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WSC 2018: Social Studies – Black Market

Introducing Markets

ESSENT IAL QUEST IONS
DO ALL MARKETS FUNCT ION THE SAME WAY AROUND THE WORLD?
A market is one of the many varieties of systems, institutions, procedures, social
relations and infrastructures whereby parties engage in exchange. While parties may exchange goods and
services by barter, most markets rely on sellers offering their goods or services (including labor) in
exchange for money from buyers. It can be said that a market is the process by which the prices of goods
and services are established. Markets facilitate trade and enables the distribution and allocation of
resources in a society. Markets allow any trade-able item to be evaluated and priced. A market
sometimes emerges more or less spontaneously but is often constructed deliberately by human interaction
in order to enable the exploitative exchange of rights (cf. ownership) of services and goods.

In economics, a market that runs under laissez-faire policies is called a free market, it is “free” from the
government, in the sense that the government makes no attempt to intervene
through taxes, subsidies, minimum wages, price ceilings, etc. This is not always the case, as
Governments may interfere in countries where they wish to dictate matters in the country. Also in the
case of an oligopoly or monopoly imperfect competition may result.

What (or who) determines the prices of goods and services?

In economics, a free market is an idealized system in which the prices for goods and services are
determined by the open market and consumers, in which the laws and forces of supply and demand are
free from any intervention by a government, price-setting monopoly, or other authority. Proponents of the
concept of free market contrast it with a regulated market, in which a government intervenes in supply
and demand through various methods such as tariffs used to restrict trade and protect the economy. In an
idealized free market economy, prices for goods and services are set freely by the forces of supply and
demand and are allowed to reach their point of equilibrium without intervention by government policy.

What is money – and where do the different types of money derive their value?

Money is any item or verifiable record that is generally accepted as payment for goods and services and
repayment of debts in a particular country or socio-economic context.[1][2][3] The main functions of
money are distinguished as: a medium of exchange; a unit of account; a store of value; and, sometimes,
a standard of deferred payment.[4][5] Any item or verifiable record that fulfills these functions can be
considered as money.

Money is historically an emergent market phenomenon establishing a commodity money, but nearly all
contemporary money systems are based on fiat money.[4] Fiat money, like any check or note of debt, is
without use value as a physical commodity. It derives its value by being declared by a government to
be legal tender; that is, it must be accepted as a form of payment within the boundaries of the country, for
“all debts, public and private”.[6]

The money supply of a country consists of currency (banknotes and coins) and, depending on the
particular definition used, one or more types of bank money (the balances held in checking
accounts, savings accounts, and other types of bank accounts). Bank money, which consists only of
records (mostly computerized in modern banking), forms by far the largest part of broad money in
developed countries

To what degree can governments control prices or quantities of goods and services exchanged?

Governments intervene in markets to address inefficiency. In an optimally efficient market, resources are
perfectly allocated to those that need them in the amounts they need. In inefficient markets that is not the
case; some may have too much of a resource while others do not have enough. Inefficiency can take many
different forms. The government tries to combat these inequities through regulation, taxation, and
subsidies. Most governments have any combination of four different objectives when they intervene in
the market.

MAX IMIZING SOCIA L WELFARE
In an unregulated inefficient market, cartels and other types of organizations can wield monopolistic
power, raising entry costs and limiting the development of infrastructure. Without regulation, businesses
can produce negative externalities without consequence. This all leads to diminished resources, stifled
innovation, and minimized trade and its corresponding benefits. Government intervention through
regulation can directly address these issues.

Another example of intervention to promote social welfare involves public goods. Certain depletable
goods, like public parks, aren’t owned by an individual. This means that no price is assigned to the use of
that good and everyone can use it. As a result, it is very easy for these assets to be depleted. Governments
intervene to ensure those resources are not depleted.

MACRO-ECONOMIC FACTORS
Governments also intervene to minimize the damage caused by naturally occurring economic events.
Recessions and inflation are part of the natural business cycle but can have a devastating effect on
citizens. In these cases, governments intervene through subsidies and manipulation of the money supply
to minimize the harsh impact of economic forces o

OTHER OBJECT IVES
Governments can sometimes intervene in markets to promote other goals, such as national unity and
advancement. Most people agree that governments should provide a military for the protection of its
citizens, and this can be seen as a type of intervention. Growing a large and impressive military not only
increases a country’s security, but may also be a source of pride. Intervening in a way that promotes
national unity and pride can be an extremely valuable goal for government officials.

SOCIO -ECONOMIC FACTORS
Governments may also intervene in markets to promote general economic fairness. Government often try,
through taxation and welfare programs, to reallocate financial resources from the wealthy to those that are
most in need. Other examples of market intervention for socio-economic reasons include employment

laws to protect certain segments of the population and the regulation of the manufacture of certain
products to ensure the health and well-being of consumers.

KEY TERMS TO LEARN
Supply – In economics, supply is the amount of something that firms, consumers, labourers, providers
of financial assets, or other economic agents are willing to provide to the marketplace. In the goods
market, supply is the amount of a product per unit of time that producers are willing to sell at various
given prices when all other factors are held constant. In the labor market, the supply of labor is the
amount of time per week, month, or year that individuals are willing to spend working, as a function of
the wage rate. In the financial markets, the money supply is the amount of highly liquid assets available in
the money market, which is either determined or influenced by a country’s monetary authority.

Demand – In economics, demand is the quantity of a commodity or a service that people are willing or
able to buy at a certain price, per unit of time.

Deadweight loss – is a loss of economic efficiency that can occur when equilibrium for a good or a
service is not achieved. That can be caused by monopoly pricing in the case of artificial scarcity,
an externality, a tax or subsidy, or a binding price ceiling or price floor such as a minimum wage. For
example, if the price of a glass of wine is $3.00 and the price of a glass of beer is $3.00, a consumer might
prefer to drink wine. If the government decides to levy a wine tax of $3.00 per glass, the consumer might
prefer to drink beer. The excess burden of taxation is the loss of utility to the consumer for drinking beer
instead of wine since everything else remains unchanged.

Regulation – Means putting rules in place and can take many forms: legal restrictions promulgated by
a government authority, contractual obligations (for example, contracts between insurers and their
insureds[1]), social regulation (e.g. norms), co-regulation, third-party regulation, certification,
accreditation or market regulation.[2] . State-mandated regulation is government intervention in the
private market in an attempt to implement policy and produce outcomes which might not otherwise
occur,[3] ranging from consumer protection to faster growth or technological advancement.

Perfect competition – In theoretical models where conditions of perfect competition hold, it has been
theoretically demonstrated that a market will reach an equilibrium in which the quantity supplied for
every product or service, including labor, equals the quantity demanded at the current price. This
equilibrium will be a Pareto optimum, meaning that nobody can be made better off by exchange without
making someone else worse off.

Imperfect competition – is a type of market structure showing some but not all features of competitive
markets.[1] . Forms of imperfect competition include:

▪ Oligopoly, competition among 10
▪ Monopolistic competition, in which there are many sellers producing highly differentiated products.
▪ Monopoly, where there are many buyers but only one seller.
▪ Monopsony, where there are many sellers but one buyer.
▪ Oligopsony, where there are many sellers but few buyers.

in the Balkans. Embargoes are generally considered legal barriers to trade.[1] A failure to pay. or a very low tax rate for a certain area of taxation. competition among 2 Monopoly – exists when a specific person or enterprise is the only supplier of a particular commodity. A specific tariff is levied as a fixed fee based on the type of item. is punishable by law.investopedia. in simple terms. Tariffs – A tariff is a tax imposed on imported goods and services. and the possibility of a high monopoly price well above the seller’s marginal cost that leads to a high monopoly profit. a lack of viable substitute goods. the .[1][2] The term souq goes by many alternative in different parts of the world. in Malta. Read more: Tariff https://www. Taxes – is a mandatory financial charge or some other type of levy imposed upon a taxpayer (an individual or other legal entity) by a governmental organization in order to fund various public expenditures.000 on any car. or evasion of or resistance to taxation.[1] Economic sanctions may include various forms of trade barriers.[6] Embargoes are considered strong diplomatic measures imposed in an effort. ariffs are used to restrict imports by increasing the price of goods and services purchased from overseas and making them less attractive to consumers. thought experiment) transaction that involves no negative cash flow at any probabilistic or temporal state and a positive cash flow in at least one state. an arbitrage is a (imagined. Arbitrage – is the practice of taking advantage of a price difference between two or more markets: striking a combination of matching deals that capitalize upon the imbalance. an arbitrage is present when there is the opportunity to instantaneously buy low and sell high. to elicit a given national-interest result from the country on which it is imposed. Taxes consist of direct or indirect taxes and may be paid in money or as its labour equivalent.com/terms/t/tariff. For instance. which are often considered to be acts of war Sanctions – are commercial and financial penalties applied by one or more countries against a targeted country. $1. for example. not to be confused with blockades. for example. group. hypothetical. Bazaar – is a permanently enclosed marketplace or street where goods and services are exchanged or sold. tariffs. An ad-valorem tariff is levied based on the item’s value. by the imposing country. some on a scale based on annual income amounts. the profit being the difference between the market prices. Most countries have a tax system in place to pay for public/common/agreed national needs and government functions: some levy a flat percentage rate of taxation on personal annual income. Monopolies are thus characterized by a lack of economic competition to produce the good or service. and some countries impose almost no taxation at all. Souk – is a marketplace or commercial quarter in Western Asian and North African cities. it is the possibility of a risk-free profit after transaction costs.asp#ixzz54igAgcDR
 Embargoes – is the partial or complete prohibition of commerce and trade with a particular country or a group of countries. and restrictions on financial transactions. 10% of the car’s value. or individual.▪ Duopoly. When used by academics.

