) or WordPress. When you start your blog, focus on very specific keywords with a tight focus and continue to expand into additional but still relevant categories as you grow and dominate new spaces.

9. Consider freelancing

The easiest way to make money online is to take your current 9-to-5 job and do it online instead. For example, if you’re a writer, data entry specialist, graphic designer, teacher, or developer, you can market these skills and find clients online who are willing to pay you to apply them.

There’s a never-ending list of job platforms for each type of freelancer too. For example, freelance writers can apply for jobs on specific online writing job boards, but also on general freelance websites like Fiverr , Freelancer , Upwork , and all the others. Remember, freelancing is a numbers game: the more applications you fill out and submit, the more likely you’ll be to get a response back.

10. Create an app

If you’re not a developer, you’re probably looking at this money-making idea and feeling a bit stuck. Fortunately, you can hire someone with programming skills to build an app for you. Sites like Toptal will connect you with plenty of app developers who are open to working with entrepreneurs to turn their vision into reality.

All you have to do is come up with a unique app idea, identify the audience you want to target, and create a brand image for your product. The programmer you hire will take care of things on the development front.

11. Become a writer

With a growing interest in content marketing , more and more companies are looking for writers who can fill their web properties with great content. The secret to succeeding as a writer is to focus on a specific niche. Many writers try to be generalists, covering everything from food to tech. However, a niche focus sets you apart.

What about AI replacing human writers? While AI can generate content, it lacks the human touch. As a writer, your experience in a niche adds value. You can offer thoughts, experiences, and insider perspectives. That’s what brands want. That’s what they pay for.

Sites for finding freelance writing jobs include:

BloggingPro
Be a Freelance Blogger

12. Do side gigs

Side gigs can help you make money online while you keep your full-time job. If you’re looking to make an extra couple of hundred dollars per month, this is a great idea. The work doesn’t always last long term, but it can.

Use platforms like Fiverr to find part-time gigs you can do online. As a new entrant in the gig economy, you’ll want to focus on offering a low price so you can get your first review. Ask a friend to buy your gig and leave your first review so you can get started faster. Treat the friend like a client and actually deliver a finished product that you can feature in your portfolio.

13. Do translation work

Translation is a fairly underserved niche, meaning there’s less competition in this field than in other niche markets. To capitalize on the opportunity, you need to be fluent in at least two languages. If you’re bilingual or majored in a popular language in school, this may be a great money-making idea for you to try out.

You will need to show proof of your ability to translate without using machine translation tools. If you have a language degree or experience translating text, make sure to highlight that in your portfolio or résumé. Most companies will require a translation test, and you can’t use translation tools at any time to help you pass the test.

Sites where you can find translation jobs to make money online include:

People Per Hour
Protranslating

14. Sell your stuff

Do you have a closet full of items you no longer use? Consider turning that clutter into cash by selling your unwanted goods online. You can list your items on online marketplaces like eBay or Etsy, or even set up your own online store for direct selling.

To maximize your sales, focus on high-demand items such as electronics, furniture, toys, and handcrafted goods. Plus, take clear, bright photos of your products—strong visuals help to attract customers and speed up sales.

15. Become an online tutor

If you’re looking to earn money on your own schedule, consider becoming an online tutor. Companies that hire tutors often provide the flexibility to set your own hours, allowing you to work when it’s convenient for you.

You’ll need a strong understanding of the subject you plan to tutor, as well as effective communication skills to explain concepts clearly to students. Additionally, having a teaching degree or relevant experience in the field can increase your chances of landing a tutoring position.

You can find online tutoring jobs on platforms such as:

16. Drive your car

If you own a car, you can make some spare cash as an Uber driver or delivery person. Even without a car, you can deliver food and other essentials using a bicycle or moped. Uber drivers looking to make even more money can turn their vehicle into a moving billboard with Free Car Media , which wraps your car in a removable vinyl advert.

Interested in making money fast with Uber? If you legally run a side business, you could showcase your products to passengers—though not all will be interested. With prior consent, passengers may sift through products you have for sale under the driver’s seat. If they wish to buy but don’t have cash, you can utilize Uber’s tip function for payment. Always ensure that this approach complies with local laws and regulations.

17. Become a virtual assistant

As entrepreneurs build more businesses, the demand for virtual assistants grows. A virtual assistant is a self-employed individual providing various services remotely, such as writing, bookkeeping, social media management, and customer support.

Find virtual assistant gigs on sites like Virtual Assistant Jobs , Indeed , or Upwork . Many have also succeeded by directly reaching out to brands and entrepreneurs. Combining job postings and proactive outreach could land your first client sooner than expected.

18. Become a Twitch streamer

While Twitch started as a gaming platform, it’s quickly evolving to include other types of content. Nowadays, Twitch streaming is an increasingly popular way to make money online.

You’ll need to find a popular game or channel that isn’t overly competitive so people can easily find your content. In order to get people to notice your streams, you’ll need to have a consistent style for your channel: Is it going to be funny, educational, or entertaining? Choose your path and stick to it.

There are five ways to monetize your Twitch channel:

Sell products
Offer brand sponsorships
Accept fan donations
Offer subscriptions
Run Twitch ads

19. Invest in stocks

Investing in stocks can be a way to make money quickly, but it’s not without risk, especially if you’re inexperienced. While the rewards can be high, you might also face losses.

If you have a 9-to-5 job, consider exploring your company’s financial programs. Does it allow investment in company stocks? If so, this could be an option. With company stock programs, your role as an employee may influence the organization’s success. Additionally, if your company offers an RRSP matching program, consider this as a way to save for retirement or a down payment on a home.

20. Sell photography

Whether you’re a professional photographer or just love snapping great pictures, you can make money online by selling your images. Sites like Shutterstock and Alamy are great places to showcase your work. These websites pay royalties to photographers when someone downloads a copy of their image.

If you’re looking to monetize your photography quickly, you can create a listing on Foap , a smartphone app that lets you upload your works and earn cash. When an agency, brand, or anyone else buys a photo or video from your digital Foap portfolio, the app creator shares the profit with you 50-50.

21. Sell clothes online

Have clothes you don’t wear anymore? Rather than letting them sit in your closet, sell them online. There are quite a few websites that let you sell apparel for cash, such as Poshmark , Refashioner , and ThredUp .

You can also explore Facebook buy and sell groups in your community to find people online and sell the items in person. Just be careful of scams and follow the recommended safety precautions.

22. Become an extreme couponer

If you’re looking to save and make a bit of money, couponing can be a viable option. Coupon Chief’s Pays-2-Share program , for example, lets you share coupons and earn a 2% to 3% commission on sales. The key is to share coupons that haven’t been used before.

This method resembles affiliate marketing, where you earn commissions through referral links. Many coupon companies pay their affiliates consistently, making this a legitimate way to earn online. For instance, Coupon Chief has paid more than $1.3 million in commissions to date.

23. Buy and sell domain names

If you regularly buy domain names but fail to use them, you can always try to sell them for a profit. Selling domains is ultra-competitive, though. If you own a one-word .com domain, you’ll have a better chance of selling. Words that have a high search volume sell well too. You can search for domain names and buy a custom domain through the Shopify domain registration platform.

Once you purchase a domain, list it for sale on GoDaddy’s Domain Auction . You can look through the domains with the highest bids to see what type of domains sell well. This research will help you evaluate the potential sale value of your domains and estimate how much profit you could make by selling them.

24. Sell your designs online

Graphic design is an amazing skill that you can monetize in several ways. You can go the print-on-demand route and sell your designs on your own custom products. Alternatively, you can pitch your designs on a crowdsource platform like 99designs .

There’s also the option to create your own graphics and templates to sell on marketplaces like Envato or Creative Market . Or how about picking up some clients and working as a freelance graphic designer? According to PayScale , this role will net you $29.90 per hour, on average.

25. Test websites

If you’re passionate about user experience, UserTesting pays reviewers $10 to give other entrepreneurs feedback on their websites and apps. You’ll be given a set of questions to answer as you browse through a site. That’s one fast way to make money online.

You’ll communicate your ideas and feedback to the entrepreneur through a video while navigating their website or app. Your video is only 20 minutes long, so if you do three videos per hour, you’ll make $30. Other reviewers can take projects quickly, so you have to act fast when a new website or app needs to be reviewed.

26. Create and publish newsletters

Creating and publishing email newsletters is one of the most profitable online business ideas. Here’s why: People crave personalized content they can read at their leisure, and newsletters hit the spot.

Starting is simpler than you think. First, identify your niche—what you’re passionate about and what can benefit your readers. Then, choose a reliable email hosting service that offers customizable templates, robust security, and tools for building a strong subscriber relationship.

27. Get a part-time job

When you’ve done whatever it takes to make money fast but struggle to make an impact, sometimes you’re left with no choice but to get a part-time job. You can browse part-time jobs on Indeed or a niche job board that caters to your field.

Some job websites require an upfront fee to register, so read the fine print carefully. Most sites let you filter for part-time and contract-based jobs, so you should have no problem finding relevant positions to apply for. With many companies hiring part time, it’s easier than ever to make extra money without working a full week.

28. Become a TikTok consultant

One of the trendiest ways to make money online is to become a TikTok consultant. Brands will contact you for brainstorming video ideas, developing engaging bios, and more. It’s the perfect money-making opportunity for digital nomads —you can run the entire business from your smartphone.

However, you need to have a few talents before you begin offering TikTok consultancy to businesses. The most important is knowing how to create viral videos that get people to engage with brands. If you don’t have the expertise to drive sales through this platform, you can still learn how to attract customers by taking this TikTok course .

29. Sell greeting cards online

If you have a knack for picking out the perfect greeting card for different occasions, this might be an easy way to make money online. However, it’s not recommended that you market your services to everyone and anyone—it’s not a smart way to do business. Instead, design or source greeting cards that appeal to a certain segment of the population.

For example, you can make greeting cards that cater to C-level executives wanting to thank their senior vice presidents for making profitable decisions last year. Or you can target health care professionals who want to thank their patients for choosing their clinic. For designing the cards, you can use an online graphic tool like Photoshop or Canva .

30. Offer virtual local tours

Do you know your town or city well? Share it with people by offering virtual tours. This can be a way for tourists and others to explore new places without leaving home.

You can use video calls to show historical sites, cultural spots, and local favorites. Share local stories and facts. Allow people to ask questions and see things up close. Offer different tours, like ones for food lovers or history buffs. Work with local shops so tour guests can buy local products.

31. Become a reseller

Reselling products is a way to make money without creating items. You can buy vintage or collectible items and then sell them. If you want to focus on specific products, you can become a certified distributor of a brand in your area.

Start by finding brands to resell on wholesale directories and platforms like AliExpress. Then, set up an online platform to sell your chosen products. Remember, you will need to manage inventory. This takes effort, but it doesn’t require making products.

32. Sell advertising space

If you own a website, you can make money by selling ad space on it. The more people click or look at these ads, the more cash you make. Make sure your website is a place where advertisers want to be. This means good content that shows up in search results. Also, check where ads work best on your site to keep your readers happy.

You could start with a network like Google’s to get ads up and running fast. If you’re using a site builder like WordPress, there are easy guides to follow. Or, explore other ad networks that offer different kinds of ads and special features to boost your earnings and reach more people worldwide.

33. Narrate audiobooks

Do you have a great speaking voice? Consider using it to make money online by narrating audiobooks. Being organized, professional, and punctual are key to building a reputable profile in the industry. You can find opportunities on platforms such as Bunny Studio , Voices , or ACX .

Enhance your visibility by creating a personal website where you can upload samples of your narration. You can also network by joining audiobook narration groups on social media and attending industry events. This will help you connect with authors and publishers looking for narrators.

