Bitcoin … Monetary Nirvana?
If you do not know what Bitcoin is, do a little research on the Internet and you'll get plenty … but the short story is that Bitcoin was created as a replacement tool, with no central bank or bank on issue issue. In addition, Bitcoin transactions must be themselves, that is, anonymous. It is most interesting that Bitcoins do not have a real world; only exist in computer software as a virtual reality.
The general idea is that bitcoins are "mined" … an interesting term here … by solving an increasingly difficult math formula – is much more difficult than mining Bitcoins; existence; again interesting – on a computer. After the creation, the new Bitcoin will be placed in an electronic "wallet". Then there is the possibility of trading real goods or the Fiat currency on Bitcoins … and vice versa. Furthermore, as there is no central Bitcoins issuer, this is very distributed, so it can withstand the "manageability" authority.
Of course Bitcoin's supporters, those who benefit from Bitcoin's growth, insist that it's quite loud that Bitcoin's money … and not just that, but it's the best money ever for the money of the future. etc … Well, the Fiat supporters are shouting as loud as paper money … and we all know that Fiat paper is not in any way money because it lacks the most important feature of real money. The question is still Bitcoin's money … never mind that this money is the future or the best money ever.
If you find out, look at the attributes that determine the money and see if Bitcoin complies. Three basic features of money;
1) money is a stable value range; the most important attribute since the value of a numeric or value-measuring unit fails without the stability of the value.
2) money is the numeric, billing unit.
3) Money is a swap, but other things can accomplish this function, that is, direct barter, "netting" is the replaced goods. Also "commercial goods" (chits), which are held temporarily; and finally mutual borrowing; ie by netting the value of promises made by exchanging invoices or IOUs.
Compared to Fiath, Bitcoin does not work too badly as a substitute. Fiat only accepts the issuer's geographical area. The dollar is not good in Europe, etc. Bitcoin is internationally accepted. On the other hand, very few retailers accept Bitcoin's salary. Without making the takeover profit geometrically, Fiat would have won … though in the exchange rate between countries.
The first condition is much tougher; money should be a stable range of values … now Bitcoins are from $ 3.00 to $ 1000 in just a few years – it falls as far as storing a "precious value" as you can get! In fact, these benefits are perfect An example of a speculative boom … such as Dutch tulips, junior mining companies or Nortel stocks
Of course, Fiat is a flawed one, for example, the US dollar, the main Fiat for a few decades has lost more than 95% of its value … neither the boy nor the Bitcoin has the most important money, the capacity to store the value and the reserve value in a timely manner Real money, that is Gold not only for centuries, Even Fiat and Bitcoin do not have this critical capacity … both are not money.
End l we get to the second attribute; the numerical Now this is really interesting, and you can see that both Bitcoin and the success of Fiat, as "numeric" examined the issue closely.. Numeraire refers to the use of money not only to store a value, but to some extent measure or compare value. It is impossible to evaluate in Austrian economics; After all, value only lives in human consciousness … and how can any factor of consciousness be measured? However, through the interaction between the bid market and the offer, a market price can be established … if only for the moment … and this is the market price on the account, the most marketable good money.
So how do we determine Fiat's value …? By the concept of "purchasing power" … that is, the value of Fiat is determined by what can be traded … the so-called "commodity basket". But obviously, Fiat does not have the value of its own, but rather the value of goods and services. Damage caused by the goods it purchases comes from the Fiat number. After all, what's the difference between a dollar and a hundred dollar bill, except the printed number … and the purchasing power of the bill?
Gold does not measure what it is; in fact, the measurement of another physical standard in absolute terms; weight or weight. One gram of gold is one gram of gold and one ounce of gold is one ounce of gold … regardless of which number is engraved on its surface, its face value & or otherwise. The cause is the opposite of Fiat; The weight, inner quality of gold … are not measured by purchasing power. Do you have any idea about a dollar's ounce value? It does not exist. Fiat has only been measured & # 39; an effective quantity … the number printed, the "face value" & # 39;
Bitcoin is far from being numeric; not just a number like a Fiat … but its value is measured by Fiat! Even if Bitcoin appears to be internationally accepted as a swap, and even if it succeeds in accepting a dollar, it can never have an internal property like gold. Gold is unique in its ability to be measured with true unchanged physical quantities. Gold has been unique in storage for thousands of years. This unique combination of humanity is nothing more than reaching mankind. Finally, while Bitcoin has some advantages at Fiat, rarely in terms of anonymity and decentralization, it does not match its money. Its benefits are also questionable; the intention is to limit the "mining" of bitcoins to 26,000,000 units; ie "mining" the algorithm is harder and harder to solve, it is impossible after the 26 million bitcoin breaks down. Unfortunately, this announcement may well be the deadly node of Bitcoin; some central banks have already announced that bitcoins may become "currency."
Wow, it seems like a big step for Bitcoin, is not it? Finally, "big banks" seem to accept Bitcoin's true value, right? this really means that banks recognize that they are capable of trading the Bitcoin on the Fiat … and that they actually buy the 26 million proudly bitcoin would cost $ 26 billion worth of Fiat dollars. Twenty-six billion dollars is no less a change for Fiat printers; it's worth printing for about a week on the United States.When bitcoins were bought and locked in the Fed's wallet … what useful purpose could be
Bitcoin was not in circulation, a perfect corner.If Bitcoin is not in circulation, how would it be possible to use the exchange as a tool on Earth? And what can Bitcoin do to help protect a ilye fate? Modify the algorithm and increase 26 million … $ 52 million? To 104 million? Join the Fiat print parade? But according to the quantum theory of money, Bitcoin would lose value, just as Fiat supposedly loses its value through overpressure. …
We get the key question; why seek new money? when do we have the best money, Gold? Fear of the confiscation of gold? The lack of anonymity from the intrusive government? Brutal taxation? Fiat money is legal tender? All of the above. The answer is not in the form of new money, but in a new social structure without a Fiat, without government espionage, without troops and swat troops … without IRS, border guards, TSA bombers … and more. The world of freedom is not tyranny. If that happens, Gold continues its ancient and vital role as honest money … and not a moment later.
Source by Rudy Fritsch