most of the goods on sale are used personal possessions. plants from local farms and vintage clothes. They are popular in the United Kingdom. which represent ownership claims on businesses. cheap items. as in a warehouse or school gymnasium. that is. quotas and other trade restrictions on items traded between the signatories. . These types of contracts fall into the category of derivatives. not a physical facility or discrete entity) of stocks (also called shares). or indeed browsing for items to buy. Many markets offer fresh produce or baked goods. The equivalent Persian term is “bazaar“. Renters of the flea market tables are called vendors. these may include securities listed on a public stock exchange as well as those only traded privately. is an organized market where (especially) tradable securities. a contract to buy specific quantities of a commodity or financial instrument at a specified price with delivery set at a specified time in the future. and options contracts are sold and bought. Swap meets – A flea market (or swap meet) is a type of bazaar that rents or provides space to people who want to sell or barter merchandise. or outdoors. where they are often referred to simply as ‘car boots’. futures. Car boot sales are a way of attracting a large group of people in one place to recycle useful but unwanted domestic items that otherwise might have been thrown away. foreign exchange. Used goods. Stock exchanges list shares of common equity as well as other security types. and in northern Morocco. collectibles. commodities. Although a small proportion of sellers are professional traders selling goods. It may be indoors. In general a souq is synonymous with a bazaar or marketplace. and antiques are commonly sold. as in a field or parking lot or under a tent. Futures market – is a central financial exchange where people can trade standardized futures contracts. The most common trade agreements are of the preferential and free trade types are concluded in order to reduce (or eliminate) tariffs. Boot sales – are a form of market in which private individuals come together to sell household and garden goods.g. the terms suq and sometimes monti are used for a marketplace. the Spanish corruption socco is often used. tariff and trade treaty that often includes investment guarantees.term bedesten is used. Car boot sales are becoming prevalent across many cities and towns and have evolved from shady operations selling mass produced products to anyone and everyone attempting to sell any surplus household items. Exchange – or bourse /bʊərs/ also known as a trading exchange or trading venue. and the term souq is used in Arabic speaking countries. e. corporate bonds and convertible bonds. Trade agreement – is a wide ranging tax. Stock market – is the aggregation of buyers and sellers (a loose network of economic transactions. The term refers to the selling of items from a car’s boot. Examples of the latter include shares of private companies which are sold to investors through equity crowdfunding platforms.

Each party to a contract must have capacity to enter the agreement. Britain and American – Contracts tend to me formal. Most latin American countries will sign the contract just to avoid argument. . It is just the starting point to the business relationship and can be modified at will according to the circumstances. a contract does not mean the deal is settled at all.” It unlikely that a contract will ever be achieved. intoxicated persons. A complex global network of goods and services are spread all around the world. ▪ South American countries – “Contract is an ideal. What also becomes important are global contracts. and subsidies. Do your homework before entering a new market or setting up for an international assignment. Contract law concerns the rights and duties that arise from agreements. the rules must be adhered to. Some types of contracts may require formalities. and a mutual intent to be bound. tariffs. Contract is a branch of the law of obligations in jurisdictions of the civil law tradition. sacred and once signed. Scandinavian countries. which is reflective of their flexible business culture. Minors.[1] A contract arises when the parties agree that there is an agreement. privileges. How do contracts vary between countries? Global business is happening everywhere as we speak. It becomes extremely important for an international manager or expats to understand not only how contracts vary across the global but also what the term “contract” means to each country or culture. consideration. Below are a few examples of some countries and how they perceive business contracts. Optimal functionality – Who knows? Please tell me in the comments section! Contracts: Formalizing Exchanges Essential Questions Where do contracts derive their authority? A contract is a voluntary arrangement between two or more parties that is enforceable by law as a binding legal agreement. Formation of a contract generally requires an offer.Laissez-faire – s an economic system in which transactions between private parties are free from government intervention such as regulation. ▪ America – Americans see contracts as a cultural norm. Global contracts vary across the world depending on the culture and country you are conducting business with. such as a memorialization in writing. ▪ Japanese – For the Japanese. ▪ Swiss. acceptance. Global trade becomes important for any business or entrepreneur to understand. and those under a mental affliction may have insufficient capacity to enter a contract.

the acknowledgment of the drawee that binds the drawee to the terms of a draft.[1] Rights are of essential importance in such disciplines as law and ethics. organizations. Ha. social. convention. This classical approach to contract formation has been weakened by developments in the law of estoppel. The offer and acceptance formula. or ethical theory. especially theories of justice and deontology. sub-national entities. ▪ Italy – A signed contract in Italy is negotiable. social convention. A pact. according to some legal system. They do not exist to enforce the underlying agreements. misrepresentation and unjust enrichment. corporations Rights – are legal. interesting! Are offers on the market contractual obligations? ??? I think this was answered above. mutual agreement) a common understanding in the formation of a contract.a. part of the law of tort which focuses on civil wrongs . identifies a moment of formation when the parties are of one mind. Chinese contracts are usually not as detailed as those in Japan or in the U. It is the present contractual intent to be bound by a contract with definite and certain terms communicated to the offeree. or treaty between nations. Liabilities – ▪ Public liability. Agreement – an contract enforceable by law: Meeting of the minds (a. misleading conduct. Acceptance – A promise or act on the part of an offeree indicating a willingness to be bound by the terms and conditions contained in an offer. the “offeree”. or ethical principles of freedom or entitlement. Also. Yes is the answer? KEY TERMS TO RESEARCH (EXAMPLES) Formation – Offer and acceptance analysis is a traditional approach in contract law. Contracts serve for clarification purposes. While all relevant information should be included. Offer – Treitel defines an offer as “an expression of willingness to contract on certain terms. developed in the 19th century.▪ Chinese – Chinese practices are similar to the Japenese.S. made with the intention that it shall become binding as soon as it is accepted by the person to whom it is addressed”. that is. rights are the fundamental normative rules about what is allowed of people or owed to people. Italians can bend the rules which are set around some laws and regulations.k. Court supplies “arrangements to made” for those who have the means.[1] An offer is a statement of the terms on which the offeror is willing to be bound.

Breach of contract. making gifts. In its traditional form. or in case of a will. Consideration can be anything of value (such as an item or service). which each party to a legally binding contract must agree to exchange if the contract is to be valid. which then induces that other party into the contract.[1] Estoppel – is a collective name given to a group of legal doctrines in common law legal systems whereby a person is prevented from making assertions that are contradictory to his or her prior position on certain matters before the court—the person is said to be “estopped”. and others who make products available to the public are held responsible for the injuries those products cause. distributors. Consideration – is one of the four main building blocks of a contract. or communicates an intent to fail the obligation or otherwise appears not to be able to perform his or her obligation under the contract. Implied terms are not stated but nevertheless form a provision of the contract. rescind or modify the principal obligation. If only one party offers consideration. revoke. or other pressure against the person . suppliers. Terms (implied vs. they must have given something for it (quid pro quo): something must be given or promised in exchange or return for the promise. such as getting married or merging. entering into contracts. to suspend. Capacity – of natural and juridical persons (legal persons) in general. a situation in which a binding agreement is not honored by one or more of the parties to the contract. It is the first element that must be established to proceed with an action in negligence. or writing a valid will. The claimant must be able to show a duty of care imposed by law which the defendant has breached. breaching a duty may subject an individual to liability.▪ Product liability is the area of law in which manufacturers. Breach – . Misrepresentation – a false or misleading statement of fact made by one party to another. expressed as the requirement that in order for parties to be able to enforce a promise. a condition is a clause in a contract or agreement which has for its object to suspend. In turn. duties and obligations. the agreement is not legally a binding contract. determines whether they may make binding amendments to their rights. express) – An express term is stated by the parties during negotiation or written in a contractual document. retailers. or modify the devise or bequest. In many cases it is by itself an agreement. Duress – refers to a situation whereby a person performs an act as a result of violence. Condition – In its most extended meaning. Duty of care – is a legal obligation which is imposed on an individual requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others. threat.

). Various cryptocurrencies have implemented types of smart contracts. crime. Phrases with similar meanings include: “give and take”. where the contract is a written document. and I’ll scratch yours”. but only suspend it for the duration of the force majeure. strike. most force majeure clauses do not excuse a party’s non- performance entirely. or an event described by the legal term act of God (hurricane. Force majeure – is a common clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties. Proponents of smart contracts claim that many kinds of contractual clauses may be made partially or fully self-executing. In practice. Quid pro quo – is a phrase used in English to mean an exchange of goods or services. self-enforcing. but may also apply to sales of other goods. or other physical evidence. earthquake. etc. The phrase caveat emptor and its use as a disclaimer of warranties arise from the fact that buyers typically have less information about the good or service they are purchasing. Written contract – Some types of contracts may require formalities. These transactions are trackable and irreversible. Smart contracts allow the performance of credible transactions without third parties. or enforce the negotiation or performance of a contract. A collateral contract may be between one of the parties and a third party.Collateral – is usually a single term contract. The aim of smart contracts is to provide security that is superior to traditional contract law and to reduce other transaction costs associated with contracting.[1] Smart contracts were first proposed by Nick Szabo in 1994. a collateral contract is formed when one party pays the other party a certain sum for entry into another contract. flood. such as a war. This is in contrast to a written contract. Oral contract – a contract. while the seller has more information. “tit for tat“. such as a memorialization in writing.[1] The collateral contract co-exists side by side with the main contract. volcanic eruption. riot. usually when the propriety or equity of the transaction is in question. Adhesion – is a contract between two parties. Smart contracts – is a computer protocol intended to digitally facilitate. verify. made in consideration of the party for whose benefit the contract operates agreeing to enter into the principal or main contract. “a favour for a favour”. For example. It indicates that an item or a service has been traded in return for something of value. where the terms and conditions of the contract are set by one of the parties. There may be written. and the other party has little or no ability to negotiate more favorable terms and is thus . Caveat emptor – “Let the buyer beware” is the contract law principle that controls the sale of real property after the date of closing. or both. the terms of which have been agreed by spoken communication. of an oral contract – for example where the parties write down what they have agreed – but the contract itself is not a written one. which sets out additional terms relating to the same subject matter as the main contract. prevents one or both parties from fulfilling their obligations under the contract. in which one transfer is contingent upon the other. and “you scratch my back.