34. Become an Airbnb host

If you’ve got a spare bedroom or a quaint guest house sitting empty, consider turning it into a source of income by hosting on Airbnb. It’s an effective way to use your property to cover your mortgage or save for future goals. You can even increase your earnings by selling items directly to guests, such as handmade décor or local products.

To get started, sign up for a free Airbnb account and set up your listing with attractive descriptions and photos. To add a personal touch, use QR codes in your space that guests can scan to purchase featured items

35. Do micro jobs

Looking to earn extra money? Consider micro jobs—small online tasks like transcribing audio or organizing data. Websites like TaskRabbit for various odd jobs, Upwork for freelance work, and PeoplePerHour for creative and technical tasks offer plenty of opportunities.

Just ensure you have a stable internet connection and a functional computer. For design or tech roles, showcasing your previous work could help you secure the job.

Start your online earning journey today

Making money online can help you stay afloat during these troubled times, but it can also help you escape your 9-to-5 job so you can become a full-time entrepreneur. By brainstorming online business ideas and choosing to start an online business, you gain more financial freedom , improve your financial security, and inch closer to living life on your terms .

It really is possible to earn a living online if you work hard and stick with it. So, which money-making idea will you pursue first?

Make money online FAQ

How can i make money online fast.

Build a Shopify store and dropship products online.
Sell used stuff on eBay, Amazon, or Facebook Marketplace.
Find and share coupons on websites like Coupon Chief.
Buy and sell domain names.
Rent your spare room on Airbnb.
Provide TikTok consultancy to startups and businesses.
Sell information products.
Tutor people online in high-demand subjects.
Create online courses.
Review apps and websites.

How can I make $100 a day on the web?

Complete surveys.
Sell products on Amazon.
Teach English online.
Watch videos for money.
Get cash back on your shopping.
Proofread for websites.
Review music online.

How can I make money online in 2024?

Launch a print-on-demand store.
Sell your clothes online.
Create handmade goods.
Offer freelance services.
Curate subscription boxes.
Build online courses.
Launch a podcast.
Create digital products.
Become an influencer.
Start a blog.

Want to learn more?

How to Work from Home: 11 Tips to Stay Productive and Focused
The 33 Best To Do List apps For Every Entrepreneur
16 Reasons to Start a Business
How to Work Remotely : 9 Tips & Tools to Master Remote Life

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The state of AI in early 2024: Gen AI adoption spikes and starts to generate value

If 2023 was the year the world discovered generative AI (gen AI) , 2024 is the year organizations truly began using—and deriving business value from—this new technology. In the latest McKinsey Global Survey on AI, 65 percent of respondents report that their organizations are regularly using gen AI, nearly double the percentage from our previous survey just ten months ago. Respondents’ expectations for gen AI’s impact remain as high as they were last year , with three-quarters predicting that gen AI will lead to significant or disruptive change in their industries in the years ahead.

About the authors

This article is a collaborative effort by Alex Singla , Alexander Sukharevsky , Lareina Yee , and Michael Chui , with Bryce Hall , representing views from QuantumBlack, AI by McKinsey, and McKinsey Digital.

Organizations are already seeing material benefits from gen AI use, reporting both cost decreases and revenue jumps in the business units deploying the technology. The survey also provides insights into the kinds of risks presented by gen AI—most notably, inaccuracy—as well as the emerging practices of top performers to mitigate those challenges and capture value.

AI adoption surges

Interest in generative AI has also brightened the spotlight on a broader set of AI capabilities. For the past six years, AI adoption by respondents’ organizations has hovered at about 50 percent. This year, the survey finds that adoption has jumped to 72 percent (Exhibit 1). And the interest is truly global in scope. Our 2023 survey found that AI adoption did not reach 66 percent in any region; however, this year more than two-thirds of respondents in nearly every region say their organizations are using AI. 1 Organizations based in Central and South America are the exception, with 58 percent of respondents working for organizations based in Central and South America reporting AI adoption. Looking by industry, the biggest increase in adoption can be found in professional services. 2 Includes respondents working for organizations focused on human resources, legal services, management consulting, market research, R&D, tax preparation, and training.

Also, responses suggest that companies are now using AI in more parts of the business. Half of respondents say their organizations have adopted AI in two or more business functions, up from less than a third of respondents in 2023 (Exhibit 2).

Gen AI adoption is most common in the functions where it can create the most value

Most respondents now report that their organizations—and they as individuals—are using gen AI. Sixty-five percent of respondents say their organizations are regularly using gen AI in at least one business function, up from one-third last year. The average organization using gen AI is doing so in two functions, most often in marketing and sales and in product and service development—two functions in which previous research determined that gen AI adoption could generate the most value 3 “ The economic potential of generative AI: The next productivity frontier ,” McKinsey, June 14, 2023. —as well as in IT (Exhibit 3). The biggest increase from 2023 is found in marketing and sales, where reported adoption has more than doubled. Yet across functions, only two use cases, both within marketing and sales, are reported by 15 percent or more of respondents.

Gen AI also is weaving its way into respondents’ personal lives. Compared with 2023, respondents are much more likely to be using gen AI at work and even more likely to be using gen AI both at work and in their personal lives (Exhibit 4). The survey finds upticks in gen AI use across all regions, with the largest increases in Asia–Pacific and Greater China. Respondents at the highest seniority levels, meanwhile, show larger jumps in the use of gen Al tools for work and outside of work compared with their midlevel-management peers. Looking at specific industries, respondents working in energy and materials and in professional services report the largest increase in gen AI use.

Investments in gen AI and analytical AI are beginning to create value

The latest survey also shows how different industries are budgeting for gen AI. Responses suggest that, in many industries, organizations are about equally as likely to be investing more than 5 percent of their digital budgets in gen AI as they are in nongenerative, analytical-AI solutions (Exhibit 5). Yet in most industries, larger shares of respondents report that their organizations spend more than 20 percent on analytical AI than on gen AI. Looking ahead, most respondents—67 percent—expect their organizations to invest more in AI over the next three years.

Where are those investments paying off? For the first time, our latest survey explored the value created by gen AI use by business function. The function in which the largest share of respondents report seeing cost decreases is human resources. Respondents most commonly report meaningful revenue increases (of more than 5 percent) in supply chain and inventory management (Exhibit 6). For analytical AI, respondents most often report seeing cost benefits in service operations—in line with what we found last year —as well as meaningful revenue increases from AI use in marketing and sales.

Inaccuracy: The most recognized and experienced risk of gen AI use

As businesses begin to see the benefits of gen AI, they’re also recognizing the diverse risks associated with the technology. These can range from data management risks such as data privacy, bias, or intellectual property (IP) infringement to model management risks, which tend to focus on inaccurate output or lack of explainability. A third big risk category is security and incorrect use.

Respondents to the latest survey are more likely than they were last year to say their organizations consider inaccuracy and IP infringement to be relevant to their use of gen AI, and about half continue to view cybersecurity as a risk (Exhibit 7).

Conversely, respondents are less likely than they were last year to say their organizations consider workforce and labor displacement to be relevant risks and are not increasing efforts to mitigate them.

In fact, inaccuracy— which can affect use cases across the gen AI value chain , ranging from customer journeys and summarization to coding and creative content—is the only risk that respondents are significantly more likely than last year to say their organizations are actively working to mitigate.

Some organizations have already experienced negative consequences from the use of gen AI, with 44 percent of respondents saying their organizations have experienced at least one consequence (Exhibit 8). Respondents most often report inaccuracy as a risk that has affected their organizations, followed by cybersecurity and explainability.

Our previous research has found that there are several elements of governance that can help in scaling gen AI use responsibly, yet few respondents report having these risk-related practices in place. 4 “ Implementing generative AI with speed and safety ,” McKinsey Quarterly , March 13, 2024. For example, just 18 percent say their organizations have an enterprise-wide council or board with the authority to make decisions involving responsible AI governance, and only one-third say gen AI risk awareness and risk mitigation controls are required skill sets for technical talent.

Bringing gen AI capabilities to bear

The latest survey also sought to understand how, and how quickly, organizations are deploying these new gen AI tools. We have found three archetypes for implementing gen AI solutions : takers use off-the-shelf, publicly available solutions; shapers customize those tools with proprietary data and systems; and makers develop their own foundation models from scratch. 5 “ Technology’s generational moment with generative AI: A CIO and CTO guide ,” McKinsey, July 11, 2023. Across most industries, the survey results suggest that organizations are finding off-the-shelf offerings applicable to their business needs—though many are pursuing opportunities to customize models or even develop their own (Exhibit 9). About half of reported gen AI uses within respondents’ business functions are utilizing off-the-shelf, publicly available models or tools, with little or no customization. Respondents in energy and materials, technology, and media and telecommunications are more likely to report significant customization or tuning of publicly available models or developing their own proprietary models to address specific business needs.

Respondents most often report that their organizations required one to four months from the start of a project to put gen AI into production, though the time it takes varies by business function (Exhibit 10). It also depends upon the approach for acquiring those capabilities. Not surprisingly, reported uses of highly customized or proprietary models are 1.5 times more likely than off-the-shelf, publicly available models to take five months or more to implement.

Gen AI high performers are excelling despite facing challenges

Gen AI is a new technology, and organizations are still early in the journey of pursuing its opportunities and scaling it across functions. So it’s little surprise that only a small subset of respondents (46 out of 876) report that a meaningful share of their organizations’ EBIT can be attributed to their deployment of gen AI. Still, these gen AI leaders are worth examining closely. These, after all, are the early movers, who already attribute more than 10 percent of their organizations’ EBIT to their use of gen AI. Forty-two percent of these high performers say more than 20 percent of their EBIT is attributable to their use of nongenerative, analytical AI, and they span industries and regions—though most are at organizations with less than $1 billion in annual revenue. The AI-related practices at these organizations can offer guidance to those looking to create value from gen AI adoption at their own organizations.

To start, gen AI high performers are using gen AI in more business functions—an average of three functions, while others average two. They, like other organizations, are most likely to use gen AI in marketing and sales and product or service development, but they’re much more likely than others to use gen AI solutions in risk, legal, and compliance; in strategy and corporate finance; and in supply chain and inventory management. They’re more than three times as likely as others to be using gen AI in activities ranging from processing of accounting documents and risk assessment to R&D testing and pricing and promotions. While, overall, about half of reported gen AI applications within business functions are utilizing publicly available models or tools, gen AI high performers are less likely to use those off-the-shelf options than to either implement significantly customized versions of those tools or to develop their own proprietary foundation models.

What else are these high performers doing differently? For one thing, they are paying more attention to gen-AI-related risks. Perhaps because they are further along on their journeys, they are more likely than others to say their organizations have experienced every negative consequence from gen AI we asked about, from cybersecurity and personal privacy to explainability and IP infringement. Given that, they are more likely than others to report that their organizations consider those risks, as well as regulatory compliance, environmental impacts, and political stability, to be relevant to their gen AI use, and they say they take steps to mitigate more risks than others do.

Gen AI high performers are also much more likely to say their organizations follow a set of risk-related best practices (Exhibit 11). For example, they are nearly twice as likely as others to involve the legal function and embed risk reviews early on in the development of gen AI solutions—that is, to “ shift left .” They’re also much more likely than others to employ a wide range of other best practices, from strategy-related practices to those related to scaling.

In addition to experiencing the risks of gen AI adoption, high performers have encountered other challenges that can serve as warnings to others (Exhibit 12). Seventy percent say they have experienced difficulties with data, including defining processes for data governance, developing the ability to quickly integrate data into AI models, and an insufficient amount of training data, highlighting the essential role that data play in capturing value. High performers are also more likely than others to report experiencing challenges with their operating models, such as implementing agile ways of working and effective sprint performance management.

