What do you say to that? Ouch. Does this prove that the naysayers calling it a Ponzi Scheme were ideal? Can they get the last laugh, or is this only an anticipated evolutionary process of disruption as all of the kinks are worked out? Well, consider this thought experiment I’d.
Let us say there was hanky-panky involved, let’s say someone hacked the system or stole the electronic money. Right now, digital currency flies beneath the radar as it is not recognized even with all the new Too Big To Fail regulations on banks, etc.. How can a digital currency have worth? Hard to say, how can a fancily printed piece of paper marked $20 be worth anything, it is not, but it is worth what it signifies if most of us agree to that and have confidence in the currency. What is the difference, it’s an issue of confidence right?
Okay so, let us say that the authorities, FBI, or another branch of government complies and files charges – should they file criminal charges that somebody defrauded somebody else then just how much defrauding was demanded? In the event the government law and justice department put a dollar amount number to that, they are inadvertently agreeing that the electronic money is real, and it has a value, consequently, acknowledging it. When they don’t get involved, then any fraud that might or might not have occurred sets the whole concept back a long way, and the media will continue to push down the confidence of all digital or crypto-currencies.
So, it is a catch-22 for the government, authorities, and enforcement people, and they cannot look another way or deny that this trend any longer. Could it be time for regulations. Well, I personally despise regulation, but is not this how it usually begins. Once it’s controlled credibility is given to the concept, but his digital currency concept could also undermine the whole One World Currency plan or perhaps the US Dollar (Petro-Dollar) paradigm, also there might be hell to pay for that as well. Can the global market manage that degree of disruption? Stay tuned, I guess we shall see.
In the meantime, what happens next will either make or break this new change in how we view monetary price, riches, online transactions and the way the actual world will mind-meld into our future blurred reality. I just don’t see many folks believing here, but everybody should, one misstep and we could all be in a world of hurt – all of humankind that is. Please think about all this and think on it. There just is no denying about the ability of crypto genius to dramatically alter some situations is incredible. It can be difficult to cover all possible scenarios simply because there is so much involved. We will begin the rest of our discussion right away, but sometimes you have to stop and let things sink in a little bit. This is the type of content that men and women need to know about, and we have no problems saying that. The balance of this article is not to be overlooked since it can make a huge difference.
Bitcoin is farther away from being The numeraire; not only can it be a few, much as Fiat… but its worth is measured in Fiat! Even though Bitcoin becomes internationally recognized as a medium of exchange, and even if it manages to replace the Dollar as the approved ‘numeraire’, it can not possess an intrinsic measure like Gold has. Gold is exceptional in being measured by a true, unchanging physical quantity. Gold is unique in preserving worth for centuries. Nothing else in touch of humankind has this unique blend of qualities.
In Summary, while Bitcoin has A few advantages over Fiat, namely anonymity and decentralization, it fails in its own promise to being cash. Its advantages are also questionable; the aim would be to restrict the ‘mining’ of Bitcoins into 26,000,000 units; that is the ‘mining’ algorithm makes harder and harder to solve, then impossible after the 26 million Bitcoins are mined. Unfortunately, this statement could very well be the death knell of Bitcoin; already, some central banks have announced that Bitcoins might become a ‘reservable’ currency.
Wow, sounds like a major step for Bitcoin, does it not? After all, the ‘large banks’ appear to be accepting the legitimate worth of this Bitcoin, no? What this really means is banks recognize that they might trade Fiat for Bitcoins… and to really buy up the 26 million Bitcoins projected would cost a meagre 26 Billion Fiat Dollars. Twenty six billion Dollars isn’t even small change to the Fiat printers; it’s roughly a week’s worth of printing by the US Fed alone. And, once the Bitcoins purchased and locked up in the Fed’s ‘wallet’… what practical purpose could they serve?
There would be no Bitcoins left Flow; an ideal corner. If there are no Bitcoins in circulation, how on Earth could they be used as a medium of exchange? And, what could the issuers of Bitcoin potentially do to defend against such a fate? Change the algorithm and increase the 26 million to… 52 million? To 104 million? Join the Fiat printing parade? But then, by the quantity theory of money, Bitcoin would begin to eliminate value, just as Fiat supposedly loses value through ‘over-printing’…
We come into the main issue; why hunt To get a ‘new money’ if we have the very best cash, Gold? Fear of Gold confiscation? Deficiency of anonymity from an intrusive government? Brutal taxation? Fiat money legal tender laws? Each of the above. The solution isn’t in a new sort of cash, but at a new social structure, one without Fiat, without Government spying, without drones and swat teams… with no IRS, border guards, TSA thugs… on and on. A world of liberty not tyranny. Once this is accomplished, Gold will restart its early and critical role as fair money… and not a minute before.
Rudy J. Fritsch was born in Hungary In 1947, also fled Socialist tyranny throughout the Hungarian Revolution of 1956. His family had lived through WWII and the consequent Hungarian hyperinflation, so he has intimate encounter with financial destruction.
As an engineer and engineer, he Ran a successful family business in Canada for years, in its peak employing over 100 workers, until economic upheaval destroyed the profitability of North American manufacturing. Driven out of business, he chose to study economics… to discover the cause of this unhappy circumstance.
The halving occurs when the Amount of ‘Bitcoins’ given to miners after their successful development of the new block is cut in half. Therefore, this phenomenon will reduce the awarded ‘Bitcoins’ out of 25 coins to 12.5. It is not a new thing, however , it does have a lasting effect and it is not yet known if it is good or bad for ‘Bitcoin’.