enforces a right. Sanctity of contract – is the concept that U.S. legal regulation is in fact the norm. The main kinds of formality that a statute can require are to put the transaction in writing. far from being ‘radical’. and on which terms to contract. The freedom to contract is the underpinning of laissez-faire economics and is a cornerstone of free-market libertarianism. Through freedom of contract. Reasonableness – is a hypothetical person of legal fiction who is ultimately an anthropomorphic representation of the body care standards crafted by the courts and communicated through case law and jury instructions. agricultural products already contracted to be exported should not be subject to government cancellation because of short supply. national security. Legal regulation – Responsible governments already legally regulate many risky activities and other drugs effectively. In a limited number of cases. or foreign policy reasons. While these types of contracts are not illegal per se.L.[2] The area of tort law known as negligence involves harm caused by failing to act as a form of carelessness possibly with extenuating circumstances. individuals possess a general freedom to choose with whom to contract. Freedom of contract – is the freedom of private or public individuals and groups (of any legal entity) to form contracts without government restrictions. usually in the exercise of civil law jurisdiction.placed in a “take it or leave it” position. agreements and trusts will be unenforceable unless they meet a certain form prescribed by statute. Formalities – are required in some kinds of transaction by English contract law and trusts law. including alcohol. rather than being allowed to control itself. Statutory regulation – When a financial market or industry is controlled by a government organization. Negligence – is a failure to exercise the appropriate and or ethical ruled care expected to be exercised amongst specified circumstances. 101-624) provides for contract sanctity by prohibiting the President from restricting the export of any agricultural commodity already under contract to be delivered within 270 days from the date an embargo is imposed. In reality. whether to contract or not. there exists a very real possibility for unconscionability. This is opposed to government restrictions such as minimum wage. or to register it at a government registrar (such as HM Land Registry or Companies House). to make a deed. The core concept of negligence is that people should exercise reasonable care in their actions. Remedies – is the means with which a court of law. . or price fixing. competition law. or makes another court order to impose its will. imposes a penalty. such as the Securities and Exchange Commission in the US. except during national emergency or war. by taking account of the potential harm that they might foreseeably cause to other people or property. tobacco and pharmaceuticals. The 1990 farm bill (P. it is prohibition that is the radical policy. So.

What distinguishes a black market from other kinds of markets—do they function differently? Parties engaging in the production or distribution of prohibited goods and services are members of the illegal economy. Are black markets better suited for the offline or online worlds? A great online video explains Black markets For me there is an obvious advantage to it being suited to the online (dark web) world. What kinds of goods and services are traded on black markets? Examples include the drug trade. the government also should relax regulations on illegal activities so black markets can disappear without using money or other enforcements including military power. Black Markets A great article on the mechanics of the black market from investopedia. prostitution (where prohibited). as in a grey market. non-compliance with the rule constitutes a black market trade since the transaction itself is illegal. Unlike the formal economy. activities of the informal economy are not included in the gross national product (GNP) and gross domestic product (GDP) of a country. Violations of the tax code involving income tax evasion constitutes membership in the unreported economy Is there a difference between a black market and an informal market? An informal market is the part of an economy that is neither taxed. the better it is for the buyer and seller. The difference is that the black market is illegal: the grey is unofficial or unauthorised. simply because the goods are generally illegal and so the less easy the goods are to trace. or shadow economy is a clandestine market or transaction that has some aspect of illegality or is characterized by some form of noncompliant behaviour with an institutional set of rules. nor monitored by any form of government. In addition. Do governments benefit more from eliminating black markets or from regulating them? Hojoon Kim believes there are ways of getting rid of the black market “I believe that the most effective methods would be a prohibition of using paper money so the governments can trace the outflow and inflow of exact amount of money. . If illegal goods are traded in the offline (real) world. the chance of being caught by the authorities is higher. illegal currency transactions and human trafficking.n your browser. If the rule defines the set of goods and services whose production and distribution is prohibited by law.</div></div> ESSENT IAL QUEST IONS What makes black markets necessary? underground economy.[3] The informal sector can be described as a grey market in labour.

S. crypto anarchists and libertarians who saw potential opportunities emerge with the new cryptocurrency. items sold at a car boot sale).When we consider a key distinction between paper money and electronic money or credit cards. government cannot prohibit freedom of action in respect one’s own body. and thus taxes from that economy being used by the government. Its use in crime was therefore inevitable.” Is the new popularity of cryptocurrencies in part of a function of their usefulness on the black market? Conor Patterson writes about the origins of Britcoin linking it to the black market: “This created two distinct demographics of people who were originally interested in the cryptocurrency. consumers in possession of stolen goods will have them taken away if they are traced. A classic example of new regulation creating a black market is the Prohibition of alcohol. This is because they heavily rely on untraceability and anonymity of money. or privacy advocates. If the U. are they legally enforceable. In some jurisdictions (such as England and Wales). so does the black market.” Does the term ‘black market’ refer to a specific marketplace in any given country. See Wikipedia – Black market for a wide range of examples. it is easy to understand why most crime organizations or crime syndicates use paper money for their transactions. they are still left with no goods and no money back. . it is nearly impossible to prohibit the use of paper money since negative side effects will come along but it worth a try considering the volume of illegal drug market. This risk may make some averse to buying goods that they think may be from the underground market. even if they did not know they were stolen. and who should be responsible for enforcing them? All trades are illegal and so there is no recourse to the law. which is approximately $360 billion. or can there be many black markets even in the same place? – There are black markets in a wide range of goods & services both within a country. which is why of the arguments for marijuana legalization is the elimination of the black market. an entire sub culture sought to free themselves from government regulations and control. It is evident that we can collect a huge amount of tax when we consider the amount of marihuana or other illegal drugs that are being traded everyday. and between countries. even if in fact they are legitimate (for example. Similarly when the law disappears. It is undeniable fact that black markets will not disappear as long as what people want to buy or sell are prohibited by governments. Are there contracts in the black market? If so. I would recommend the government to legalize the use of drugs so they can get tax from it. If the world only uses electronic money. it would be so much easier to track illegal transactions. With this freedom. The liberating aspect of Bitcoin necessitated the latter to put their trust in Bitcoin as a possible currency. Another method would be alleviating regulation on illegal markets. as there was no alternative that could provide fractions of the privacy and pseudonymity offered by Bitcoin. Of course. Anyone who grasped onto Bitcoin in its early years were either crypto enthusiasts interested in the technical aspect of Bitcoin. Though they themselves commit no offense.

Does anyone regulate black markets? – The market itself.Crash Course <div class="player-unavailable"><h1 class="message">An error occurred.youtube. If the rule defines the set of goods and services whose production and distribution is prohibited by law. or enable JavaScript if it is disabled in your browser.youtube. KEY TERMS TO LEARN (EX AMPLES) Underground economy – is a clandestine market or transaction that has some aspect of illegality or is characterized by some form of noncompliant behavior with an institutional set of rules. non-compliance with the rule constitutes a black market trade since the transaction itself is illegal. Parties engaging in the production or distribution of prohibited goods and services are members of the illegal economy. Are there any countries in which black markets are formally endorsed by the authorities? In some goods and services – yes.youtube.com/watch?v=SLMpyqUM6P4" target="_blank">Try watching this video on www.</h1><div class="submessage"><a href="http://www. Shadow economy – A short explanation Dangers Of Shadow Economy .</h1><div class="submessage"><a href="http://www. easy to follow clip Lessons from the informal economy | Diana Enriquez | TEDxMünchen <div class="player-unavailable"><h1 class="message">An error occurred. Prostitution is illegal or highly regulated in many countries across the world. so it is self regulating! The classic supply and demand but with no consumer rights.com</a>.</div></div> Informal economy – Ten minute.com/watch?v=k7oOjMeanaM" target="_blank">Try .

social security. such as wars of aggression.watching this video on www. or intended market for goods and services.[2] It is a part of what has been called the underground economy. It is hidden from the state for tax. working under the table. or (in UK English) moonlighting. official. while legal. or the non-observed economy. and the employer often does not check the employee’s background or credentials. and technology equipment very often sell those products through distributors.[1] is employment that is not reported to the government. has been criticized as being inefficient due to government regulation. as is sometimes required by law or otherwise expected by the industry’s client base. telecom. unreported employment evades withholding tax and is part of the informal sector. In fact. Grey market products are products sold by a manufacturer or their authorized agent outside the terms of the agreement between the reseller and the manufacturer. unauthorized. authorized. provided that the equipment was originally sold by the manufacturer inside the EU.” An import cycle refers to the events that lead up to the .[1] Import cycle – a cycle is “a completed series of events that follows or is followed by another series of similar events occurring in the same sequence. Most distribution agreements require the distributor to resell the products strictly to end users. but immoral activities. It is also sometimes distinguished from the pink market of state-sanctioned. off the books. it is often done when the employer or the employee intentionally fails to obey one or more laws. There is nothing illegal about buying “grey market” products. White market – is the legal. are unofficial.com</a>. It is distinct from the black market of illegally trafficked goods and the grey market. or cash-in- hand. such as adoption of children. The white market in some goods. such as a license or professional certification. The EU Supreme Court has similarly ruled that grey market products are legal for resale in the EU. or unintended by the original manufacturer. Payments are generally in cash. or enable JavaScript if it is disabled in your browser. or labor law purposes but is legal in all other aspects.</div></div> Unreported economy – Unreported employment. in which commodities are distributed through channels which. Manufacturers that produce products including computer. However. In developed nations.youtube. While the hiring of the employee may or may not be legal in itself. some distributors choose to resell those products to other resellers. The employer or the employee often does so for tax evasion or to avoid or violate other laws. In the late 1980s manufacturers labeled the resold products as “grey market”. and the red market of immoral activities banned by the state. the US Supreme Court has upheld the idea that grey market products are legal for resale in the United States regardless of where they were produced or originally sold. Black market – see Underground economy (above) Grey market – is the trade of a commodity through distribution channels that are legal but unintended by the original manufacturer.

