Let’s say there was hanky-panky involved, let’s say someone hacked the system or stole the electronic currency. At this time, digital currency flies under the radar as it isn’t recognized even with all of the new Too Big To Fail regulations on banks, etc.. How can a digital money have worth? Difficult to say, how can a fancily printed piece of paper marked $20 be worth anything, it’s not, but it’s worth what it represents if we all agree to this and have trust in the currency. What’s the difference, it’s an issue of trust right?
Alright so, let us say that the authorities, FBI, or another branch of government interferes and documents charges – if they record criminal charges that somebody defrauded someone else then just how much defrauding was demanded? If the government enforcement and justice department put a dollar sum number to this, they’re inadvertently agreeing that the electronic money is real, and it’s a value, thus, acknowledging it. When they don’t get involved, then any fraud which might or might not have occurred sets the whole concept back a ways, and the media will continue to push down the confidence of all digital or crypto-currencies.
So, it’s a catch-22 for the government, authorities, and enforcement folks, and they cannot look the other way or deny that this trend no more. Could it be time for regulations. Well, I personally despise regulation, but is not this how it usually starts. Once it is regulated credibility is given to the concept, but his electronic money theory may also undermine the whole One World Currency plan or perhaps the US Dollar (Petro-Dollar) paradigm, and there could be hell to pay for this as well. Can the international economy handle that level of disturbance? Stay tuned, I guess we shall see.
In the meantime, what happens next will either break or make this new change in how we view monetary value, wealth, online transactions and the way the real world will mind-meld to our future blurred reality. I simply don’t see a lot of folks thinking here, but everybody needs to, one misstep and we could all be in a world of hurt – all of humankind that is. Please think about all of this and think on it. Hopefully, just as with so many other areas regarding crypto genius, you will need to pay more attention to some things than others.
But that can vary slightly, and it really just will depend on how you want to use the information. But we are not finished, yet, and there is always much more to be revealed. Keep reading to discover even more, and what we will do is add a few more critical topics and recommendations for you to consider.
Some of these suggestions really are critical to your comprehending, and there is even more going beyond what is about to be covered.
Bitcoin is further away from being The numeraire; not just can it be simply a few, much as Fiat… but its worth is measured in Fiat! Even if Bitcoin becomes internationally accepted as a medium of trade, and even though it manages to replace the Dollar as the approved ‘numeraire’, it can never have an intrinsic measure like Gold has. Gold is exceptional in being measured by a real, unchanging physical quantity. Gold is exceptional in storing worth for centuries. Nothing else in touch of humankind has this exceptional combination of qualities.
In Summary, while Bitcoin has Some advantages over Fiat, specifically anonymity and decentralization, it fails in its own claim to being money. Its advantages will also be questionable; the intent is to restrict the ‘mining’ of Bitcoins into 26,000,000 units; that is the ‘mining’ algorithm gets harder and harder to fix, then impossible after the 26 million Bitcoins are mined. Unfortunately, this announcement could very well be the death knell of Bitcoin; already, a few central banks have announced that Bitcoins might become a ‘reservable’ currency.
Wow, sounds like a Significant step for Bitcoin, does it not? After all, the ‘big banks’ appear to be accepting the true worth of the Bitcoin, no? What this really means is banks recognize that they might exchange Fiat for Bitcoins… and to actually 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 is roughly a week’s worth of printing by the US Fed alone. And, once the Bitcoins purchased and locked up at the Fed’s ‘wallet’… what useful purpose would they serve?
There would be no Bitcoins left in Circulation; an ideal 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 boost the 26 million into… 52 million? To 104 million? Combine the Fiat printing parade? But then, from the quantity theory of money, Bitcoin would begin to eliminate value, just as Fiat supposedly loses value through ‘over-printing’…
We come into the key dilemma; why hunt 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 legislation? Each the above. The answer isn’t in a new sort of money, but at a new social structure, one without Fiat, with no Government spying, without drones and swat teams… with no IRS, border guards, TSA thugs… on and on. A huge liberty not tyranny. Once this is achieved, Gold will restart its early and critical role as fair money… and not a moment before.
Rudy J. Fritsch was born in Hungary In 1947, and 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 destruction.
As an engineer and entrepreneur, he Conducted a successful family business in Canada for years, at its peak using over 100 workers, until economical upheaval destroyed the sustainability of North American production. Driven out of business, he decided to study economics… to detect the cause of this unhappy circumstance.
The halving occurs when the Number of ‘Bitcoins’ given to miners after their successful creation of this new block is cut in half. Thus, this phenomenon will reduce the given ‘Bitcoins’ out of 25 coins to 12.5. It is not a new thing, however , it does have an enduring effect and it isn’t yet known whether it is good or bad for ‘Bitcoin’.