About the research

The online survey was in the field from February 22 to March 5, 2024, and garnered responses from 1,363 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Of those respondents, 981 said their organizations had adopted AI in at least one business function, and 878 said their organizations were regularly using gen AI in at least one function. To adjust for differences in response rates, the data are weighted by the contribution of each respondent’s nation to global GDP.

Alex Singla and Alexander Sukharevsky are global coleaders of QuantumBlack, AI by McKinsey, and senior partners in McKinsey’s Chicago and London offices, respectively; Lareina Yee is a senior partner in the Bay Area office, where Michael Chui , a McKinsey Global Institute partner, is a partner; and Bryce Hall is an associate partner in the Washington, DC, office.

They wish to thank Kaitlin Noe, Larry Kanter, Mallika Jhamb, and Shinjini Srivastava for their contributions to this work.

This article was edited by Heather Hanselman, a senior editor in McKinsey’s Atlanta office.

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Moving past gen AI’s honeymoon phase: Seven hard truths for CIOs to get from pilot to scale

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A generative AI reset: Rewiring to turn potential into value in 2024

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Implementing generative AI with speed and safety

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Ethereum Whitepaper

While several years old, we maintain this paper because it continues to serve as a useful reference and an accurate representation of Ethereum and its vision. To learn about the latest developments of Ethereum, and how changes to the protocol are made, we recommend this guide .

Researchers and academics seeking a historical or canonical version of the whitepaper [from December 2014] should use this PDF.

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Introduction to bitcoin and existing concepts.

The concept of decentralized digital currency, as well as alternative applications like property registries, has been around for decades. The anonymous e-cash protocols of the 1980s and the 1990s, mostly reliant on a cryptographic primitive known as Chaumian blinding, provided a currency with a high degree of privacy, but the protocols largely failed to gain traction because of their reliance on a centralized intermediary. In 1998, Wei Dai's b-money (opens in a new tab) became the first proposal to introduce the idea of creating money through solving computational puzzles as well as decentralized consensus, but the proposal was scant on details as to how decentralized consensus could actually be implemented. In 2005, Hal Finney introduced a concept of " reusable proofs of work (opens in a new tab) ", a system which uses ideas from b-money together with Adam Back's computationally difficult Hashcash puzzles to create a concept for a cryptocurrency, but once again fell short of the ideal by relying on trusted computing as a backend. In 2009, a decentralized currency was for the first time implemented in practice by Satoshi Nakamoto, combining established primitives for managing ownership through public key cryptography with a consensus algorithm for keeping track of who owns coins, known as "proof-of-work".

The mechanism behind proof-of-work was a breakthrough in the space because it simultaneously solved two problems. First, it provided a simple and moderately effective consensus algorithm, allowing nodes in the network to collectively agree on a set of canonical updates to the state of the Bitcoin ledger. Second, it provided a mechanism for allowing free entry into the consensus process, solving the political problem of deciding who gets to influence the consensus, while simultaneously preventing sybil attacks. It does this by substituting a formal barrier to participation, such as the requirement to be registered as a unique entity on a particular list, with an economic barrier - the weight of a single node in the consensus voting process is directly proportional to the computing power that the node brings. Since then, an alternative approach has been proposed called proof-of-stake , calculating the weight of a node as being proportional to its currency holdings and not computational resources; the discussion of the relative merits of the two approaches is beyond the scope of this paper but it should be noted that both approaches can be used to serve as the backbone of a cryptocurrency.

Bitcoin As A State Transition System

From a technical standpoint, the ledger of a cryptocurrency such as Bitcoin can be thought of as a state transition system, where there is a "state" consisting of the ownership status of all existing bitcoins and a "state transition function" that takes a state and a transaction and outputs a new state which is the result. In a standard banking system, for example, the state is a balance sheet, a transaction is a request to move $X from A to B, and the state transition function reduces the value in A's account by $X and increases the value in B's account by $X. If A's account has less than $X in the first place, the state transition function returns an error. Hence, one can formally define:

In the banking system defined above:

The "state" in Bitcoin is the collection of all coins (technically, "unspent transaction outputs" or UTXO) that have been minted and not yet spent, with each UTXO having a denomination and an owner (defined by a 20-byte address which is essentially a cryptographic public key fn1 ). A transaction contains one or more inputs, with each input containing a reference to an existing UTXO and a cryptographic signature produced by the private key associated with the owner's address, and one or more outputs, with each output containing a new UTXO to be added to the state.

The state transition function APPLY(S,TX) -> S' can be defined roughly as follows:

If the referenced UTXO is not in S , return an error.
If the provided signature does not match the owner of the UTXO, return an error.
If the sum of the denominations of all input UTXO is less than the sum of the denominations of all output UTXO, return an error.
Return S with all input UTXO removed and all output UTXO added.

The first half of the first step prevents transaction senders from spending coins that do not exist, the second half of the first step prevents transaction senders from spending other people's coins, and the second step enforces conservation of value. In order to use this for payment, the protocol is as follows. Suppose Alice wants to send 11.7 BTC to Bob. First, Alice will look for a set of available UTXO that she owns that totals up to at least 11.7 BTC. Realistically, Alice will not be able to get exactly 11.7 BTC; say that the smallest she can get is 6+4+2=12. She then creates a transaction with those three inputs and two outputs. The first output will be 11.7 BTC with Bob's address as its owner, and the second output will be the remaining 0.3 BTC "change", with the owner being Alice herself.

If we had access to a trustworthy centralized service, this system would be trivial to implement; it could simply be coded exactly as described, using a centralized server's hard drive to keep track of the state. However, with Bitcoin we are trying to build a decentralized currency system, so we will need to combine the state transaction system with a consensus system in order to ensure that everyone agrees on the order of transactions. Bitcoin's decentralized consensus process requires nodes in the network to continuously attempt to produce packages of transactions called "blocks". The network is intended to produce roughly one block every ten minutes, with each block containing a timestamp, a nonce, a reference to (ie. hash of) the previous block and a list of all of the transactions that have taken place since the previous block. Over time, this creates a persistent, ever-growing, "blockchain" that constantly updates to represent the latest state of the Bitcoin ledger.

The algorithm for checking if a block is valid, expressed in this paradigm, is as follows:

Check if the previous block referenced by the block exists and is valid.
Check that the timestamp of the block is greater than that of the previous block fn2 and less than 2 hours into the future
Check that the proof-of-work on the block is valid.
Let S[0] be the state at the end of the previous block.
Suppose TX is the block's transaction list with n transactions. For all i in 0...n-1 , set S[i+1] = APPLY(S[i],TX[i]) If any application returns an error, exit and return false.
Return true, and register S[n] as the state at the end of this block.

Essentially, each transaction in the block must provide a valid state transition from what was the canonical state before the transaction was executed to some new state. Note that the state is not encoded in the block in any way; it is purely an abstraction to be remembered by the validating node and can only be (securely) computed for any block by starting from the genesis state and sequentially applying every transaction in every block. Additionally, note that the order in which the miner includes transactions into the block matters; if there are two transactions A and B in a block such that B spends a UTXO created by A, then the block will be valid if A comes before B but not otherwise.

The one validity condition present in the above list that is not found in other systems is the requirement for "proof-of-work". The precise condition is that the double-SHA256 hash of every block, treated as a 256-bit number, must be less than a dynamically adjusted target, which as of the time of this writing is approximately 2 187 . The purpose of this is to make block creation computationally "hard", thereby preventing sybil attackers from remaking the entire blockchain in their favor. Because SHA256 is designed to be a completely unpredictable pseudorandom function, the only way to create a valid block is simply trial and error, repeatedly incrementing the nonce and seeing if the new hash matches.

At the current target of ~2 187 , the network must make an average of ~2 69 tries before a valid block is found; in general, the target is recalibrated by the network every 2016 blocks so that on average a new block is produced by some node in the network every ten minutes. In order to compensate miners for this computational work, the miner of every block is entitled to include a transaction giving themselves 25 BTC out of nowhere. Additionally, if any transaction has a higher total denomination in its inputs than in its outputs, the difference also goes to the miner as a "transaction fee". Incidentally, this is also the only mechanism by which BTC are issued; the genesis state contained no coins at all.

In order to better understand the purpose of mining, let us examine what happens in the event of a malicious attacker. Since Bitcoin's underlying cryptography is known to be secure, the attacker will target the one part of the Bitcoin system that is not protected by cryptography directly: the order of transactions. The attacker's strategy is simple:

Send 100 BTC to a merchant in exchange for some product (preferably a rapid-delivery digital good)
Wait for the delivery of the product
Produce another transaction sending the same 100 BTC to himself
Try to convince the network that his transaction to himself was the one that came first.

Once step (1) has taken place, after a few minutes some miner will include the transaction in a block, say block number 270000. After about one hour, five more blocks will have been added to the chain after that block, with each of those blocks indirectly pointing to the transaction and thus "confirming" it. At this point, the merchant will accept the payment as finalized and deliver the product; since we are assuming this is a digital good, delivery is instant. Now, the attacker creates another transaction sending the 100 BTC to himself. If the attacker simply releases it into the wild, the transaction will not be processed; miners will attempt to run APPLY(S,TX) and notice that TX consumes a UTXO which is no longer in the state. So instead, the attacker creates a "fork" of the blockchain, starting by mining another version of block 270000 pointing to the same block 269999 as a parent but with the new transaction in place of the old one. Because the block data is different, this requires redoing the proof-of-work. Furthermore, the attacker's new version of block 270000 has a different hash, so the original blocks 270001 to 270005 do not "point" to it; thus, the original chain and the attacker's new chain are completely separate. The rule is that in a fork the longest blockchain is taken to be the truth, and so legitimate miners will work on the 270005 chain while the attacker alone is working on the 270000 chain. In order for the attacker to make his blockchain the longest, he would need to have more computational power than the rest of the network combined in order to catch up (hence, "51% attack").

Merkle Trees

Left: it suffices to present only a small number of nodes in a Merkle tree to give a proof of the validity of a branch.

Right: any attempt to change any part of the Merkle tree will eventually lead to an inconsistency somewhere up the chain.

An important scalability feature of Bitcoin is that the block is stored in a multi-level data structure. The "hash" of a block is actually only the hash of the block header, a roughly 200-byte piece of data that contains the timestamp, nonce, previous block hash and the root hash of a data structure called the Merkle tree storing all transactions in the block. A Merkle tree is a type of binary tree, composed of a set of nodes with a large number of leaf nodes at the bottom of the tree containing the underlying data, a set of intermediate nodes where each node is the hash of its two children, and finally a single root node, also formed from the hash of its two children, representing the "top" of the tree. The purpose of the Merkle tree is to allow the data in a block to be delivered piecemeal: a node can download only the header of a block from one source, the small part of the tree relevant to them from another source, and still be assured that all of the data is correct. The reason why this works is that hashes propagate upward: if a malicious user attempts to swap in a fake transaction into the bottom of a Merkle tree, this change will cause a change in the node above, and then a change in the node above that, finally changing the root of the tree and therefore the hash of the block, causing the protocol to register it as a completely different block (almost certainly with an invalid proof-of-work).

The Merkle tree protocol is arguably essential to long-term sustainability. A "full node" in the Bitcoin network, one that stores and processes the entirety of every block, takes up about 15 GB of disk space in the Bitcoin network as of April 2014, and is growing by over a gigabyte per month. Currently, this is viable for some desktop computers and not phones, and later on in the future only businesses and hobbyists will be able to participate. A protocol known as "simplified payment verification" (SPV) allows for another class of nodes to exist, called "light nodes", which download the block headers, verify the proof-of-work on the block headers, and then download only the "branches" associated with transactions that are relevant to them. This allows light nodes to determine with a strong guarantee of security what the status of any Bitcoin transaction, and their current balance, is while downloading only a very small portion of the entire blockchain.

