What do you say to that? Ouch. Does this demonstrate that the naysayers calling it a Ponzi Scheme were ideal? Do they get the last laugh, or is this only an anticipated evolutionary process of disturbance as all of the kinks are worked out? Well, consider this thought experiment I had.
Let’s say there was hanky-panky involved, let’s say somebody hacked the system or stole the digital currency. Right now, digital currency flies under the radar since it is not recognized even with all of the new Too Big To Fail regulations on banks, etc.. How can a digital currency have value? Difficult 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 we all agree to that and have trust in the money. What’s the difference, it’s a matter of trust right?
Alright so, let us say that the regulators, FBI, or another branch of government complies and files charges – should they file criminal charges that somebody defrauded somebody else then how much defrauding was involved? If the government law and justice department place a dollar sum number to that, they’re inadvertently agreeing that the electronic currency is actual, and it’s a value, thus, acknowledging it. If they don’t get involved, then some fraud which might or might not have happened sets the whole notion back a long way, and the media will continue to push down the confidence of all electronic or crypto-currencies.
So, it is a catch-22 for your government, authorities, and enforcement people, and they cannot look another way or deny this trend no more. Is it 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 theory may also undermine the entire One World Currency plan or perhaps the US Dollar (Petro-Dollar) paradigm, also there could be hell to pay for this as well. Can the international economy manage that level of disturbance? Stay tuned, I guess we shall see.
In the meantime, what happens next will either make or break this new shift in how we view monetary price, riches, online transactions and how the real world will mind-meld into our future blurred reality. I simply don’t see many folks believing here, but everybody needs to, one misstep and we could all be in a world of hurt – all of humanity that is. Please think about all of this and consider it. Has what you have found added to your prior knowledge? No question, we are just getting started with all that can be acknowledged about crypto genius. A lot of people have found certain other areas are helpful and contribute good information. You should be careful about making too many presumptions until the big picture is a lot more clear. So what we suggest is to really try to find out what you need, and that will usually be decided by your circumstances. We will tie everything together plus give you a hint of other important information.
Bitcoin is farther away from being The numeraire; not just can it be a few, much as Fiat… but its worth is quantified in Fiat! Even though Bitcoin becomes internationally accepted 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 exceptional in preserving value for centuries. Nothing else in reach of humanity has this exceptional combination of qualities.
In conclusion, while Bitcoin has Some advantages over Fiat, namely anonymity and decentralization, it fails in its claim to being money. Its advantages will also be questionable; the intent 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 might well be the death knell of Bitcoin; already, some central banks have announced that Bitcoins may become a ‘reservable’ currency.
Wow, sounds like a major measure for Bitcoin, does it not? After all, the ‘large banks’ seem to be accepting the true worth of this Bitcoin, no? What this really means is banks realize that they could exchange Fiat for Bitcoins… and to really buy up the 26 million Bitcoins planned would cost a meagre 26 Billion Fiat Dollars. Twenty six billion Dollars is not even small change to the Fiat printers; it is about a week’s worth of printing from the US Fed alone. And, once the Bitcoins purchased and locked up at the Fed’s ‘wallet’… what useful purpose could they serve?
There would be no Bitcoins left Flow; an ideal corner. If there are no Bitcoins in circulation, how on Earth can they be used as a medium of trade? And, what would the issuers of Bitcoin potentially do to defend against such a destiny? Change the algorithm and increase the 26 million to… 52 million? To 104 million? Combine the Fiat print parade? But then, by the quantity theory of money, Bitcoin would begin to eliminate value, as Fiat supposedly loses value through ‘over-printing’…
We come into the key issue; why search For a ‘new money’ when we have the very best cash, Gold? Fear of Gold confiscation? Deficiency of anonymity in the intrusive government? Brutal taxation? Fiat money legal tender laws? Each the above. The answer is not in a new sort of cash, but at a new social structure, one without Fiat, with no Government spying, without drones and swat teams… without IRS, border guards, TSA thugs… on and on. A huge independence not tyranny. Once this is accomplished, Gold will resume its ancient and vital role as fair money… and not a moment 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 resultant Hungarian hyperinflation, so he’s intimate encounter with financial devastation.
As an engineer and entrepreneur, he Conducted a successful family business in Canada for years, at its peak employing over 100 workers, until economical upheaval destroyed the profitability of North American manufacturing. Driven out of business, he chose to study economics… to detect the origin of the unhappy circumstance.
The halving occurs when the Amount of ‘Bitcoins’ awarded to miners following their successful creation of this new block is cut in half. Thus, this phenomenon will cut the given ‘Bitcoins’ from 25 coins to 12.5. It is not a new thing, however , it does have an enduring effect and it is not yet known if it is good or bad for ‘Bitcoin’.