- Published: Friday, 31 January 2014 09:08
- Written by Editor
One of the hurdles to overcome before Bitcoin can gain serious traction among the population at large is the acceptance that not only is Bitcoin every bit as much Money as the US Dollar or any other fiat currency, but it is in fact much more so.
The US Dollar is an illusion with no substance, no true value except to the extent that the Federal Reserve Bank and US Government says it does. In reality the US Dollar has no more value than Monopoly Money and one day soon will be worth the same.
The USA and financial system and participants are countless trillions of Dollars in debt, and taking in to account funded and unfunded liabilities and derivative contracts the total debts may well exceed a Quadrillion Dollars which is many times more than the GDP of the entire planet. Not only can these debts never be repaid, there is no intention of repaying them as the plan appears to be to drive the US Dollar in to worthless oblivion and then start the process all over again - a cycle which typically takes 40 years but has currently lasted for 43 years due to the issuance of debt under the "fractional reserve lending" system which allows Dollars and other fiat currencies to be simply created out of nothing, thus extending the money supply, reducing the value of the currency and causing rising inflation.
Decades ago it was usual for the man of the house to work while the woman remained at home looking after the home and raising children, always with enough money. As more Dollars were printed, causing more inflation, soon both the man and woman had to work just to make ends meet. Later, with more Dollars printed and more inflation, it became necessary to turn to loans and credit cards as well as other forms of debt to make ends meet. Now due to more money being printed and inflation at an accelerated rate, people cannot afford to pay the debts as well as a basic living, and home repossessions are escalating. There is only one possible next event. With massive, un-payable debts by governments, banks and individuals and money being printed at an accelerated rate, there will be an implosion of the global financial and banking system with fiat currencies becoming worthless - all will be lost.
This is only possible because the financial system is centrally controlled, manipulated and abused, often criminally, by banks and governments for their own purposes - never for the people.
Bitcoin is the perfect and timely solution to the pestilence of fiat currencies, and is no coincidence that it has risen at exactly the right time for humanity who have finally had enough of a corrupt, failed, abused system that works against them, never for them.
This article is beyond the scope of the overall benefits of Bitcoin - other articles cover that very well - but suffice it to say that Bitcoin is not in the hands of banks and governments that abuse can abuse it, and cannot be created out of thin air. Bitcoin also has no single part controlling it for its own nefarious ends, being totally in the hands of the global participants.
Bitcoin, like the Internet itself, is the perfect solution for humanity at the right time, whose day has come, and nothing - no government or bank - can stop Bitcoin now.
How Bitcoin Compares To The Accepted Definitions Of Money.
1. Portable: Bitcoin is infinitely portable through electronic distribution, Smart Phones, Tablets and other portable computers, Paper Wallets and Cards.
2. Durable: Here Bitcoin does fall down somewhat in that Bitcoins can be easily lost due to negligence - accidental deletion of wallets, forgetting pass phrases etc. Fiat currencies are not durable either. Durability of Bitcoin will increase as users become more sophisticated and technologies make it more difficult to lose Bitcoins this way.
3. Divisible: Bitcoin can be divided down to fractions of a Bitcoin very easily. As the value of Bitcoin increases, it will become necessary to divide Bitcoin down to more and more decimal places. For example, if a Bitcoin was worth $10,000 which will almost certainly be the case in future, Bitcoin would need to be divided by 7 decimal places - 0.0000001 of a Bitcoin - at least, to facilitate purchase of smaller items. Failure to do this would render Bitcoin virtually useless as money for the masses.
4. Fungible: Completely interchangeable with another unit of the same money. Bitcoin passes this test.
5. Non-essential for consumption: A pure unit of money that is not also a commodity that can be taken out of circulation for consumption. Bitcoin passes this test - even Gold and Silver do not because they are both used for industrial purposes as well as store of value.
6. Easily Identifiable: This is probably the greatest strength of Bitcoin due to the fact it is totally unique as a Crypto-Currency and almost impossible to forge. The same cannot be said of conventional fiat currencies.
7. Endurable Store of Value: This is an extremely important aspect of money in that a unit of money today will at least retain or increase its value over time. Bitcoin passes this test due to the fact that only 21 million Bitcoins will ever be "mined" and will therefore always have value due to scarcity. The US Dollar and all other fiat currencies fail this crucial test miserably because they can be generated ad-infinitum with zero asset backing of value, especially since the US Dollar was de-coupled from Gold in 1970. Of course the value of Bitcoin will vary as it is traded and mined, but it will never exceed a finite circulation of 21 Million.
Conclusion - Why Bitcoin Can Be A Global Monetary System
It is clear that Bitcoin qualifies as Money far more than the US Dollar and other fiat currencies, and on a par with Gold and Silver.
The fact that Bitcoin is electronic is not relevant, only that is fulfils the criteria for Money, and that all participants agree that it is Money. That is all.
It is clear that Bitcoin is rapidly gaining acceptance as Money and will, quicker than most would believe, be globally accepted as Money.
Bitcoin can and surely will become a Global Monetary System, like the Internet, totally in the hands of the people for the people, with no malign influence from banks, governments and others who have historically sought to abuse money and currencies for their own greed and power.