Alternative Blockchain Applications

The idea of taking the underlying blockchain idea and applying it to other concepts also has a long history. In 2005, Nick Szabo came out with the concept of " secure property titles with owner authority (opens in a new tab) ", a document describing how "new advances in replicated database technology" will allow for a blockchain-based system for storing a registry of who owns what land, creating an elaborate framework including concepts such as homesteading, adverse possession and Georgian land tax. However, there was unfortunately no effective replicated database system available at the time, and so the protocol was never implemented in practice. After 2009, however, once Bitcoin's decentralized consensus was developed a number of alternative applications rapidly began to emerge.

Namecoin - created in 2010, Namecoin (opens in a new tab) is best described as a decentralized name registration database. In decentralized protocols like Tor, Bitcoin and BitMessage, there needs to be some way of identifying accounts so that other people can interact with them, but in all existing solutions the only kind of identifier available is a pseudorandom hash like 1LW79wp5ZBqaHW1jL5TCiBCrhQYtHagUWy . Ideally, one would like to be able to have an account with a name like "george". However, the problem is that if one person can create an account named "george" then someone else can use the same process to register "george" for themselves as well and impersonate them. The only solution is a first-to-file paradigm, where the first registerer succeeds and the second fails - a problem perfectly suited for the Bitcoin consensus protocol. Namecoin is the oldest, and most successful, implementation of a name registration system using such an idea.
Colored coins - the purpose of colored coins (opens in a new tab) is to serve as a protocol to allow people to create their own digital currencies - or, in the important trivial case of a currency with one unit, digital tokens, on the Bitcoin blockchain. In the colored coins protocol, one "issues" a new currency by publicly assigning a color to a specific Bitcoin UTXO, and the protocol recursively defines the color of other UTXO to be the same as the color of the inputs that the transaction creating them spent (some special rules apply in the case of mixed-color inputs). This allows users to maintain wallets containing only UTXO of a specific color and send them around much like regular bitcoins, backtracking through the blockchain to determine the color of any UTXO that they receive.
Metacoins - the idea behind a metacoin is to have a protocol that lives on top of Bitcoin, using Bitcoin transactions to store metacoin transactions but having a different state transition function, APPLY' . Because the metacoin protocol cannot prevent invalid metacoin transactions from appearing in the Bitcoin blockchain, a rule is added that if APPLY'(S,TX) returns an error, the protocol defaults to APPLY'(S,TX) = S . This provides an easy mechanism for creating an arbitrary cryptocurrency protocol, potentially with advanced features that cannot be implemented inside of Bitcoin itself, but with a very low development cost since the complexities of mining and networking are already handled by the Bitcoin protocol. Metacoins have been used to implement some classes of financial contracts, name registration and decentralized exchange.

Thus, in general, there are two approaches toward building a consensus protocol: building an independent network, and building a protocol on top of Bitcoin. The former approach, while reasonably successful in the case of applications like Namecoin, is difficult to implement; each individual implementation needs to bootstrap an independent blockchain, as well as building and testing all of the necessary state transition and networking code. Additionally, we predict that the set of applications for decentralized consensus technology will follow a power law distribution where the vast majority of applications would be too small to warrant their own blockchain, and we note that there exist large classes of decentralized applications, particularly decentralized autonomous organizations, that need to interact with each other.

The Bitcoin-based approach, on the other hand, has the flaw that it does not inherit the simplified payment verification features of Bitcoin. SPV works for Bitcoin because it can use blockchain depth as a proxy for validity; at some point, once the ancestors of a transaction go far enough back, it is safe to say that they were legitimately part of the state. Blockchain-based meta-protocols, on the other hand, cannot force the blockchain not to include transactions that are not valid within the context of their own protocols. Hence, a fully secure SPV meta-protocol implementation would need to backward scan all the way to the beginning of the Bitcoin blockchain to determine whether or not certain transactions are valid. Currently, all "light" implementations of Bitcoin-based meta-protocols rely on a trusted server to provide the data, arguably a highly suboptimal result especially when one of the primary purposes of a cryptocurrency is to eliminate the need for trust.

Even without any extensions, the Bitcoin protocol actually does facilitate a weak version of a concept of "smart contracts". UTXO in Bitcoin can be owned not just by a public key, but also by a more complicated script expressed in a simple stack-based programming language. In this paradigm, a transaction spending that UTXO must provide data that satisfies the script. Indeed, even the basic public key ownership mechanism is implemented via a script: the script takes an elliptic curve signature as input, verifies it against the transaction and the address that owns the UTXO, and returns 1 if the verification is successful and 0 otherwise. Other, more complicated, scripts exist for various additional use cases. For example, one can construct a script that requires signatures from two out of a given three private keys to validate ("multisig"), a setup useful for corporate accounts, secure savings accounts and some merchant escrow situations. Scripts can also be used to pay bounties for solutions to computational problems, and one can even construct a script that says something like "this Bitcoin UTXO is yours if you can provide an SPV proof that you sent a Dogecoin transaction of this denomination to me", essentially allowing decentralized cross-cryptocurrency exchange.

However, the scripting language as implemented in Bitcoin has several important limitations:

Lack of Turing-completeness - that is to say, while there is a large subset of computation that the Bitcoin scripting language supports, it does not nearly support everything. The main category that is missing is loops. This is done to avoid infinite loops during transaction verification; theoretically it is a surmountable obstacle for script programmers, since any loop can be simulated by simply repeating the underlying code many times with an if statement, but it does lead to scripts that are very space-inefficient. For example, implementing an alternative elliptic curve signature algorithm would likely require 256 repeated multiplication rounds all individually included in the code.
Value-blindness - there is no way for a UTXO script to provide fine-grained control over the amount that can be withdrawn. For example, one powerful use case of an oracle contract would be a hedging contract, where A and B put in $1000 worth of BTC and after 30 days the script sends $1000 worth of BTC to A and the rest to B. This would require an oracle to determine the value of 1 BTC in USD, but even then it is a massive improvement in terms of trust and infrastructure requirement over the fully centralized solutions that are available now. However, because UTXO are all-or-nothing, the only way to achieve this is through the very inefficient hack of having many UTXO of varying denominations (eg. one UTXO of 2 k for every k up to 30) and having the oracle pick which UTXO to send to A and which to B.
Lack of state - UTXO can either be spent or unspent; there is no opportunity for multi-stage contracts or scripts which keep any other internal state beyond that. This makes it hard to make multi-stage options contracts, decentralized exchange offers or two-stage cryptographic commitment protocols (necessary for secure computational bounties). It also means that UTXO can only be used to build simple, one-off contracts and not more complex "stateful" contracts such as decentralized organizations, and makes meta-protocols difficult to implement. Binary state combined with value-blindness also mean that another important application, withdrawal limits, is impossible.
Blockchain-blindness - UTXO are blind to blockchain data such as the nonce, the timestamp and previous block hash. This severely limits applications in gambling, and several other categories, by depriving the scripting language of a potentially valuable source of randomness.

Thus, we see three approaches to building advanced applications on top of cryptocurrency: building a new blockchain, using scripting on top of Bitcoin, and building a meta-protocol on top of Bitcoin. Building a new blockchain allows for unlimited freedom in building a feature set, but at the cost of development time, bootstrapping effort and security. Using scripting is easy to implement and standardize, but is very limited in its capabilities, and meta-protocols, while easy, suffer from faults in scalability. With Ethereum, we intend to build an alternative framework that provides even larger gains in ease of development as well as even stronger light client properties, while at the same time allowing applications to share an economic environment and blockchain security.

The intent of Ethereum is to create an alternative protocol for building decentralized applications, providing a different set of tradeoffs that we believe will be very useful for a large class of decentralized applications, with particular emphasis on situations where rapid development time, security for small and rarely used applications, and the ability of different applications to very efficiently interact, are important. Ethereum does this by building what is essentially the ultimate abstract foundational layer: a blockchain with a built-in Turing-complete programming language, allowing anyone to write smart contracts and decentralized applications where they can create their own arbitrary rules for ownership, transaction formats and state transition functions. A bare-bones version of Namecoin can be written in two lines of code, and other protocols like currencies and reputation systems can be built in under twenty. Smart contracts, cryptographic "boxes" that contain value and only unlock it if certain conditions are met, can also be built on top of the platform, with vastly more power than that offered by Bitcoin scripting because of the added powers of Turing-completeness, value-awareness, blockchain-awareness and state.

Ethereum Accounts

In Ethereum, the state is made up of objects called "accounts", with each account having a 20-byte address and state transitions being direct transfers of value and information between accounts. An Ethereum account contains four fields:

The nonce , a counter used to make sure each transaction can only be processed once
The account's current ether balance
The account's contract code , if present
The account's storage (empty by default)

"Ether" is the main internal crypto-fuel of Ethereum, and is used to pay transaction fees. In general, there are two types of accounts: externally owned accounts , controlled by private keys, and contract accounts , controlled by their contract code. An externally owned account has no code, and one can send messages from an externally owned account by creating and signing a transaction; in a contract account, every time the contract account receives a message its code activates, allowing it to read and write to internal storage and send other messages or create contracts in turn.

Note that "contracts" in Ethereum should not be seen as something that should be "fulfilled" or "complied with"; rather, they are more like "autonomous agents" that live inside of the Ethereum execution environment, always executing a specific piece of code when "poked" by a message or transaction, and having direct control over their own ether balance and their own key/value store to keep track of persistent variables.

Messages and Transactions

The term "transaction" is used in Ethereum to refer to the signed data package that stores a message to be sent from an externally owned account. Transactions contain:

The recipient of the message
A signature identifying the sender
The amount of ether to transfer from the sender to the recipient
An optional data field
A STARTGAS value, representing the maximum number of computational steps the transaction execution is allowed to take
A GASPRICE value, representing the fee the sender pays per computational step

The first three are standard fields expected in any cryptocurrency. The data field has no function by default, but the virtual machine has an opcode using which a contract can access the data; as an example use case, if a contract is functioning as an on-blockchain domain registration service, then it may wish to interpret the data being passed to it as containing two "fields", the first field being a domain to register and the second field being the IP address to register it to. The contract would read these values from the message data and appropriately place them in storage.

The STARTGAS and GASPRICE fields are crucial for Ethereum's anti-denial of service model. In order to prevent accidental or hostile infinite loops or other computational wastage in code, each transaction is required to set a limit to how many computational steps of code execution it can use. The fundamental unit of computation is "gas"; usually, a computational step costs 1 gas, but some operations cost higher amounts of gas because they are more computationally expensive, or increase the amount of data that must be stored as part of the state. There is also a fee of 5 gas for every byte in the transaction data. The intent of the fee system is to require an attacker to pay proportionately for every resource that they consume, including computation, bandwidth and storage; hence, any transaction that leads to the network consuming a greater amount of any of these resources must have a gas fee roughly proportional to the increment.

Contracts have the ability to send "messages" to other contracts. Messages are virtual objects that are never serialized and exist only in the Ethereum execution environment. A message contains:

The sender of the message (implicit)
The amount of ether to transfer alongside the message
A STARTGAS value

Essentially, a message is like a transaction, except it is produced by a contract and not an external actor. A message is produced when a contract currently executing code executes the CALL opcode, which produces and executes a message. Like a transaction, a message leads to the recipient account running its code. Thus, contracts can have relationships with other contracts in exactly the same way that external actors can.

