Bitcoin is one of multiple crypto-currencies. One of the biggest selling points of Bitcoin is that it is limited in its supply. Supposedly, unlike Federal Reserve Notes (referred to as dollars), its supply remains fixed, and therefore it will retain its purchasing power. Any intellectually honest observer however has seen Bitcoin go up and down like a yo-yo over the past few years bouncing between bubbles. Additionally, Bitcoin is a digital phenomena which means you never really possess it. It’s in an account in your name controlled by shadowy figures unknown to any but the most elite insiders. What happens when the competition for digital currencies grows? Who decides how many digital currencies there are, and who may produce and control them? Will there be a rush to create more of Bitcoin in order to fend off competition? Will the government step in and control it? Will the government corrupt it? Will the government undermine the internet?
Will your Bitcoin account ever get hacked? There is no “hack proof” web site on the face of the planet. The Pentagon has been hacked before! Look at the fallout from Wikileaks. What if someone makes an honest mistake with your account, and credits someone else. What if we have an EMP (electro magnetic pulse) which throws the electric grid out of commission for months or years?
If you think of Bitcoin as real money, then are you prepared to be paid in Bitcoin? Do you think everyone in the economy is prepared to use Bitcoin for their savings, checking, credit card, cash payments etc.?
There is only one real money that has thousands of years of documented, verifiable history as everyday money. That is simply gold and silver. Gold cannot be manufactured, printed or artificially expanded in its supply. It takes raw materials, manual labor, time, equipment and industry to create bars and coins from these two metals, and the supply is very limited in reality, not just in theory. You have seen corrupt bankers, and the Bitcoin people are not like Caesar’s wife; beyond reproach! Bankers hate gold and silver, and therefore will oppose it at all levels and at all times. Could the bankers be behind Bitcoin? Could Bitcoin be subject to manipulation through shorting?
Here is the criteria for money:
1.) It must be hard to come by and limited in availability. (Bitcoin does not fit this criteria.)
2.). It must be durable (past, money has been represented by non-durable salt and sea shells) Bitcoin remains to be seen as far as durability.
3.) It must be easily divisible (Bitcoin fits this very well)
4.) It must be a store of value (can’t be inflated away like dollars) Bitcoin is presented as such, but cannot be verified, and is subject to manipulation and the increase in supply by those in control) Every banker throughout history has succumbed to the temptation to increase the paper supply while not increasing the supply of the gold/silver backing.
5.) It must be portable (Bitcoin fits this, but not in a tangible way – only in a cyber/digital way)
End of story.
Gold as exhibited by the chart below, is not a commodity – it is money.
Pensamiento Peligroso writes the truth as he sees it, and if it upsets you, then it makes you think!