Compounding crime – Compounding a felony was an offence under the common law of England and was classified as a misdemeanour. as long as there is no agreement not to prosecute. After money has been suitably laundered or “cleaned”. Black money – is income earned surreptitiously or illegally. or to hamper the prosecution of. information or people. electronics (both parts and finished products). handbags. or across an international border.” The fluidity indicates how quickly goods or services can be supplied. substances. toys. means to come to a settlement or agreement. software. illegal weapons trade.[1] Smuggling – is the illegal transportation of objects. Accordingly. Fluid supply – Supply is “the willingness and ability to offer goods and services for sale” or “the amount of a commodity that producers are willing and able to offer for sale at a specified price. such as acquisitions of properties.[1][2] The dilemma of illicit activities is that it is often a problem spending the proceeds of such activities without raising the suspicion of law enforcement agencies. It consisted of a prosecutor or victim of an offence accepting anything of value under an agreement not to prosecute.[1] To “compound”. aviation and automobile parts. exotic wildlife trade. into a prison. There are various motivations to smuggle. pharmaceuticals. as well as the imitations of items such as clothing. tax evasion. and movies. Law enforcement agencies of many . usually in cash. in violation of applicable laws or other regulations. Examples of non-financial motivations include bringing banned items past a security checkpoint (such as airline security) or the removal of classified documents from a government or corporate office. or to make restitution. and not reported to the government so as to avoid paying taxes on it.[2] It is not compounding for the victim to accept an offer to return stolen property. or otherwise spent. illegal immigration or illegal emigration. It can be very complex as the the linked Global Trade Import Cycle shows. shoes. such as in the drug trade. The word counterfeit frequently describes both the forgeries of currency and documents. watches. Counterfeit products are often produced with the intent to take advantage of the superior value of the imitated product. Money laundering – is the process of transforming the profits of crime and corruption into ostensibly “legitimate” assets. it can be used in the mainstream economy for accumulation of wealth. or the theft of the items being smuggled. Commission-free – are motif or single stock trades that carry no commission fees when executed. works of art. Such strategies are generally called money laundering. considerable time and effort is put into devising strategies which enable the safe use of those proceeds without raising unwanted suspicion. Counterfeiting – To counterfeit means to imitate something. such as out of a house or buildings. These include the participation in illegal trade. high fluidity indicating very quickly. a felony. in this context. providing contraband to a prison inmate.completion of goods and products being moved from one country to another. Counterfeit products are fakes or unauthorized replicas of the real product.

in the event of an investment bubble. all of which can cause problems if imposed for a long period without controlled rationing. is illegal to be possessed or sold. Real World examples – Rent control in New York. In unregulated market economies. often leading to a net social welfare loss. Price ceilings – is a government-imposed price control. stock crashes. but are liable to be seized because they were used in committing an unlawful act and hence begot illegally: BLACK MARKETS TO EXPLORE (EXAMPLES) Organs – is the trade of human organs. price ceilings do not exist. The data on the extent of the black market is difficult to obtain. An article from the Independent in 2011 sums up the debate as such: Should we be allowed to sell our organs? Yes .[1] Further problems can occur if a government sets unrealistic price ceilings. Governments use price ceilings to protect consumers from conditions that could make commodities prohibitively expensive. There is a global need or demand for healthy body parts for transplantation. Market failure – is a situation in which the allocation of goods and services is not efficient. or in the event of monopoly ownership of a product. relating to its nature. Trade in human organs is illegal in many jurisdictions in a number of ways and for various reasons. The question of whether to legalize and regulate the organ trade to combat illegal trafficking and organ shortage is hotly debated. So-called derivative contraband refers to goods that may normally be owned. leading to shortages. It is used for goods that by their nature are considered too dangerous or offensive in the eyes of the legislator (termed contraband in se) and forbidden. or even economic crises. though organ trafficking is widespread. Market failures can be viewed as scenarios where individuals’ pursuit of pure self-interest leads to results that are not efficient – that can be improved upon from the societal point of view Underground – see Black market above Contraband – denotes any item that. far exceeding the numbers available.jurisdictions have set up sophisticated systems in an effort to detect suspicious transactions or activities. causing business failures. tissues or other body parts for the purpose of transplantation. apartment pice control in Finland. See Methods for a complete list of how money laundering is carried out. Such conditions can occur during periods of high inflation. or limit. on how high a price is charged for a product. as is transplant tourism. and many have set up international cooperative arrangements to assist each other in these endeavours.

The increase in the money supply lowered real interest rates which increased investment in durable goods. as categorized by the International Union for Conservation of Nature (IUCN) Red List. forcing individuals to sell it to the Treasury. Treasury. transplant co-ordinators – involved in transplantation.[1] The figures for 1998 were. No * Encouraging people to sell parts of their bodies is morally wrong and would almost certainly lead to exploitation of the poor. making it safer for people to donate * It would mean donors were paid like everyone else – doctors.* It would boost the supply of organs helping to solve the national shortage * It would end the existing black market in organs. after which it was stored in United States Bullion Depository at Fort Knox and other locations.S. Prezi on organ donation legalisation Gold – The United States Gold Reserve Act of January 30. * It would undermine the existing altruistic donor programme. . respectively. is the second most severe conservation status for wild populations in the IUCN’s schema after Critically Endangered (CR). The act also changed the nominal price of gold from $20. In 2012. while simultaneously devaluing the U. 1934 required that all gold and gold certificates held by the Federal Reserve be surrendered and vested in the sole title of the United States Department of the Treasury.[1][2] The Gold Reserve Act outlawed most private possession of gold. dollar in an attempt to spark inflation. nurses. 1102 and 1197.S. This price change incentivized foreign investors to export their gold to the United States. The increase in gold reserves due to the price change as well as the confiscation clause resulted in a large accumulation of gold in the Federal Reserve and U. Endangered (EN). Illegal gold trade shows the situation in Congo ART Endangered Animals – An endangered species is a species which has been categorized as very likely to become extinct. * Potential donors would be more likely to conceal conditions or illnesses that might rule them out. the IUCN Red List featured 3079 animals as endangered (EN) worldwide.67 per troy ounce to $35.

for example. refined crude from Libya gets transferred from ship-to-ship in the middle of the Mediterranean. can earn $90. it is the Gulf of Guinea near Nigeria that ships need to be worried about. restricting land development or creating preserves. Billions of dollars per year of government and corporate revenues are lost due to the following activities: Tapping Pipelines: By installing illicit taps. for example. More of the world’s largest companies work in the oil patch than any other industry. Population numbers. Armed Theft (Piracy):
 This involves using the threat of violence to command a truck or ship and steal its cargo. Mexican drug gangs. everybody wants a piece of the pie – and they’ll do anything to get their share. there have been hundreds of attacks. The only problem when an industry becomes this lucrative? Eventually. In Nigeria. trends and species’ conservation status can be found in the lists of organisms by population. Find an WWF Endangered species list to find out more. which are then sent to sea to deliver the product to tankers. Oil – There are lots of stories about the illegal trade in oil at Sputnik news. For example. and oil is a money-making machine.Many nations have laws that protect conservation-reliant species: for example. As a fantastic infographic at Visual Capitalist describes “The value of the crude oil production alone is worth a staggering $1. which can be passed off as legitimate imports. Both companies and governments take advantage of this resource wealth. entire government regimes are kept intact thanks to oil revenues.7 trillion each year. to be illegally imported into the EU. the Niger Delta’s infamous labyrinth of creeks is the perfect place for bunkering to go undetected. thieves can divert oil or other refined products from pipelines. forbidding hunting. In the last few years. Add downstream fuels and other services to that. At the same. Illegal Bunkering: Oil acquired by thieves is pumped to small barges. .000 in just seven minutes from illegal pipeline tapping. Even though Hollywood has made Somalia famous for its pirates. Ship-to-Ship Transfers:
 This involves the transfer of illegal fuel to a more reputable ship.

and even more in New York City where further taxes are applied. ISIS is famous for this – they can’t sell oil to international markets directly.However. For example. adding cheap kerosene and lubricants to gasoline or diesel is an easy way to increase profit margins. but sold at full price.[7] human trafficking remains an international problem and an estimated 25-40 million people are enslaved today.[3][4][5] or the extraction of organs or tissues. In modern times slavery has been replaced by Human trafficking.[8] Human trafficking can occur within a country or trans-nationally..6% of the world’s consumption. sexual slavery. In Tanzania.[6][7] including for surrogacy and ova removal.[1] See Wikipedia Slavery History for a wider picture of this sad and tragic condition. and religions from ancient times to the present day. …….” Slave Trade – slavery is no longer legal anywhere in the world (with the exception of penal labour).Some of the tax avoidance is conducted via off-shore suppliers who take orders over the Internet. a startling 650 billion cigarettes a year. there is a simpler way for criminals to evade cigarette taxes which requires neither a shipper nor an Internet connection: Buy them in bulk in a low tax jurisdiction and physically transport them to a high tax jurisdiction. the tax difference between Virginia and New York State cigarettes is just over $4 a pack. or commercial sexual exploitation for the trafficker or others. Smuggling and Laundering:
 Smuggling oil products into another jurisdiction can help to enable a profitable and less traceable sale. and legal positions of slaves were vastly different in different systems of slavery in different times and places. An individual who throws two cases of legally-purchased cigarettes in his car trunk and drives from Richmond to Brooklyn can make a thousand dollars re-selling them illegally.1% of all fraud in the oil an gas sector relates to corruption schemes. economic. Human trafficking is a crime against the person because of the violation of the victim’s rights of movement through coercion and because of their commercial exploitation. In fact. for example. nationalities. the majority in Asia. However the social.[1][2] This may encompass providing a spouse in the context of forced marriage. authorities will turn a blind eye to hydrocarbon theft. where it sells it at a discount. Cigarettes – A great article from the Washington Post 2014 outlines the issues: “The global black market in tobacco is estimated to supply 11. the trade of humans for the purpose of forced labour. Adulteration:
 Adulteration is a sneaky process in which unwanted additives are put in oil or refined products.[8] The history of slavery spans many cultures. Human . so they smuggle oil to Turkey. someone driving a loaded tractor trailer truck can make over a million. And there are two components to this market that have drawn the particular scrutiny of law enforcement: fake cigarettes and tax avoidance…….Bribing Corrupt Officials:
 In some countries – as long as the right person gets a cut of profits. while remaining undetected. E&Y says an astonishing 57.