Note that the gas allowance assigned by a transaction or contract applies to the total gas consumed by that transaction and all sub-executions. For example, if an external actor A sends a transaction to B with 1000 gas, and B consumes 600 gas before sending a message to C, and the internal execution of C consumes 300 gas before returning, then B can spend another 100 gas before running out of gas.

Ethereum State Transition Function

The Ethereum state transition function, APPLY(S,TX) -> S' can be defined as follows:

Check if the transaction is well-formed (ie. has the right number of values), the signature is valid, and the nonce matches the nonce in the sender's account. If not, return an error.
Calculate the transaction fee as STARTGAS * GASPRICE , and determine the sending address from the signature. Subtract the fee from the sender's account balance and increment the sender's nonce. If there is not enough balance to spend, return an error.
Initialize GAS = STARTGAS , and take off a certain quantity of gas per byte to pay for the bytes in the transaction.
Transfer the transaction value from the sender's account to the receiving account. If the receiving account does not yet exist, create it. If the receiving account is a contract, run the contract's code either to completion or until the execution runs out of gas.
If the value transfer failed because the sender did not have enough money, or the code execution ran out of gas, revert all state changes except the payment of the fees, and add the fees to the miner's account.
Otherwise, refund the fees for all remaining gas to the sender, and send the fees paid for gas consumed to the miner.

For example, suppose that the contract's code is:

Note that in reality the contract code is written in the low-level EVM code; this example is written in Serpent, one of our high-level languages, for clarity, and can be compiled down to EVM code. Suppose that the contract's storage starts off empty, and a transaction is sent with 10 ether value, 2000 gas, 0.001 ether gasprice, and 64 bytes of data, with bytes 0-31 representing the number 2 and bytes 32-63 representing the string CHARLIE . The process for the state transition function in this case is as follows:

Check that the transaction is valid and well formed.
Check that the transaction sender has at least 2000 * 0.001 = 2 ether. If it is, then subtract 2 ether from the sender's account.
Initialize gas = 2000; assuming the transaction is 170 bytes long and the byte-fee is 5, subtract 850 so that there is 1150 gas left.
Subtract 10 more ether from the sender's account, and add it to the contract's account.
Run the code. In this case, this is simple: it checks if the contract's storage at index 2 is used, notices that it is not, and so it sets the storage at index 2 to the value CHARLIE . Suppose this takes 187 gas, so the remaining amount of gas is 1150 - 187 = 963
Add 963 * 0.001 = 0.963 ether back to the sender's account, and return the resulting state.

If there was no contract at the receiving end of the transaction, then the total transaction fee would simply be equal to the provided GASPRICE multiplied by the length of the transaction in bytes, and the data sent alongside the transaction would be irrelevant.

Note that messages work equivalently to transactions in terms of reverts: if a message execution runs out of gas, then that message's execution, and all other executions triggered by that execution, revert, but parent executions do not need to revert. This means that it is "safe" for a contract to call another contract, as if A calls B with G gas then A's execution is guaranteed to lose at most G gas. Finally, note that there is an opcode, CREATE , that creates a contract; its execution mechanics are generally similar to CALL , with the exception that the output of the execution determines the code of a newly created contract.

Code Execution

The code in Ethereum contracts is written in a low-level, stack-based bytecode language, referred to as "Ethereum virtual machine code" or "EVM code". The code consists of a series of bytes, where each byte represents an operation. In general, code execution is an infinite loop that consists of repeatedly carrying out the operation at the current program counter (which begins at zero) and then incrementing the program counter by one, until the end of the code is reached or an error or STOP or RETURN instruction is detected. The operations have access to three types of space in which to store data:

The stack , a last-in-first-out container to which values can be pushed and popped
Memory , an infinitely expandable byte array
The contract's long-term storage , a key/value store. Unlike stack and memory, which reset after computation ends, storage persists for the long term.

The code can also access the value, sender and data of the incoming message, as well as block header data, and the code can also return a byte array of data as an output.

The formal execution model of EVM code is surprisingly simple. While the Ethereum virtual machine is running, its full computational state can be defined by the tuple (block_state, transaction, message, code, memory, stack, pc, gas) , where block_state is the global state containing all accounts and includes balances and storage. At the start of every round of execution, the current instruction is found by taking the pc th byte of code (or 0 if pc >= len(code) ), and each instruction has its own definition in terms of how it affects the tuple. For example, ADD pops two items off the stack and pushes their sum, reduces gas by 1 and increments pc by 1, and SSTORE pops the top two items off the stack and inserts the second item into the contract's storage at the index specified by the first item. Although there are many ways to optimize Ethereum virtual machine execution via just-in-time compilation, a basic implementation of Ethereum can be done in a few hundred lines of code.

Blockchain and Mining

The Ethereum blockchain is in many ways similar to the Bitcoin blockchain, although it does have some differences. The main difference between Ethereum and Bitcoin with regard to the blockchain architecture is that, unlike Bitcoin, Ethereum blocks contain a copy of both the transaction list and the most recent state. Aside from that, two other values, the block number and the difficulty, are also stored in the block. The basic block validation algorithm in Ethereum is as follows:

Check if the previous block referenced exists and is valid.
Check that the timestamp of the block is greater than that of the referenced previous block and less than 15 minutes into the future
Check that the block number, difficulty, transaction root, uncle root and gas limit (various low-level Ethereum-specific concepts) are valid.
Let TX be the block's transaction list, with n transactions. For all i in 0...n-1 , set S[i+1] = APPLY(S[i],TX[i]) . If any applications returns an error, or if the total gas consumed in the block up until this point exceeds the GASLIMIT , return an error.
Let S_FINAL be S[n] , but adding the block reward paid to the miner.
Check if the Merkle tree root of the state S_FINAL is equal to the final state root provided in the block header. If it is, the block is valid; otherwise, it is not valid.

The approach may seem highly inefficient at first glance, because it needs to store the entire state with each block, but in reality efficiency should be comparable to that of Bitcoin. The reason is that the state is stored in the tree structure, and after every block only a small part of the tree needs to be changed. Thus, in general, between two adjacent blocks the vast majority of the tree should be the same, and therefore the data can be stored once and referenced twice using pointers (ie. hashes of subtrees). A special kind of tree known as a "Patricia tree" is used to accomplish this, including a modification to the Merkle tree concept that allows for nodes to be inserted and deleted, and not just changed, efficiently. Additionally, because all of the state information is part of the last block, there is no need to store the entire blockchain history - a strategy which, if it could be applied to Bitcoin, can be calculated to provide 5-20x savings in space.

A commonly asked question is "where" contract code is executed, in terms of physical hardware. This has a simple answer: the process of executing contract code is part of the definition of the state transition function, which is part of the block validation algorithm, so if a transaction is added into block B the code execution spawned by that transaction will be executed by all nodes, now and in the future, that download and validate block B .

Applications

In general, there are three types of applications on top of Ethereum. The first category is financial applications, providing users with more powerful ways of managing and entering into contracts using their money. This includes sub-currencies, financial derivatives, hedging contracts, savings wallets, wills, and ultimately even some classes of full-scale employment contracts. The second category is semi-financial applications, where money is involved but there is also a heavy non-monetary side to what is being done; a perfect example is self-enforcing bounties for solutions to computational problems. Finally, there are applications such as online voting and decentralized governance that are not financial at all.

Token Systems

On-blockchain token systems have many applications ranging from sub-currencies representing assets such as USD or gold to company stocks, individual tokens representing smart property, secure unforgeable coupons, and even token systems with no ties to conventional value at all, used as point systems for incentivization. Token systems are surprisingly easy to implement in Ethereum. The key point to understand is that all a currency, or token system, fundamentally is, is a database with one operation: subtract X units from A and give X units to B, with the proviso that (i) A had at least X units before the transaction and (2) the transaction is approved by A. All that it takes to implement a token system is to implement this logic into a contract.

The basic code for implementing a token system in Serpent looks as follows:

This is essentially a literal implementation of the "banking system" state transition function described further above in this document. A few extra lines of code need to be added to provide for the initial step of distributing the currency units in the first place and a few other edge cases, and ideally a function would be added to let other contracts query for the balance of an address. But that's all there is to it. Theoretically, Ethereum-based token systems acting as sub-currencies can potentially include another important feature that on-chain Bitcoin-based meta-currencies lack: the ability to pay transaction fees directly in that currency. The way this would be implemented is that the contract would maintain an ether balance with which it would refund ether used to pay fees to the sender, and it would refill this balance by collecting the internal currency units that it takes in fees and reselling them in a constant running auction. Users would thus need to "activate" their accounts with ether, but once the ether is there it would be reusable because the contract would refund it each time.

Financial derivatives and Stable-Value Currencies

Financial derivatives are the most common application of a "smart contract", and one of the simplest to implement in code. The main challenge in implementing financial contracts is that the majority of them require reference to an external price ticker; for example, a very desirable application is a smart contract that hedges against the volatility of ether (or another cryptocurrency) with respect to the US dollar, but doing this requires the contract to know what the value of ETH/USD is. The simplest way to do this is through a "data feed" contract maintained by a specific party (eg. NASDAQ) designed so that that party has the ability to update the contract as needed, and providing an interface that allows other contracts to send a message to that contract and get back a response that provides the price.

Given that critical ingredient, the hedging contract would look as follows:

Wait for party A to input 1000 ether.
Wait for party B to input 1000 ether.
Record the USD value of 1000 ether, calculated by querying the data feed contract, in storage, say this is $x.
After 30 days, allow A or B to "reactivate" the contract in order to send $x worth of ether (calculated by querying the data feed contract again to get the new price) to A and the rest to B.

Such a contract would have significant potential in crypto-commerce. One of the main problems cited about cryptocurrency is the fact that it's volatile; although many users and merchants may want the security and convenience of dealing with cryptographic assets, they many not wish to face that prospect of losing 23% of the value of their funds in a single day. Up until now, the most commonly proposed solution has been issuer-backed assets; the idea is that an issuer creates a sub-currency in which they have the right to issue and revoke units, and provide one unit of the currency to anyone who provides them (offline) with one unit of a specified underlying asset (eg. gold, USD). The issuer then promises to provide one unit of the underlying asset to anyone who sends back one unit of the crypto-asset. This mechanism allows any non-cryptographic asset to be "uplifted" into a cryptographic asset, provided that the issuer can be trusted.

In practice, however, issuers are not always trustworthy, and in some cases the banking infrastructure is too weak, or too hostile, for such services to exist. Financial derivatives provide an alternative. Here, instead of a single issuer providing the funds to back up an asset, a decentralized market of speculators, betting that the price of a cryptographic reference asset (eg. ETH) will go up, plays that role. Unlike issuers, speculators have no option to default on their side of the bargain because the hedging contract holds their funds in escrow. Note that this approach is not fully decentralized, because a trusted source is still needed to provide the price ticker, although arguably even still this is a massive improvement in terms of reducing infrastructure requirements (unlike being an issuer, issuing a price feed requires no licenses and can likely be categorized as free speech) and reducing the potential for fraud.

Identity and Reputation Systems

The earliest alternative cryptocurrency of all, Namecoin (opens in a new tab) , attempted to use a Bitcoin-like blockchain to provide a name registration system, where users can register their names in a public database alongside other data. The major cited use case is for a DNS (opens in a new tab) system, mapping domain names like "bitcoin.org" (or, in Namecoin's case, "bitcoin.bit") to an IP address. Other use cases include email authentication and potentially more advanced reputation systems. Here is the basic contract to provide a Namecoin-like name registration system on Ethereum:

The contract is very simple; all it is a database inside the Ethereum network that can be added to, but not modified or removed from. Anyone can register a name with some value, and that registration then sticks forever. A more sophisticated name registration contract will also have a "function clause" allowing other contracts to query it, as well as a mechanism for the "owner" (ie. the first registerer) of a name to change the data or transfer ownership. One can even add reputation and web-of-trust functionality on top.

