What do you say to this? Ouch. Does this prove that the naysayers calling it a Ponzi Scheme were ideal? Can they get the last laugh, or is this just an anticipated evolutionary process of disturbance as all the kinks are worked out? Well, consider this thought experiment I had.
Let us say there was hanky-panky involved, let’s say somebody hacked the system or stole the digital currency. Right now, digital currency flies beneath the radar since 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’s not, but it’s worth what it signifies if most of us agree to that and have confidence in the money. What is the difference, it is an issue of confidence right?
Okay so, let’s say that the authorities, FBI, or another branch of government interferes and files charges – if they record criminal charges that someone defrauded somebody else then just how much defrauding was involved? In the event the government enforcement and justice department put a dollar amount number to that, they are inadvertently agreeing that the electronic currency is real, and it’s a value, consequently, acknowledging it. If they don’t get involved, then any fraud which might or might not have occurred sets the entire notion back a long way, and the media will continue to push down the confidence of all electronic or crypto-currencies.
So, it’s a catch-22 for the government, regulators, and enforcement folks, and they cannot look another way or deny this trend no more. Could it be time for regulations. Well, I personally despise regulation, but is not this how it usually begins. Once it’s regulated credibility is given to the concept, but his digital money theory may also undermine the entire One World Currency strategy or perhaps the US Dollar (Petro-Dollar) paradigm, also there could be hell to pay for that as well. Can the global economy handle that level of disturbance? Stay tuned, I guess we shall see.
In the meantime, what happens next will either make or break this new change in how we see monetary price, wealth, online transactions and how the actual world will mind-meld to our prospective blurred reality. I just don’t see many people thinking here, but everybody needs to, one misstep and we could all be in a world of hurt – all of humanity that is. Please consider all of this and consider it. Now that you have read through this far, has that stirred your opinions in any way? You may already have guessed that crypto genius is a vast field with much to discover. Yes, it is true that so many find this and other similar subjects to be of great value. You should take care about making too many presumptions until the big picture is more clear. So what we suggest is to really try to discover what you need, and that will usually be decided by your circumstances. You will find out the rest of this article contributes to the groundwork you have built up to this stage.
Bitcoin is farther away from being The numeraire; not just can it be a number, much as Fiat… but its value is measured in Fiat! Even though Bitcoin becomes internationally recognized as a medium of exchange, and even if it succeeds to replace the Dollar as the approved ‘numeraire’, it can never have an intrinsic measure like Gold has. Gold is exceptional in being quantified by a real, unchanging physical quantity. Gold is exceptional in storing value for thousands of years. Nothing else in touch of humankind has this unique blend of qualities.
In Summary, while Bitcoin has Some advantages over Fiat, specifically anonymity and decentralization, it fails in its own claim to being cash. Its advantages are also questionable; the intent would be to limit the ‘mining’ of Bitcoins to 26,000,000 units; this is the ‘mining’ algorithm makes harder and harder to fix, then hopeless following the 26 million Bitcoins are mined. Unfortunately, this announcement could very well be the death knell of Bitcoin; currently, a few central banks have declared that Bitcoins might 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 legitimate worth of this Bitcoin, no? This actually means is banks recognize that they might exchange Fiat to get Bitcoins… and also to really buy up the 26 million Bitcoins projected would cost a meagre 26 Billion Fiat Dollars. Twenty six billion Dollars is not even small change to the Fiat printers; it is roughly a week’s worth of printing by the US Fed alone. And, once the Bitcoins bought up and locked up at the Fed’s ‘wallet’… what practical purpose would they serve?
There would be no Bitcoins left Flow; a perfect corner. If there are no Bitcoins in flow, how on Earth can they be applied as a medium of exchange? And, what would the issuers of Bitcoin potentially do to defend against such a fate? Change the algorithm and increase the 26 million into… 52 million? To 104 million? Join the Fiat print parade? But , from the quantity theory of money, Bitcoin would start to lose value, just as Fiat supposedly loses value through ‘over-printing’…
We come into the key issue; why hunt To get a ‘new money’ if we already have the very best money, Gold? Fear of Gold confiscation? Deficiency of anonymity from an intrusive government? Brutal taxation? Fiat money legal tender legislation? All the above. The solution is not in a new form of money, 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 world of liberty not tyranny. Once this is achieved, Gold will resume its early and vital role as fair money… and not a minute before.
Rudy J. Fritsch was born in Hungary In 1947, also fled Socialist tyranny during the Hungarian Revolution of 1956. His family had lived through WWII and the resultant Hungarian hyperinflation, thus he’s intimate experience with financial destruction.
As an engineer and entrepreneur, he Conducted a successful family business in Canada for decades, at its peak using over 100 workers, until economical upheaval destroyed the sustainability of North American production. Driven out of business, he chose to study economics… to discover the origin of the unhappy circumstance.
The halving takes effect when the Number of ‘Bitcoins’ given to miners following their successful development of the new block is cut in half. Therefore, this phenomenon will reduce the given ‘Bitcoins’ from 25 coins to 12.5. It’s not a new thing, however , it does have a lasting impact and it isn’t yet known if it is good or bad to ‘Bitcoin’.