and does not necessarily involve the movement of the person from one place to another. or residents are taxed to buy foreign currency). ▪ The currency has been acquired illegally and needs to be laundered before the money can be used. and New Delhi where students are coming from all over India.5 million (22%) were sexually exploited. typically the US dollar. Specialised black-market dealers assist the property owners with such transactions. Mumbai. either in one direction or both (e.[9] In 2012. may be able to use the black market to buy the local currency at better exchange rates than they can get officially. According to the International Labour Organization (ILO). and gives some great common sense explanations:your browser. the ILO estimated that 21 million victims are trapped in modern-day slavery. Currency – See the following simple example from youtube This one is a bit longer. In addition.[11] . for example expatriate workers.[10] Human trafficking is thought to be one of the fastest-growing activities of trans-national criminal organizations. foreigners are taxed to buy local currency. and 2. forced labor alone (one component of human trafficking) generates an estimated $150 billion in profits per annum as of 2014. Bangalore. in the UK there is illegal subletting of social housing homes where the tenant illegally rents out the home at a higher rent. 4.</div></div> Money itself is traded on the black market. especially women and children. Human trafficking is condemned as a violation of human rights by international conventions.[35] In India.trafficking is the trade in people. Kolkotta. getting high rented PG (paying guests) or other forms of rented apartments without any taxation or regulations. Hyderabad. Of these. ▪ The currency is counterfeit. the peg often overvalues the local currency relative to what its market value would be if it were a floating currency. For instance. ▪ A government makes it difficult or illegal for its citizens to own much or any foreign currency. This may happen for one or more of several reasons: ▪ The government sets (“pegs”) the local currency at some arbitrary level to another currency that does not reflect its true market value. When it does. . human trafficking is subject to a directive in the European Union. ▪ The government taxes exchanging the local currency with other currencies.2 million (10%) were exploited in state-imposed forced labor.[12] Housing – In places where there is rent control there may be a black market for housing.[40] A government may officially set the rate of exchange of its currency with that of other currencies. 14. rental contracts with regulated rent can be bought on the black market.2 million (68%) were exploited for labor.[34] either from the current tenant or sometimes directly from the property owner.g. Those in possession of the “harder” currency.[33] In Sweden. places like Chennai.

S.S. collectors may legally keep antique weapons made incapable of being readily restored to a firing condition.[47] Weapons – The legislatures of many countries forbid or restrict the personal ownership of weapons.[46] More recently cryptocurrencies such as bitcoin have been used as medium of exchange in black market transactions.[dubious – discuss] it is also a convenient medium of exchange for both illegal transactions and for unreported income both in the U. Another segment of the population who may purchase weapons on the black market are individuals who are unable to pass the legal requirements for registration—convicted felons or those suffering from mental illness for example. and otherwise law-abiding citizens interested in protecting their dwellings. In some jurisdictions. currency.[45] Some countries. If foreign currency is difficult or illegal for local citizens to acquire. a fixed fee was charged for each new seller account. The website was launched in February 2011.[7] it was operated as a Tor hidden service. $340 billion. currency is viewed as a relatively stable store of value and since it does not leave a paper trail. currency for local currency is known as de facto dollarisation. caliber.[43] The widespread substitution of U. In England and Wales. This may be by smuggling the arms from countries where they were bought legally or stolen. U. First a report from 10 years ago on how the internet has fuelled a problem with prescription medicines: Silk Road 1.[10][11] . such that online users were able to browse it anonymously and securely without potential traffic monitoring.1 – was an online black market and the first modern darknet market. certain categories of weapons used for hunting may be owned by qualified residents but must be registered with the local police force and kept within a locked cabinet. new sellers had to purchase an account in an auction.S. using insiders. or may only be obtained legally after obtaining permits and paying fees. a process known as de jure dollarization. These restrictions can range from small knives to firearms. See also the example of the Ghanaian cedi from the 1970s and 1980s. The U. Those who may buy this way include criminals to use for illegal activities.In situations of financial instability and inflation.[42] The most recent study of the amount of currency held overseas suggests that only 25 percent of U. roughly 37 percent[41] of all U. Later. In 2012. families or businesses.0 – 3. they can also satisfy requests by gunsmithing their own firearms. was believed to be circulating abroad. abandoned their local currency and now use US dollars. currency is presently held abroad. handguns. The black market supplies the demands for weaponry that can not be obtained legally. gun collectors.g. such as Ecuador.S. etc.S and abroad. or by stealing from arms manufacturers within the country itself.[8][9] Initially there were a limited number of new seller accounts available. development had begun six months prior. best known as a platform for selling illegal drugs. Also see Wikipedia arms traffiking Medicine – A few youtube videos from different areas of the world. they will pay a premium to acquire it.). dollar is viewed as a relatively stable and safe currency and is often used abroad as a second currency. In cases where the underground economy is unable to smuggle firearms. and explosives. essentially for this reason. automatic weapons. Cryptocurrencies are sometimes favored over centralized currency due to their anonymous nature and their ability to be traded over the internet. either altogether or by classification (e.S. As part of the dark web. citizens may substitute a foreign currency for the local currency. and has been observed in transition countries such as Cambodia[44] and in some Latin American countries.

Andrew Michael Jones and Gary Davis. configurations.[94] d inyour browser.In October 2013. It recreated the original site’s setup and promised improved security. file corruption etc. often using non-standard communication protocols and ports.The reciprocal term for an encrypted darknet is clearnet[3][4][5] or surface web when referring to search engine indexable content. and services. the new Dread Pirate Roberts abruptly surrendered control of the site and froze its activity. run by former administrators of Silk Road.0. and the alleged operator was arrested on 6 November 2014 as part of the so-called “Operation Onymous“.</div></div> Darknet – is any overlay network that can be accessed only with specific software. Federal Court in Manhattan and was sentenced to life in prison without possibility of parole.[13] It too was shut down.[92] two of these suspects. Two typical darknet types are friend-to-friend[1] networks (usually used for file sharing with a peer-to- peer connection)[2] and privacy networks such as Tor. led by a new pseudonymous Dread Pirate Roberts.[91] On 20 December 2013.[15] ▪ Exercising human rights such as the right to speak or contract free from commercial or state interference. bitcoin security solutions. and dubbed it “Silk Road 2. or authorization. were named as the administrators “Inigo” and “Libertas” who had continued their work on Silk Road 2. ▪ Avoiding emotional battery (crime) such as that may be inflicted as a result of neuromarketing. It is not as big as other major dark web markets but it offers a well-designed and . illegal or counterfeit software etc. such as: ▪ Computer crime (cracking.0”. administrators from the closed Silk Road relaunched the site. Ulbricht was convicted of eight charges related to Silk Road in the U. ▪ Refusing to consent to surveillance on communications networks where no right to consent is formally recognized or honored between the Internet Service Provider and the end user. it was announced that three alleged Silk Road 2.0 came online.[3] On 6 November 2013. e-books. including its escrow system.[13] The new DPR took the precaution of distributing encrypted copies of the site’s source code to allow the site to be quickly recreated in the event of another shutdown.[6] Darknets in general may be used for various reasons. the Federal Bureau of Investigation (FBI) shut down the website[12] and arrested Ross William Ulbricht under charges of being the site’s pseudonymous founder “Dread Pirate Roberts”. Acropolis is a multisig darknet market that allows the sale of recreational drugs.[1][14][15] On 6 November 2013. confidential files. personal files.0 administrators had been arrested. or to bypass restrictive firewall- policies. Silk Road 2. pornography.) ▪ To better protect the privacy rights of citizens from targeted and mass surveillance ▪ Sale of restricted goods on darknet markets ▪ Whistleblowing and news leaks ▪ Purchase or sale of illicit or illegal goods or services[14] ▪ Circumvent network censorship and content-filtering systems.[93] Around this time.S. A new temporary administrator under the screenname “Defcon” took over and promised to bring the site back to working order.) ▪ Protecting dissidents from political reprisal ▪ File sharing (warez.