Decentralized File Storage

Over the past few years, there have emerged a number of popular online file storage startups, the most prominent being Dropbox, seeking to allow users to upload a backup of their hard drive and have the service store the backup and allow the user to access it in exchange for a monthly fee. However, at this point the file storage market is at times relatively inefficient; a cursory look at various existing solutions shows that, particularly at the "uncanny valley" 20-200 GB level at which neither free quotas nor enterprise-level discounts kick in, monthly prices for mainstream file storage costs are such that you are paying for more than the cost of the entire hard drive in a single month. Ethereum contracts can allow for the development of a decentralized file storage ecosystem, where individual users can earn small quantities of money by renting out their own hard drives and unused space can be used to further drive down the costs of file storage.

The key underpinning piece of such a device would be what we have termed the "decentralized Dropbox contract". This contract works as follows. First, one splits the desired data up into blocks, encrypting each block for privacy, and builds a Merkle tree out of it. One then makes a contract with the rule that, every N blocks, the contract would pick a random index in the Merkle tree (using the previous block hash, accessible from contract code, as a source of randomness), and give X ether to the first entity to supply a transaction with a simplified payment verification-like proof of ownership of the block at that particular index in the tree. When a user wants to re-download their file, they can use a micropayment channel protocol (eg. pay 1 szabo per 32 kilobytes) to recover the file; the most fee-efficient approach is for the payer not to publish the transaction until the end, instead replacing the transaction with a slightly more lucrative one with the same nonce after every 32 kilobytes.

An important feature of the protocol is that, although it may seem like one is trusting many random nodes not to decide to forget the file, one can reduce that risk down to near-zero by splitting the file into many pieces via secret sharing, and watching the contracts to see each piece is still in some node's possession. If a contract is still paying out money, that provides a cryptographic proof that someone out there is still storing the file.

Decentralized Autonomous Organizations

The general concept of a "decentralized autonomous organization" is that of a virtual entity that has a certain set of members or shareholders which, perhaps with a 67% majority, have the right to spend the entity's funds and modify its code. The members would collectively decide on how the organization should allocate its funds. Methods for allocating a DAO's funds could range from bounties, salaries to even more exotic mechanisms such as an internal currency to reward work. This essentially replicates the legal trappings of a traditional company or nonprofit but using only cryptographic blockchain technology for enforcement. So far much of the talk around DAOs has been around the "capitalist" model of a "decentralized autonomous corporation" (DAC) with dividend-receiving shareholders and tradable shares; an alternative, perhaps described as a "decentralized autonomous community", would have all members have an equal share in the decision making and require 67% of existing members to agree to add or remove a member. The requirement that one person can only have one membership would then need to be enforced collectively by the group.

A general outline for how to code a DAO is as follows. The simplest design is simply a piece of self-modifying code that changes if two thirds of members agree on a change. Although code is theoretically immutable, one can easily get around this and have de-facto mutability by having chunks of the code in separate contracts, and having the address of which contracts to call stored in the modifiable storage. In a simple implementation of such a DAO contract, there would be three transaction types, distinguished by the data provided in the transaction:

[0,i,K,V] to register a proposal with index i to change the address at storage index K to value V
[1,i] to register a vote in favor of proposal i
[2,i] to finalize proposal i if enough votes have been made

The contract would then have clauses for each of these. It would maintain a record of all open storage changes, along with a list of who voted for them. It would also have a list of all members. When any storage change gets to two thirds of members voting for it, a finalizing transaction could execute the change. A more sophisticated skeleton would also have built-in voting ability for features like sending a transaction, adding members and removing members, and may even provide for Liquid Democracy (opens in a new tab) -style vote delegation (ie. anyone can assign someone to vote for them, and assignment is transitive so if A assigns B and B assigns C then C determines A's vote). This design would allow the DAO to grow organically as a decentralized community, allowing people to eventually delegate the task of filtering out who is a member to specialists, although unlike in the "current system" specialists can easily pop in and out of existence over time as individual community members change their alignments.

An alternative model is for a decentralized corporation, where any account can have zero or more shares, and two thirds of the shares are required to make a decision. A complete skeleton would involve asset management functionality, the ability to make an offer to buy or sell shares, and the ability to accept offers (preferably with an order-matching mechanism inside the contract). Delegation would also exist Liquid Democracy-style, generalizing the concept of a "board of directors".

Further Applications

1. Savings wallets . Suppose that Alice wants to keep her funds safe, but is worried that she will lose or someone will hack her private key. She puts ether into a contract with Bob, a bank, as follows:

Alice alone can withdraw a maximum of 1% of the funds per day.
Bob alone can withdraw a maximum of 1% of the funds per day, but Alice has the ability to make a transaction with her key shutting off this ability.
Alice and Bob together can withdraw anything.

Normally, 1% per day is enough for Alice, and if Alice wants to withdraw more she can contact Bob for help. If Alice's key gets hacked, she runs to Bob to move the funds to a new contract. If she loses her key, Bob will get the funds out eventually. If Bob turns out to be malicious, then she can turn off his ability to withdraw.

2. Crop insurance . One can easily make a financial derivatives contract but using a data feed of the weather instead of any price index. If a farmer in Iowa purchases a derivative that pays out inversely based on the precipitation in Iowa, then if there is a drought, the farmer will automatically receive money and if there is enough rain the farmer will be happy because their crops would do well. This can be expanded to natural disaster insurance generally.

3. A decentralized data feed . For financial contracts for difference, it may actually be possible to decentralize the data feed via a protocol called " SchellingCoin (opens in a new tab) ". SchellingCoin basically works as follows: N parties all put into the system the value of a given datum (eg. the ETH/USD price), the values are sorted, and everyone between the 25th and 75th percentile gets one token as a reward. Everyone has the incentive to provide the answer that everyone else will provide, and the only value that a large number of players can realistically agree on is the obvious default: the truth. This creates a decentralized protocol that can theoretically provide any number of values, including the ETH/USD price, the temperature in Berlin or even the result of a particular hard computation.

4. Smart multisignature escrow . Bitcoin allows multisignature transaction contracts where, for example, three out of a given five keys can spend the funds. Ethereum allows for more granularity; for example, four out of five can spend everything, three out of five can spend up to 10% per day, and two out of five can spend up to 0.5% per day. Additionally, Ethereum multisig is asynchronous - two parties can register their signatures on the blockchain at different times and the last signature will automatically send the transaction.

5. Cloud computing . The EVM technology can also be used to create a verifiable computing environment, allowing users to ask others to carry out computations and then optionally ask for proofs that computations at certain randomly selected checkpoints were done correctly. This allows for the creation of a cloud computing market where any user can participate with their desktop, laptop or specialized server, and spot-checking together with security deposits can be used to ensure that the system is trustworthy (ie. nodes cannot profitably cheat). Although such a system may not be suitable for all tasks; tasks that require a high level of inter-process communication, for example, cannot easily be done on a large cloud of nodes. Other tasks, however, are much easier to parallelize; projects like SETI@home, folding@home and genetic algorithms can easily be implemented on top of such a platform.

6. Peer-to-peer gambling . Any number of peer-to-peer gambling protocols, such as Frank Stajano and Richard Clayton's Cyberdice (opens in a new tab) , can be implemented on the Ethereum blockchain. The simplest gambling protocol is actually simply a contract for difference on the next block hash, and more advanced protocols can be built up from there, creating gambling services with near-zero fees that have no ability to cheat.

7. Prediction markets . Provided an oracle or SchellingCoin, prediction markets are also easy to implement, and prediction markets together with SchellingCoin may prove to be the first mainstream application of futarchy (opens in a new tab) as a governance protocol for decentralized organizations.

8. On-chain decentralized marketplaces , using the identity and reputation system as a base.

Miscellanea And Concerns

Modified ghost implementation.

The "Greedy Heaviest Observed Subtree" (GHOST) protocol is an innovation first introduced by Yonatan Sompolinsky and Aviv Zohar in December 2013 (opens in a new tab) . The motivation behind GHOST is that blockchains with fast confirmation times currently suffer from reduced security due to a high stale rate - because blocks take a certain time to propagate through the network, if miner A mines a block and then miner B happens to mine another block before miner A's block propagates to B, miner B's block will end up wasted and will not contribute to network security. Furthermore, there is a centralization issue: if miner A is a mining pool with 30% hashpower and B has 10% hashpower, A will have a risk of producing a stale block 70% of the time (since the other 30% of the time A produced the last block and so will get mining data immediately) whereas B will have a risk of producing a stale block 90% of the time. Thus, if the block interval is short enough for the stale rate to be high, A will be substantially more efficient simply by virtue of its size. With these two effects combined, blockchains which produce blocks quickly are very likely to lead to one mining pool having a large enough percentage of the network hashpower to have de facto control over the mining process.

As described by Sompolinsky and Zohar, GHOST solves the first issue of network security loss by including stale blocks in the calculation of which chain is the "longest"; that is to say, not just the parent and further ancestors of a block, but also the stale descendants of the block's ancestor (in Ethereum jargon, "uncles") are added to the calculation of which block has the largest total proof-of-work backing it. To solve the second issue of centralization bias, we go beyond the protocol described by Sompolinsky and Zohar, and also provide block rewards to stales: a stale block receives 87.5% of its base reward, and the nephew that includes the stale block receives the remaining 12.5%. Transaction fees, however, are not awarded to uncles.

Ethereum implements a simplified version of GHOST which only goes down seven levels. Specifically, it is defined as follows:

A block must specify a parent, and it must specify 0 or more uncles
It must be a direct child of the kth generation ancestor of B, where 2 <= k <= 7 .
It cannot be an ancestor of B
An uncle must be a valid block header, but does not need to be a previously verified or even valid block
An uncle must be different from all uncles included in previous blocks and all other uncles included in the same block (non-double-inclusion)
For every uncle U in block B, the miner of B gets an additional 3.125% added to its coinbase reward and the miner of U gets 93.75% of a standard coinbase reward.

This limited version of GHOST, with uncles includable only up to 7 generations, was used for two reasons. First, unlimited GHOST would include too many complications into the calculation of which uncles for a given block are valid. Second, unlimited GHOST with compensation as used in Ethereum removes the incentive for a miner to mine on the main chain and not the chain of a public attacker.

Because every transaction published into the blockchain imposes on the network the cost of needing to download and verify it, there is a need for some regulatory mechanism, typically involving transaction fees, to prevent abuse. The default approach, used in Bitcoin, is to have purely voluntary fees, relying on miners to act as the gatekeepers and set dynamic minimums. This approach has been received very favorably in the Bitcoin community particularly because it is "market-based", allowing supply and demand between miners and transaction senders determine the price. The problem with this line of reasoning is, however, that transaction processing is not a market; although it is intuitively attractive to construe transaction processing as a service that the miner is offering to the sender, in reality every transaction that a miner includes will need to be processed by every node in the network, so the vast majority of the cost of transaction processing is borne by third parties and not the miner that is making the decision of whether or not to include it. Hence, tragedy-of-the-commons problems are very likely to occur.

However, as it turns out this flaw in the market-based mechanism, when given a particular inaccurate simplifying assumption, magically cancels itself out. The argument is as follows. Suppose that:

A transaction leads to k operations, offering the reward kR to any miner that includes it where R is set by the sender and k and R are (roughly) visible to the miner beforehand.
An operation has a processing cost of C to any node (ie. all nodes have equal efficiency)
There are N mining nodes, each with exactly equal processing power (ie. 1/N of total)
No non-mining full nodes exist.

A miner would be willing to process a transaction if the expected reward is greater than the cost. Thus, the expected reward is kR/N since the miner has a 1/N chance of processing the next block, and the processing cost for the miner is simply kC . Hence, miners will include transactions where kR/N > kC , or R > NC . Note that R is the per-operation fee provided by the sender, and is thus a lower bound on the benefit that the sender derives from the transaction, and NC is the cost to the entire network together of processing an operation. Hence, miners have the incentive to include only those transactions for which the total utilitarian benefit exceeds the cost.

However, there are several important deviations from those assumptions in reality:

The miner does pay a higher cost to process the transaction than the other verifying nodes, since the extra verification time delays block propagation and thus increases the chance the block will become a stale.
There do exist nonmining full nodes.
The mining power distribution may end up radically inegalitarian in practice.
Speculators, political enemies and crazies whose utility function includes causing harm to the network do exist, and they can cleverly set up contracts where their cost is much lower than the cost paid by other verifying nodes.

(1) provides a tendency for the miner to include fewer transactions, and (2) increases NC ; hence, these two effects at least partially cancel each other out. How? (opens in a new tab) (3) and (4) are the major issue; to solve them we simply institute a floating cap: no block can have more operations than BLK_LIMIT_FACTOR times the long-term exponential moving average. Specifically:

BLK_LIMIT_FACTOR and EMA_FACTOR are constants that will be set to 65536 and 1.5 for the time being, but will likely be changed after further analysis.

There is another factor disincentivizing large block sizes in Bitcoin: blocks that are large will take longer to propagate, and thus have a higher probability of becoming stales. In Ethereum, highly gas-consuming blocks can also take longer to propagate both because they are physically larger and because they take longer to process the transaction state transitions to validate. This delay disincentive is a significant consideration in Bitcoin, but less so in Ethereum because of the GHOST protocol; hence, relying on regulated block limits provides a more stable baseline.

Computation And Turing-Completeness

An important note is that the Ethereum virtual machine is Turing-complete; this means that EVM code can encode any computation that can be conceivably carried out, including infinite loops. EVM code allows looping in two ways. First, there is a JUMP instruction that allows the program to jump back to a previous spot in the code, and a JUMPI instruction to do conditional jumping, allowing for statements like while x < 27: x = x * 2 . Second, contracts can call other contracts, potentially allowing for looping through recursion. This naturally leads to a problem: can malicious users essentially shut miners and full nodes down by forcing them to enter into an infinite loop? The issue arises because of a problem in computer science known as the halting problem: there is no way to tell, in the general case, whether or not a given program will ever halt.

As described in the state transition section, our solution works by requiring a transaction to set a maximum number of computational steps that it is allowed to take, and if execution takes longer computation is reverted but fees are still paid. Messages work in the same way. To show the motivation behind our solution, consider the following examples:

An attacker creates a contract which runs an infinite loop, and then sends a transaction activating that loop to the miner. The miner will process the transaction, running the infinite loop, and wait for it to run out of gas. Even though the execution runs out of gas and stops halfway through, the transaction is still valid and the miner still claims the fee from the attacker for each computational step.
An attacker creates a very long infinite loop with the intent of forcing the miner to keep computing for such a long time that by the time computation finishes a few more blocks will have come out and it will not be possible for the miner to include the transaction to claim the fee. However, the attacker will be required to submit a value for STARTGAS limiting the number of computational steps that execution can take, so the miner will know ahead of time that the computation will take an excessively large number of steps.
An attacker sees a contract with code of some form like send(A,contract.storage[A]); contract.storage[A] = 0 , and sends a transaction with just enough gas to run the first step but not the second (ie. making a withdrawal but not letting the balance go down). The contract author does not need to worry about protecting against such attacks, because if execution stops halfway through the changes get reverted.
A financial contract works by taking the median of nine proprietary data feeds in order to minimize risk. An attacker takes over one of the data feeds, which is designed to be modifiable via the variable-address-call mechanism described in the section on DAOs, and converts it to run an infinite loop, thereby attempting to force any attempts to claim funds from the financial contract to run out of gas. However, the financial contract can set a gas limit on the message to prevent this problem.

The alternative to Turing-completeness is Turing-incompleteness, where JUMP and JUMPI do not exist and only one copy of each contract is allowed to exist in the call stack at any given time. With this system, the fee system described and the uncertainties around the effectiveness of our solution might not be necessary, as the cost of executing a contract would be bounded above by its size. Additionally, Turing-incompleteness is not even that big a limitation; out of all the contract examples we have conceived internally, so far only one required a loop, and even that loop could be removed by making 26 repetitions of a one-line piece of code. Given the serious implications of Turing-completeness, and the limited benefit, why not simply have a Turing-incomplete language? In reality, however, Turing-incompleteness is far from a neat solution to the problem. To see why, consider the following contracts:

Now, send a transaction to A. Thus, in 51 transactions, we have a contract that takes up 2 50 computational steps. Miners could try to detect such logic bombs ahead of time by maintaining a value alongside each contract specifying the maximum number of computational steps that it can take, and calculating this for contracts calling other contracts recursively, but that would require miners to forbid contracts that create other contracts (since the creation and execution of all 26 contracts above could easily be rolled into a single contract). Another problematic point is that the address field of a message is a variable, so in general it may not even be possible to tell which other contracts a given contract will call ahead of time. Hence, all in all, we have a surprising conclusion: Turing-completeness is surprisingly easy to manage, and the lack of Turing-completeness is equally surprisingly difficult to manage unless the exact same controls are in place - but in that case why not just let the protocol be Turing-complete?

Currency And Issuance

The Ethereum network includes its own built-in currency, ether, which serves the dual purpose of providing a primary liquidity layer to allow for efficient exchange between various types of digital assets and, more importantly, of providing a mechanism for paying transaction fees. For convenience and to avoid future argument (see the current mBTC/uBTC/satoshi debate in Bitcoin), the denominations will be pre-labelled:

10 12 : szabo
10 15 : finney
10 18 : ether

This should be taken as an expanded version of the concept of "dollars" and "cents" or "BTC" and "satoshi". In the near future, we expect "ether" to be used for ordinary transactions, "finney" for microtransactions and "szabo" and "wei" for technical discussions around fees and protocol implementation; the remaining denominations may become useful later and should not be included in clients at this point.

The issuance model will be as follows:

Ether will be released in a currency sale at the price of 1000-2000 ether per BTC, a mechanism intended to fund the Ethereum organization and pay for development that has been used with success by other platforms such as Mastercoin and NXT. Earlier buyers will benefit from larger discounts. The BTC received from the sale will be used entirely to pay salaries and bounties to developers and invested into various for-profit and non-profit projects in the Ethereum and cryptocurrency ecosystem.
0.099x the total amount sold (60102216 ETH) will be allocated to the organization to compensate early contributors and pay ETH-denominated expenses before the genesis block.
0.099x the total amount sold will be maintained as a long-term reserve.
0.26x the total amount sold will be allocated to miners per year forever after that point.

Group	At launch	After 1 year	After 5 years
Currency units	1.198X	1.458X	2.498X
Purchasers	83.5%	68.6%	40.0%
Reserve spent pre-sale	8.26%	6.79%	3.96%
Reserve used post-sale	8.26%	6.79%	3.96%
Miners	0%	17.8%	52.0%

Long-Term Supply Growth Rate (percent)

Despite the linear currency issuance, just like with Bitcoin over time the supply growth rate nevertheless tends to zero.

The two main choices in the above model are (1) the existence and size of an endowment pool, and (2) the existence of a permanently growing linear supply, as opposed to a capped supply as in Bitcoin. The justification of the endowment pool is as follows. If the endowment pool did not exist, and the linear issuance reduced to 0.217x to provide the same inflation rate, then the total quantity of ether would be 16.5% less and so each unit would be 19.8% more valuable. Hence, in the equilibrium 19.8% more ether would be purchased in the sale, so each unit would once again be exactly as valuable as before. The organization would also then have 1.198x as much BTC, which can be considered to be split into two slices: the original BTC, and the additional 0.198x. Hence, this situation is exactly equivalent to the endowment, but with one important difference: the organization holds purely BTC, and so is not incentivized to support the value of the ether unit.

The permanent linear supply growth model reduces the risk of what some see as excessive wealth concentration in Bitcoin, and gives individuals living in present and future eras a fair chance to acquire currency units, while at the same time retaining a strong incentive to obtain and hold ether because the "supply growth rate" as a percentage still tends to zero over time. We also theorize that because coins are always lost over time due to carelessness, death, etc, and coin loss can be modeled as a percentage of the total supply per year, that the total currency supply in circulation will in fact eventually stabilize at a value equal to the annual issuance divided by the loss rate (eg. at a loss rate of 1%, once the supply reaches 26X then 0.26X will be mined and 0.26X lost every year, creating an equilibrium).

Note that in the future, it is likely that Ethereum will switch to a proof-of-stake model for security, reducing the issuance requirement to somewhere between zero and 0.05X per year. In the event that the Ethereum organization loses funding or for any other reason disappears, we leave open a "social contract": anyone has the right to create a future candidate version of Ethereum, with the only condition being that the quantity of ether must be at most equal to 60102216 * (1.198 + 0.26 * n) where n is the number of years after the genesis block. Creators are free to crowd-sell or otherwise assign some or all of the difference between the PoS-driven supply expansion and the maximum allowable supply expansion to pay for development. Candidate upgrades that do not comply with the social contract may justifiably be forked into compliant versions.

Mining Centralization

The Bitcoin mining algorithm works by having miners compute SHA256 on slightly modified versions of the block header millions of times over and over again, until eventually one node comes up with a version whose hash is less than the target (currently around 2 192 ). However, this mining algorithm is vulnerable to two forms of centralization. First, the mining ecosystem has come to be dominated by ASICs (application-specific integrated circuits), computer chips designed for, and therefore thousands of times more efficient at, the specific task of Bitcoin mining. This means that Bitcoin mining is no longer a highly decentralized and egalitarian pursuit, requiring millions of dollars of capital to effectively participate in. Second, most Bitcoin miners do not actually perform block validation locally; instead, they rely on a centralized mining pool to provide the block headers. This problem is arguably worse: as of the time of this writing, the top three mining pools indirectly control roughly 50% of processing power in the Bitcoin network, although this is mitigated by the fact that miners can switch to other mining pools if a pool or coalition attempts a 51% attack.

The current intent at Ethereum is to use a mining algorithm where miners are required to fetch random data from the state, compute some randomly selected transactions from the last N blocks in the blockchain, and return the hash of the result. This has two important benefits. First, Ethereum contracts can include any kind of computation, so an Ethereum ASIC would essentially be an ASIC for general computation - ie. a better CPU. Second, mining requires access to the entire blockchain, forcing miners to store the entire blockchain and at least be capable of verifying every transaction. This removes the need for centralized mining pools; although mining pools can still serve the legitimate role of evening out the randomness of reward distribution, this function can be served equally well by peer-to-peer pools with no central control.

This model is untested, and there may be difficulties along the way in avoiding certain clever optimizations when using contract execution as a mining algorithm. However, one notably interesting feature of this algorithm is that it allows anyone to "poison the well", by introducing a large number of contracts into the blockchain specifically designed to stymie certain ASICs. The economic incentives exist for ASIC manufacturers to use such a trick to attack each other. Thus, the solution that we are developing is ultimately an adaptive economic human solution rather than purely a technical one.