Also. . the European Banking Authority defined virtual currency as “a digital representation of value that is neither issued by a central bank or a public authority. All control flows from a central point (for better or worse). and hacking. a bureau of the US Treasury. is a type of unregulated. In 2014. Who controls cryptocurrencies? The centralized network on the left has a clear central point (you could think of the central point as a central bank). This just means that rules from a dominant system flow down to subordinate systems (think central banks cascading rules down to retail and commercial banks). It is being referred to as a referral only market but we were actually able to sign up for an account without having to use a referral link. but is accepted by natural or legal persons as a means of payment and can be transferred. defined virtual currency in its guidance published in 2013. They have a government with guns to enforce the use of the currency. By contrast. also known as virtual money. The books listed for sale are mainly related to fraud. stored or traded electronically”.</div></div> What does it mean for a currency to be decentralized and unregulated? Virtual currency. nor necessarily attached to a fiat currency. security. A central bank has the ability to extract value from the people who use their fiat currency. this network has a hierarchal control mechanism. Cryptocurrency What is a cryptocurrency. The central point is the dominant player. and can a cryptocurrency be considered a form of money? f it is disabled in your browser. but you could think of these as banks all operating on the same closed network. although there are those instructing readers on how to earn easy money – How to make $1000 per day for example and similar titles. unlike other markets where drugs are the target items. The Financial Crimes Enforcement Network (FinCEN).fast site. digital money. It also has a referral program. The decentralized network in the middle has many different points of control. The key to understanding control of a crypto currency (via consensus and contribution) vs control of a fiat currency (via central banking) is simple. and used and accepted among the members of a specific virtual community. Its main products are books and digital services. a digital currency that is issued by a central bank is defined as “central bank digital currency“. You can clearly see 7 different control points. which is issued and usually controlled by its developers (Bitcoin is an exception).

Hence there are scammers and Ponzi scheme and theft (just like with paper currencies).000 validate a transaction. Ethereum can handle much more complexity thanks to its smart contract system. even relying on it entirely in some cases. Where bitcoin supports quite simple scripting (comparatively). If a transaction doesn’t make it into a block (on Bitcoin) it waits a certain period of time to get into the next block.000. But a software layer involves humans and human error and human “evil”. and can be prone to bubbles (prices can go up and then crash – as recently with bitcoin). While the specifics of thatare beyond the scope of this guide. They can’t see who it was but they can see the size and other details. effectively forcing contractual compliance in a manner that would never be possible with a real- world contract. Miners. without some sort of middleman. Another problem is that everyone can “see” the transaction on what is called the blockchain. Why are people skeptical of cryptocurrencies? Not stable. With Bitcoin. . Sometimes software can provide a solution (a coffee shop can say. who are slowly paid in more bitcoin up to a maximum of 21.All the participants of a crypto currency can only create value for each other or the entire thing falls apart because there is no incentive to support the currency. What makes one cryptocurrency different to another? There are many reasons: Here is a discussion of Etherum vs Bitcoin – Part of the reason there are so many crpytocoins today is that many of them are built on Ethereum’s underlying technology. it’s all possible because of one key feature that Ethereum has that bitcoin doesn’t: Smart contracts. This means it might take more time (a problem). It makes it possible to set simple rules which have to be followed. A failure to perpetuate the core ideas that make a crypto coin possible makes everyone involved poorer so there are many positive incentives intentionally built into crypto currencies that prevent everyone from becoming poorer. a list of transactions is sent out to the network in the form of a “block”. (a problem). I’ll verify the transaction anyway and trust that in ten minutes I’ll know for sure and there’s not a lot of risk in this).

such as Coinbase. Even though there’s no bitcoin/cryptocurrency transaction fee. only releasing a collection of Ether when a threshold has been reached. providing the online exchange system for bitcoin. It’s interesting to note that Paypal does not accept or transfer bitcoins. the bitcoin/cryptocurrency blockchain is like a “large property rights database. and payment of fees. In many ways. Cryptocurrency uses a “push” mechanism that allows the cryptocurrency holder to send exactly what he or she wants to the merchant or recipient with no further information. you give him or her access to your full credit line. What kinds of transactions would a cryptocurrency make possible (or easier) that a normal currency might not? Fraud: Individuals cryptocurrencies are digital and cannot be counterfeited or reversed arbitrarily by the sender. There are lots of new emerging cryptology Why is Bitcoin so volatile? What determines its value? With no ties to a national economy and lofty goals. Bitcoin contracts can be designed and enforced to eliminate or add third party approvals. and fluctuating public opinion. Bitcoin’s price is famously volatile. financial deals. is that it could be used to effectively emulate a crowd-funding website. delays.” says Gallippi. even if the transaction is for a small amount. or be completed at a future date or time for a fraction of the expense and time required to complete traditional asset transfers. These services act like Paypal does for cash or credit card users. they’re likely to charge fees. many expect that most users will engage a third-party service. Notary). and as such. Lower Fees: There aren’t usually transaction fees for cryptocurrency exchanges because the miners are compensated by the network (Side note: This is the case for now). Identity Theft: When you give your credit card to a merchant. creating and maintaining their bitcoin wallets.2 billion individuals with access to the Internet or mobile phones who don’t currently have access to traditional exchange. even if its monetary impact on the world has yet to reach the heady heights of its bigger and older crypto-brother. Ethereum operates in a manner that is far more decentralizing than bitcoin. as many sovereign nations find themselves with currencies that are also vulnerable. competing cryptocurrencies. No Kickstarter company required. where the store initiates the payment and pulls the designated amount from your account. Access to Everyone: There are approximately 2. On the other hand. reference external facts. Prices have soared and plummeted in the wake of various national policies. the citizens of countries such as China and Venezuela are turning increasingly to virtual currencies.An example of how that would work. Immediate Settlement:Purchasing real property typically involves some third parties (Lawyers. as with credit card charge-backs. Credit cards operate on a “pull” basis. these people are primed for the .

which could deflate the price of these investments. Recognition at universal level: Since cryptocurrency is not bound by the exchange rates. the actions of speculators help to add market liquidity and to determine the market value of assets. But as more and more countries begin to place restrictions on cryptocurrencies. Rather it is a commodity asset that one trades. Countries all over the world have instituted or discussed increasing oversight of the currencies. Decentralization: A global network of computers use blockchain technology to jointly manage the database that records Bitcoin transactions. . and not any one central authority. but to either speculate on their asset value or use them to shield transactions from others. Bitcoin is managed by its network. Cryptocurrency operates at the universal level and hence makes transactions quite easy. Decentralization means the network operates on a user-to-user (or peer-to-peer) basis. Regulations and crackdowns are seen. China isn’t alone in this trend of cracking down on these much-hyped tokens. Without a stable value Bitcoin cannot truly be a currency. saves lots of time as well as money on the part of any business which is otherwise spent in transferring money from one country to the other. interest rates. Do cryptocurrencies weaken governments? One viewpoint from Quora: “Yes it weakens the current financial system. and make and lose money by trading them. like gold or silver. in turn. Kenya’s M-PESA system. usually the asset being valued also has an actual underlying use: you can invest in gold or use it to make jewelry or electronic components. This. However. the big appeal of cryptocurrencies is their relative lack of regulations. therefore it can be used at an international level without experiencing any problems. The forms of mass collaboration this makes possible are just beginning to be investigated. That is. conceal (often illegal) transactions. and microfinancing service recently announced a bitcoin device. Could goods be valued in cryptocurrencies? The only reasons to own Bitcoins are not to use them as a currency.Cryptocurrency market.” Among early adopters and traders. transactions charges or other charges of any country. a mobile phone-based money transfer. trading volumes are likely to slow. in hopes that its value will rise and yield a trading profit. with one in three Kenyans now owning a bitcoin wallet. So Government don’t want the value of crypto to be ruled by them. Since half of the Bitcoins are currently held up by few 1000s guys. There is nothing wrong with speculation. Bitcoins have no uses other than allowing people to hide wealth.

including Bangladesh.So far. expenses. and producing a plan to create a “single payment space. This included forming strategies to tax miners that dig for new cryptocurrencies. Money is one of the best stores of value because of its liquidity. or a commodity like a precious metal or financial capital. Their most important and essential function is to provide a ‘measure of value’. and Nepal. The Kremlin has provided few specifics on how these measures will look. What will Russia do? Thus far. Morocco. Unit of account – is a nominal monetary unit of measure or currency used to represent the real value (or cost) of any economic item. Eleven days after the announced block. Bolivia.e. assets. President Vladimir Putin issued five orders that needed to be satisfied in order to allow for crypto use. which came only a month after a promise to legalise the market.” likely as a way to digitise the Russian ruble. In October. i. currency. Fiat currencies are the generally accepted mediums of exchange. More generally. Ecuador. Russia has had a rather seesaw relationship with cryptos. that is. . income. services. Kyrgyzstan. the Kremlin began blocking access to currency exchanges in the country. but it’s clear the free crypto market won’t be a free-for-all in Russia. and be predictably useful when retrieved. retrieved and exchanged at a later time. liabilities. it can easily be exchanged for other goods and services. regulating ICOs. Current articles concerning cryptocurrencies How does the new GDPR data regulation impact cryptocurrencies? GDPR effects on cryptocurrencies Key Terms to Explore (Examples) Medium of exchange – is an intermediary used in trade to avoid the inconveniences of a pure barter system. The most common store of value in modern times has been money. The point of any store of value is risk management due to a stable demand for the underlying asset. several countries have outright banned the trading of Bitcoin and other cryptocurrencies. goods. But it’s the regulators in large cryptocurrency markets that really matter. Store of value – is the function of an asset that can be saved. a store of value is anything that retains purchasing power into the future.

it is possible to write in the public ledger. Ethereum has hard-forked to “make whole” the investors in The DAO. Historic volatility is derived from time series of past market prices.e.[4] A soft fork can also split the network when non-upgraded software creates blocks not considered valid by the new rules Wallets & private keys – stores the public and private “keys” or “addresses” which can be used to receive or spend the cryptocurrency. the abolition of restrictions on businesses competing with government services. The reward decreases transaction fees by creating a complementary incentive to contribute to the processing power of the network. With the private key. This is a consequence of the use of two incompatible sets of rules trying to govern the system. which are linked and secured using cryptography. successful miners obtain new cryptocurrency as a reward. called blocks. Hard forks – occurs when a blockchain splits into two incompatible separate chains. it is possible for others to send currency to the wallet.[1][2] While centralisation. schools. effectively spending the associated cryptocurrency. people or things away from a central location or authority. But it also is done through deregulation.[31] With the public key. Mining – In cryptocurrency networks.[1][6] Each block typically contains a cryptographic hash of the previous block. mining is a validation of transactions.Blockchain ledger – is a continuously growing list of records. a blockchain is inherently resistant to modification of the data. i. garbage collection. Volatility – (symbol σ) is the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns. distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way” Decentralised – is the process of distributing or dispersing functions. For this effort. An implied volatility is derived from the market price of a market traded derivative (in particular an option) Example Cryptocurrencies to Research .[1] For example. as described briefly above. powers. for example. especially in the governmental sphere. which had been hacked by exploiting a vulnerability in its code Soft forks – is a change of rules that creates blocks recognised as valid by the old software. It is “an open. it is backwards-compatible. is widely studied and practiced. Economic decentralisation can be done through privatisation of public owned functions and businesses.[6] a timestamp and transaction data. postal services.[7] By design. there is no common definition or understanding of decentralisation.