Scalability

One common concern about Ethereum is the issue of scalability. Like Bitcoin, Ethereum suffers from the flaw that every transaction needs to be processed by every node in the network. With Bitcoin, the size of the current blockchain rests at about 15 GB, growing by about 1 MB per hour. If the Bitcoin network were to process Visa's 2000 transactions per second, it would grow by 1 MB per three seconds (1 GB per hour, 8 TB per year). Ethereum is likely to suffer a similar growth pattern, worsened by the fact that there will be many applications on top of the Ethereum blockchain instead of just a currency as is the case with Bitcoin, but ameliorated by the fact that Ethereum full nodes need to store just the state instead of the entire blockchain history.

The problem with such a large blockchain size is centralization risk. If the blockchain size increases to, say, 100 TB, then the likely scenario would be that only a very small number of large businesses would run full nodes, with all regular users using light SPV nodes. In such a situation, there arises the potential concern that the full nodes could band together and all agree to cheat in some profitable fashion (eg. change the block reward, give themselves BTC). Light nodes would have no way of detecting this immediately. Of course, at least one honest full node would likely exist, and after a few hours information about the fraud would trickle out through channels like Reddit, but at that point it would be too late: it would be up to the ordinary users to organize an effort to blacklist the given blocks, a massive and likely infeasible coordination problem on a similar scale as that of pulling off a successful 51% attack. In the case of Bitcoin, this is currently a problem, but there exists a blockchain modification suggested by Peter Todd (opens in a new tab) which will alleviate this issue.

In the near term, Ethereum will use two additional strategies to cope with this problem. First, because of the blockchain-based mining algorithms, at least every miner will be forced to be a full node, creating a lower bound on the number of full nodes. Second and more importantly, however, we will include an intermediate state tree root in the blockchain after processing each transaction. Even if block validation is centralized, as long as one honest verifying node exists, the centralization problem can be circumvented via a verification protocol. If a miner publishes an invalid block, that block must either be badly formatted, or the state S[n] is incorrect. Since S[0] is known to be correct, there must be some first state S[i] that is incorrect where S[i-1] is correct. The verifying node would provide the index i , along with a "proof of invalidity" consisting of the subset of Patricia tree nodes needing to process APPLY(S[i-1],TX[i]) -> S[i] . Nodes would be able to use those nodes to run that part of the computation, and see that the S[i] generated does not match the S[i] provided.

Another, more sophisticated, attack would involve the malicious miners publishing incomplete blocks, so the full information does not even exist to determine whether or not blocks are valid. The solution to this is a challenge-response protocol: verification nodes issue "challenges" in the form of target transaction indices, and upon receiving a node a light node treats the block as untrusted until another node, whether the miner or another verifier, provides a subset of Patricia nodes as a proof of validity.

The Ethereum protocol was originally conceived as an upgraded version of a cryptocurrency, providing advanced features such as on-blockchain escrow, withdrawal limits, financial contracts, gambling markets and the like via a highly generalized programming language. The Ethereum protocol would not "support" any of the applications directly, but the existence of a Turing-complete programming language means that arbitrary contracts can theoretically be created for any transaction type or application. What is more interesting about Ethereum, however, is that the Ethereum protocol moves far beyond just currency. Protocols around decentralized file storage, decentralized computation and decentralized prediction markets, among dozens of other such concepts, have the potential to substantially increase the efficiency of the computational industry, and provide a massive boost to other peer-to-peer protocols by adding for the first time an economic layer. Finally, there is also a substantial array of applications that have nothing to do with money at all.

The concept of an arbitrary state transition function as implemented by the Ethereum protocol provides for a platform with unique potential; rather than being a closed-ended, single-purpose protocol intended for a specific array of applications in data storage, gambling or finance, Ethereum is open-ended by design, and we believe that it is extremely well-suited to serving as a foundational layer for a very large number of both financial and non-financial protocols in the years to come.

Notes and Further Reading

A sophisticated reader may notice that in fact a Bitcoin address is the hash of the elliptic curve public key, and not the public key itself. However, it is in fact perfectly legitimate cryptographic terminology to refer to the pubkey hash as a public key itself. This is because Bitcoin's cryptography can be considered to be a custom digital signature algorithm, where the public key consists of the hash of the ECC pubkey, the signature consists of the ECC pubkey concatenated with the ECC signature, and the verification algorithm involves checking the ECC pubkey in the signature against the ECC pubkey hash provided as a public key and then verifying the ECC signature against the ECC pubkey.
Technically, the median of the 11 previous blocks.
Internally, 2 and "CHARLIE" are both numbers fn3 , with the latter being in big-endian base 256 representation. Numbers can be at least 0 and at most 2 256 -1.

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However, its value lies in its ability to enable us to achieve our goals, not in its mere accumulation. 500 Words Essay on Importance of Money Introduction. Money, often seen as a simple medium of exchange, plays a pivotal role in modern society. Its importance transcends mere transactions, permeating every aspect of our lives - from the ...
Importance of Money Essay
100 Words Essay On Importance Of Money. Money is a critical factor in our lives as it helps us to meet our basic needs and desires. It provides us with a sense of security and helps us to plan for the future. Money enables us to buy food, shelter, and clothing, and to access healthcare and education. Additionally, it provides us with the means ...
Essay On Money: 100, 250 Words Samples
Essay on Money in 100 Words. El dinero or money is used as a medium of exchange, unit of account, and store of value. It facilitates trade, allowing for the smooth exchange of goods and services, while also enabling efficient allocation of resources and encouraging economic growth. As a unit of account, it provides a standardized measure of ...
Essays About Money: Top 5 Examples And 6 Prompts
5 Top Examples On Essay About Money. 1. Essay on Money by Prasanna. "Imagine the world without money. We will eventually come to a point where we will be asking questions like "what's the point of life". Hope and goals are some of the important things that will keep a man going in life.
Essay on Money (3000 words): The Power and Perils of Money
In this essay, we delve into the multifaceted nature of money, exploring its origins, functions, and profound impact on individuals and society. ... Measurement of Value: Money provides a common unit of account, allowing for the standardized measurement of the value of different goods and services. This function enables individuals to compare ...
260 Money Topics to Write About & Essay Examples
Our ideas can be used for discussions and presentations. 🤑 Money essay examples as a bonus! Looking for a topic about money? Find here a 🔝 list of 260 money topics to write about! ... The time value of money refers to the idea that money available at the present time is worth more than the same amount in the future, due to its potential ...
From the Heart to Higher Education: The 2021 College Essays on Money
A young man reflects on his own thrift, while a young woman accepts a gift of ice cream and pays a price for it. Finally, caregiving becomes a source of pride for someone young enough to need ...
Essay on Money
February 13, 2024 by Prasanna. Essay on Money: The concept of money was invented somewhere in 5000 B.C by a few traders in Western Europe. Ever since the invention, different countries have adopted it and started printing their own money with specific values, which was usually backed by gold. But before money was invented, trading used to ...
Essay on Money
500+ Words Essay on Money. Money is any object or record that is generally accepted as payment for goods and services and repayment of debts which also acts as a standard of deferred payments. The main functions of money are distinguished as: a medium of exchange, a unit of account and a store of value. The money supply of a country consists of ...
Importance and Benefits of Money Essay in English
June 1, 2023 by Laxmi. Money Essay: Money is a vital wellspring of everyday routine to experience a solid and satisfying life, despite the fact that it can not measure up to adore and mind. Both have their own significance and benefit. We are giving articles on Money to partake in a paper composing contest in basic and basic words here.
PDF THE TIME VALUE OF MONEY
First, the standard present value of annuity is received. Second, that present second annuity, the present value of $ 300 $1,137 million; this present value 1 It is is discounted really back 5 more years to arrive at today's present Present Value = $ 758 million+$706 million+$948.
The Value Of Money In Our Life Essay
The Value Of Money In Our Life Essay. 761 Words4 Pages. Money is the most important thing of material value in our lives, and as such, it became an integral part of our lives as well. It is a proven fact that money can buy you happiness, according the recent scientific studies. As a matter of fact, the more the person earns, the more satisfied ...
Time Value of Money
Introduction. According to Kuhlemeyer (2004), time value of money means that money at hand today is worth more than the same amount at a future date. It is the amount by which money will grow to in the future. In simpler terms, it is the net increase or decrease in the amount of money. He affirms that the concept helps to determine the amount ...
Understanding the Time Value of Money
The time value of money is a financial principle that states the value of a dollar today is worth more than the value of a dollar in the future. This philosophy holds true because money today can ...
Time Value of Money Explained with Formula and Examples
Time Value of Money - TVM: The time value of money (TVM) is the idea that money available at the present time is worth more than the same amount in the future due to its potential earning capacity ...
The time value of money: [Essay Example], 1248 words
The TVM theory primarily posits that the value of money in hand today is worth much more than the value of the similar amount in the future (Scott & Moore, 2015). This is because money received today can be invested to generate earning, i.e., interest, as opposed to delaying such amount into the future (Scott & Moore, 2015).
Time Value of Money: What You Should Know Essay
There are five main components of the time value of money: rates, periods, present value, future value, and payments. Schmidt (2021) notes that by knowing any 4 of the five components, one can easily find the fifth one. Based on this, the author highlights the practical problems of the time value of money. According to Schmidt (2021), there are ...
The Value Of Money English Literature Essay
The Value Of Money English Literature Essay. Probably, most people have lived situations which money played a fundamental role. Maybe an illness like cancer is an evident reason to need money. Also, there are basic needs of daily life, such as food, house, studies, locomotion, clothes, etc. Those needs require spending money to cover them to ...
Essay on Money in English for Children and Students
Money Essay 4 (250 words) Money is very much required thing in the life however; it cannot buy things like time, love and true care. It can only fulfil the outer needs of the person and not the inner needs like true love. Now-a-days, everything has become so costly but necessary to buy for living a simple life.
Long and Short Essay on Money in English
Money Essay. Money is the medium used by people to buy required goods and services. It is used as the source to fulfill basic needs and is also a source of comfort in life. Money is the most important source to live a healthy and prosperous life; however, it cannot be compared with the significance of love and care.
Americans Are Losing Faith in the Value of College. Whose Fault Is That
When it comes to higher education worldwide, the United States is an outlier in more ways than one.In Canada and Japan, public-university tuition is now about $5,000 a year. In Italy, Spain and ...
The Best Toilet Paper of 2024, Tested by Experts
With more than double the sheets per roll than other toilet papers we've tested, this TP from Scott is ideal for someone looking to shop in bulk. There are 36 rolls in each pack with 1,100 sheets ...
Time Value of Money: Importance of Calculating Essay
Time value of money (TVM) is a monetary approximation, which gives worth to money at hand more value than future expectations of financial gains. It helps in weighing investment ventures, hence providing solutions to financial problems primarily resulting from mortgages, allowances, and savings. Finances held presently by an organization are ...
How to To Make Money Online: 35 Reliable Ways (2024)
With many companies hiring part time, it's easier than ever to make extra money without working a full week. 28. Become a TikTok consultant. One of the trendiest ways to make money online is to become a TikTok consultant. Brands will contact you for brainstorming video ideas, developing engaging bios, and more.
Microsoft Azure Blog
Get the latest Azure news, updates, and announcements from the Azure blog. From product updates to hot topics, hear from the Azure experts.
The state of AI in early 2024: Gen AI adoption spikes and starts to
If 2023 was the year the world discovered generative AI (gen AI), 2024 is the year organizations truly began using—and deriving business value from—this new technology.In the latest McKinsey Global Survey on AI, 65 percent of respondents report that their organizations are regularly using gen AI, nearly double the percentage from our previous survey just ten months ago.
Ethereum Whitepaper
Value-blindness - there is no way for a UTXO script to provide fine-grained control over the amount that can be withdrawn. For example, one powerful use case of an oracle contract would be a hedging contract, where A and B put in $1000 worth of BTC and after 30 days the script sends $1000 worth of BTC to A and the rest to B. ... If a contract ...

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