256 billion coins every year thereafter. and use the Internet to connect to and communicate with other Stellar servers.[6] Compared with other cryptocurrencies. Dogecoin had a fast initial coin production schedule: 100 billion coins were in circulation by mid-2015. Dogecoin quickly developed its own online community and reached a capitalization of US$60 million in January 2014.[4][5] At its core. the 100 billionth Dogecoin had been mined.” It supports tokens representing fiat currency. exchanges and remittance in a distributed process.[3] it is built upon a distributed open source Internet protocol. As of 30 June 2015. with an additional 5. Bitcoin was invented by an unknown person or group of people under the name Satoshi Nakamoto[11] and released as open- source software in 2009 Bitcoin Cash – On 1 August 2017. consensus ledger and native cryptocurrency called XRP (ripples).Bitcoin – is a cryptocurrency and worldwide payment system.[45][46] Ethereum – is an open-source.[6] which uses a consensus process that allows for payments. public database or ledger. These records are stored in a database called the “ledger”. in which social mediausers grant Dogecoin tips to other users for providing interesting or noteworthy content. Servers propose changes to the ledger by proposing “transactions”. forming a global value exchange network.[7] While there are few mainstream commercial applications. A BBC article from 8 January 2018 charts the rise of Dogecoin . without an intermediary.[9]:1[10] Its conception is peer-to-peer and transactions take place between users directly. a hard fork of bitcoin was created. Bitcoin Cash has a larger block size limit and had an identical blockchain at the time of fork. which move accounts from one state to another by spending the account’s balance or changing a property of the account.[43][44] On 12 November another hard fork.[9]:3 It is the first decentralized[a] digital currency. Ripple is based around a shared. commodity or any other unit of value such as frequent flier miles or mobile minutes. the currency has gained traction as an Internet tipping system.[13] Servers run a software implementation of the protocol. public. was created. Stellar – is an open-source protocol for exchanging money. Ripple purports to enable “secure. currency exchange and remittance network created by the Ripple company. Bitcoin Gold. cryptocurrency.[4][5] Introduced as a “joke currency” on 6 December 2013. blockchain-based distributed computing platform and operating system featuring smart contract (scripting) functionality Ripple – is a real-time gross settlement system (RTGS). known as Bitcoin Cash. Bitcoin Gold changes the proof-of-work algorithm used in mining. Dogecoin – is a cryptocurrency featuring a likeness of the Shiba Inu dog from the “Doge” Internet meme as its logo. instantly and nearly free global financial transactions of any size with no chargebacks. Released in 2012.[9]:4 These transactions are verified by network nodesthrough the use of cryptography and recorded in a public distributed ledger called a blockchain. Also called the Ripple Transaction Protocol (RTXP) or Ripple protocol. Each server stores a record of all “accounts” on the network.

vehicles used by Uber drivers must pass annual safety inspections and must have an Uber emblem posted in the passenger window. In Hong Kong SCMP reported on 23 May 2017 that “Twenty-two Uber drivers were arrested on suspicion of driving without a hire car permit and third-party insurance in a three-week undercover police operation that ended with a series of raids across Hong Kong on Tuesday. yes they should be punished under a country’s laws.[38] Both a smartphone or tablet. such as San Francisco. What is motivating the government to try to regulate its black market rather than to outlaw it? In the hope that it will be able to raise taxes. However. as they try to control market prices. etc.[39] In many cities. and ability to drive. In theory. and that a long overdue fall in the cryptocurrency market is due (it was written on 7 January 2018). Legislation in some cities. can it be seen as a black market service? Yes – if not legal or regulated by the authorities. and law abiding citizens should follow these rules. This brings in more government money. This is caused by government controls of these goods. is passing a background check. using all sorts of tricks to get round the newly introduced regulations and in turn making money as the poor suffer. Questions for Further Exploration Is it too easy to create a cryptocurrency? Consider the case of doge. The Government is put in place to run the economy. car age and type. It may also slow down the theft of goods from Government controlled shops/factories. the only requirement for driving for Uber. and a vehicle may be leased. Learn about the effort in Cuba to normalise elements of its widespread black markets—including granting self-employed individuals official licenses to sell pirated movies. Consider the recent emergence of a widespread black market in Venezuela. Discuss with your team: should consumers be punished for participating in such markets? What drives their popularity? Scarcity of basic needs products drives the popularity of the bachaqueros. health. For example (Wikipedia) – In some markets where leasing arrangements for vehicles are available. a cryptocurrency originally intended as a joke. it may be a different case when the Government themselves are the cause of the problems due to their own regulations. People are resourceful though. Lo and behold there was a correction with the BBC reporting the Worse week for cryptocurrencies since April 2013 . requires individuals who drive for Uber to also have a business license in the city in which they drive. Does its success point at any problems with the market for cyptocurrencies more broadly? Yes – the article points to a bubble. other than appropriate age.” . In cities and countries where Uber operates (or has operated) without official permission. for one. morally. There is huge volatility in these decentralised markets.

The trick is then to get these new successful engineers to pass that success on to people in their own communities/countries. and the optimist in all of us sees a glimmer of hope for those people in third world countries being able to make a success of themselves (in money terms) through their own skill/ingenuity. and so repairs will be more costly. as the authorities try to wrestle back power. according to the International Trademark Association (INTA).” So he argues that it is fine! He goes on to propose atomic swaps as a solution to make it easier: . The cryptocurrencies are also a massive gamble too. The crypto universe suddenly starts to become way more intriguing… and confusing………While we may very well need all of these cryptocurrencies in the future. As a result they are cheaper. ones that are genuine in that they have been manufactured by. The discount comes because they are not being sold through official channels. So what do they not have that warranted goods have? The full back up if something goes wrong. You may have to pay extra costs (duties) in some cases! It is not illegal. and not fall into the oft-seen corrupt practices that we see in the underdeveloped nations. but what many people miss is the fact there are actually over 1300 on the market today according to CoinMarketCap. instead of only people from the developed world who are lucky enough to receive a privileged upbringing and education (most of us. In reality this social change can only happened with the rise of decentralisation/deregulation. or even keep track of. or for or under licence from. Discuss with your team: can so many cryptocurrencies successfully coexist. unlike the black market where you may be liable to arrest. cheap transactions) to pay for our food. including for this individual in Nairobi. we will need a new solution for storing and keeping track of our various cryptocurrencies. right?). and Bitcoin to pay tuition for our childrens’ education. more than one or two different cryptos at a time………in a future world where we use Dash (instant. In what ways is the “grey market” like and unlike a traditional black market? Do different factors motivate their creation? Discuss with your team: would you be willing to buy something on the grey market that you would not be willing to buy on the black market? Goods known as “grey” products or parallel imports are.Consider the emergence of cryptocurrency mining as an entrepreneurial opportunity in the developing world. and why might nations want to have their own? A great article from Wolverine crypto currency by Andy Walner has some ideas here: ” These are by far the most widespread cryptocurrencies. So for me – yes. it’s not really reasonable to expect people to own. and are usually brought in from another country. including Kazakhstan (the CryptoTenge) and Venezuela (the Petro). the brand owner. Bitcoin: more and more nations are announcing their own cryptocurrencies. Now. Discuss with your team: could cryptocurrency help level the global playing field? Or is it wishful thinking to imagine it could provide sufficient opportunities to help lift people out of poverty around the world? A great article. consider the fact that there are only 180 fiat currencies (government currencies) in the entire world. Move over. FunFair(online casino) to legally indulge our gambling needs. and for many stories such as these there will be others that do not succeed.

▪ In-built tax code – They could be made with an in-built taxing algorithm which would be convenient for both government bodies and citizens. Remember how this is done? How to make a binding contract? Generally. to be legally valid. a person would hold only one crypto. oil.In an ideal future. . it would appear that this transaction took place using only Bitcoin. and then immediately traded all of that PowerLedger in return for electricity. Discuss with your team: is a contract the best way to form a binding agreement between two parties? If you were to sign a contract with your parents. President Nicolas Maduro of Venezuela has stated that the Venezuelan cryptocurrency will be backed by reserves of gold. with no government body or bank controlling them. swap Bitcoin for Ethereum) with just one blockchain transaction. what would it look like? How about with your teammates? Answer to first part – yes as it makes it legal and their is recourse if a problem in future. From the outside. With their own digital currency they’d be able to bypass the banks and trade overseas. This works by using hash time-locked contracts (HTLCs). Cryptos are traditionally fully decentralized. and would then be able to seamlessly transfer that coin to another such as PowerLedger at the specific time they wanted to buy some energy to power their home. and diamonds solidifying its legitimacy as a currency.” Why do nations want their own crypto currencies? Check out this article from medium. most contracts must contain two elements: 1. All parties must agree about an offer made by one party and accepted by the other.com by Jeffrey Elliot: To cryptocurrency enthusiasts one of the most attractive traits of cryptos is that they are decentralized. such as Bitcoin. gas. I’m sure the motives are different for each of the nations who want to get involved in cryptocurrencies. But technically the user actually transferred their Bitcoin for a precise amount of PowerLedger. many banks refuse to do business with Venezuela. so why would a government made digital currency be attractive to investors and users? Why would a government decide to create its own cryptocurrency? Benefits to a Government ▪ Impossible to counterfeit – Cryptocurrencies are cryptographically secured and cannot be copied. which means that when two people make a transaction both parties must be able to prove they have paid their promised amount by a certain deadline. ▪ Developing countries would be able to trade more easily that with conventional fiat currency Venezuela for example are planning on creating their own cryptocurrency to get around the trade sanctions placed on them by the US. but all of this further reinforces the crypto world and is a key indicator that cryptocurrencies are here to stay. or any transferred currency will be returned to the original owner………. enabling you to instantly exchange one crypto for another (eg.“Atomic swaps work by allowing swaps between two different blockchains.

and it is the trust and experience from the past that keeps them together. cash. See what I mean? Personally I cannot stand this mindset.” This should come down to agreements across countries. and beat them” (p. but so long as the demand is still there and the consumer market is there and the price is so high. unlike with the parents where they have a right in law to have their child at home with them (unless clear abuse can be proven). What motivated his kidnapping. and who. as superstition and cult practices have a hold on people for generations. I do not like the thought that children should need a contract with their parents! Good parenting is built on trust that builds up during childhood. Learn about the pangolin’s situation. the criminal networks will always find a way to poach animals and get these stolen gems of nature to the black market. to stop the hunting/selling in those where animals are native: and educate consumers on the black market in countries where the parts are traded. should be responsible for protecting them? The main problem? “You can pour as much money as you want into enforcement. or a pledge to exchange these items. It is all about him – “I love to go up against these guys. Read Chapter 2 of this book on deal-making by a well-known American political celebrity. then research other illegally trafficked animals. then discuss with your team: does this chapter contain good advice? With what aspects of it. As of 2016. services.2. both sides being winners in a deal. There is very little talk of compromise. Read about the kidnapping of Bitcoin exchange manager Pavel Lerner. even on a very small scale. pangolins were the most illegally trafficked animal in the world. and how was he freed? Are cryptocurrencies and criminal behaviour too closely linked for cryptocurrencies ever to become a safe medium of exchange? The Ukrainian National Police formally opened a criminal investigation into the abduction of Lerner and the disclosure of the personalities behind the attack……Despite the fact that Exmo is a small Bitcoin . as in the words (amended slightly) of another egotistical leader ” This man’s not for turning!”. Changing culture is hard though. if any. What do they have in common. If it were necessary I would turn to the UN convention on the rights of the child for inspiration. There is not a single ounce of humility. Think of Putin and North Korea. They can step away. do you disagree? Be sure to share with your teammates the last time you were involved in making a deal of your own. although I see how it allows individuals to be the best (in financial terms) at what they do. would you have approached it any differently after reading this chapter? This insight into Trump’s mindset with business explains some of the rhetoric and decision-making that he uses as the President of The USA. Something of value must be exchanged for something else of value. This can include goods. So no. born on fair treatment that respects each side as human beings. In many ways it is the same with team mates. if anyone.48) when talking about his competitors.

The authors of a report in theconversation. and the Ukrainian authorities believe that Lerner became an object of the armed because of his participation in Bitcoin trade.. The person (s) may not like publicity Is it important to know who it is? Not really. Only if anything illegal is done by the inventor (s) would it be necessary. The person may be kidnaped. as a company. and how important is it that we determine who he was? Why remain unknown? A myriad of reasons: 1.” Look into the emergence of Bitcoin ATMs around the world—do they make sense for an online currency? Why might stores and restaurants be motivated to install Bitcoin ATMs. What drives its presence in the black market. The system is understood. How this tension is resolved will determine the future of the world’s monetary systems. the underground trade in manuka honey. and do these reasons make sense—or are they just part of a passing craze? They will only make money in the medium/long term if they are placed in areas where there are likely to be people who deal in these currencies.” They go on to explain that cryptocurrency “offers more privacy than credit cards and bank accounts. 3. 2. It may be a team of people and not just an individual. and what other unusual goods can you think of that might be similarly valued or illegally exchanged? . At the present time even regular users of cryptocurrencies do not use them solely.com argue that cryptocurrencies fuel crime by concealing identities.but unlikely to be widespread. GDAX Coinbase and Bitfinex. has been copied and adapted subsequently so there is no need to have them explain the technology.exchange involving only 94 000 active investors and a daily trading volume of 125 million dollars. Keep the bitcoin name in the public eye – the secrecy promotes constant headlines in the press and thus bitcoin is constantly publicised. Some products on the black market might surprise you—for instance. They say “Anonymity in cryptocurrencies is fueling crime by enabling criminals to evade identification by law enforcement. Discuss with your team: why might this individual want to remain unknown. and will have most of their money available already in centralised forms. even against powerful entities like governments who might try to trace money obtained by criminals. 4. The mystique surrounding it is intriguing to most. so mostly urban areas. Bitcoin’s privacy both attracts users – law-abiding and otherwise – and raises law enforcement agencies’ suspicions. There is no simple answer. which is less than 1% of the leading exchanges such as Bithumb.” They do not see any quick solutions to the issue either “Crime-fighting tools require empowerment of authorities. Cryptocurrencies are innately anti-authority technologies. given their wealth and knowledge. Satoshi Nakamoto wrote the original “white paper” that helped launch Bitcoin and the entire cryptocurrency movement—but no one knows who Satoshi Nakamoto really was. We believe that this problem will get worse as cryptocurrencies evolve stronger privacy protections and become more flexibly programmable. Not a passing craze….

” Would “Torrenting” copyrighted movies or television shows be considered a black market activity. The sea cucumber is considered illegal to purchase and the fishing for these creatures has been banned in the country as well. this only empowered the black market as well as the demand for these ocean floor creatures. They’ve pegged a formula as follows: every jump in asset value wealth of ¥10 billion yields consumption to rise in proportion by ¥0. but downloading unsanctioned copyrighted material is. with a ready made demand mainly in overseas markets.com It goes on to say: “Spring of 2017 saw the country’s relative embrace of bitcoin. Turbinado.” . as the Payment Services Act formally allowed crypto trading. the world’s most popular cryptocurrency reached ¥12 trillion in market cap. or does money need to be exchanged in a transaction for it to be counted as such? Comparitech says that “Torrenting itself isn’t illegal. And by the end of last year. – according to a report in Britcoin. so you may find yourself unwittingly on the wrong side of the law. Investigate the impact of cryptocurrencies on Japan’s GDP. Many people have been caught stealing baby formula. well-triggering the bitcoin effect. Sugar: In Malaysia. according to the Nomura analysts. a very strange happening has occurred. this is a considerable option for many. It’s theorised that this is because it can be used to produce a certain base for drugs such as heroin and methamphetamine. It’s not always immediately apparent which content is legal to torrent and which isn’t.4 billion. is much healthier than white sugar and consider much higher in standards.2 to ¥0. a particularly interesting country. Here are some other unusual ones: Sea cucumbers: These creatures are illegally sold in black markets. simply because it’s an item that is hard to come by. Some fall in a grey area. For anyone not wanting to pay large fines for sugar. Some stores across the country have even taken such extreme measures as to keep the formula locked away until the time of purchase. Unfortunately.3% higher (GDP is a measure of all final goods and services produced) into early 2018. which is the type of sugar that’s usually sold at the markets. With the Chinese government making its Yuan impotent in crypto circles. especially in China. but just in the past few years. Baby milk formula: It’s widely known that a mother will do just about anything to make sure her child doesn’t starve. Your internet service provider (ISP) and copyright trolls monitoring the BitTorrent network can take action if they catch you illegally torrenting. And plenty of individuals in many Asian countries are always willing to pay a great price for these sea cucumbers. the land of the rising sun has filled that vacuum.These are high price items. Should other countries learn something from the example of Japan? Is national revenue generated through cryptocurrencies as legitimate as that generated through more traditional means of exchange? The last three months of 2017 just might carry the country’s GDP 0. because of the major restrictions. actually has a black market set up for sugar. due to over-fishing issues. Yen has followed.

but an online marketplace for black market transactions that went through several incarnations and spawned multiple imitators and descendants.com</a>. Big Macs. The plates issued by Shenzhen Bay checkpoints go for 700. in Kiev. though the practice is now common around the world—facilitate black market activity? Or do they diminish it? A special economic zone (SEZ) is an area in a country that is subject to unique economic regulations that differ from other areas in the same country. but much cheaper? Be sure to research what goods are most commonly counterfeited in the global marketplace" target="_blank">Try watching this video on www.” Interwoven black markets are markets for counterfeit goods—whether Rolex watches or. what it would look like? Advertisements . “the black market price for plates issued by Huang Gang ranges from 1 million yuan to 1. Discuss with your team: are such marketplaces inevitable? Do they pose a lasting challenge to government control of economic transactions? If you had to design your own online black market. According to the HK based SCMP it has led to : “Cross-border licence plates go for a million yuan on black market” – a report in 2012.</div></div Consider the Silk Road—not the trade route which once linked Europe and Asia.youtube. cities such as Shenzhen in China. The SEZ regulations tend to be conducive to foreign direct investment. Conducting business in an SEZ typically implies that the company will receive tax incentives and the opportunity to pay lower tariffs. Discuss with your team: would you be willing to buy counterfeit goods that are as good as the original? What if they are not as good.Does the creation of special economic zones—most famously.1 million yuan.000 yuan to 800. or enable JavaScript if it is disabled in your browser.000 yuan.