Bitcoin is farther away from being The numeraire; not only can it be simply a number, 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 succeeds to replace the Dollar as the accepted ‘numeraire’, it can never have an intrinsic measure like Gold has. Gold is exceptional in being measured by a true, unchanging physical quantity. Gold is unique in storing worth for thousands of years. Nothing else in reach 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 promise to being cash. Its advantages will also be questionable; the intent is to restrict the ‘mining’ of Bitcoins to 26,000,000 units; that is , the ‘mining’ algorithm gets harder and harder to solve, then hopeless 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 may 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 legitimate worth of this Bitcoin, no? What this actually means is banks recognize that they could 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 from the US Fed alone. And, once the Bitcoins bought up and locked up at the Fed’s ‘wallet’… what useful purpose would they serve? While this is all appropriate to your discovery, a few items about bitcoin revolution richard branson carry more weight than others. Do take a close look at what you require, and then make a determination concerning how much different things apply to you. We really are just getting going here, and hopefully you will be excited about what more is in store. Yet have more big pieces of the overall picture to present to you, though. Even following what is next, we will not quit there because the best is yet to come.
There would be no Bitcoins left in Circulation; a perfect corner. If there aren’t any Bitcoins in flow, how on Earth could they be used 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 to… 52 million? To 104 million? Join the Fiat print parade? But then, by the quantity theory of money, Bitcoin would start to eliminate value, as Fiat supposedly loses value throughout ‘over-printing’…
We come to the main issue; why hunt To get a ‘new money’ if we have the best money, Gold? Fear of Gold confiscation? Lack of anonymity in the intrusive government? Brutal taxation? Fiat money legal tender laws? All the above. The answer is not in a new sort of cash, but at a new social structure, one without Fiat, without 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 accomplished, Gold will resume its early and vital role as honest money… and not a minute before.
Rudy J. Fritsch was created in Hungary In 1947, and fled Socialist tyranny throughout the Hungarian Revolution of 1956. His family had lived through WWII and the consequent Hungarian hyperinflation, thus 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 employing over 100 workers, until economic upheaval ruined the sustainability of North American manufacturing. Driven from business, he decided to study economics… to discover the cause of the unhappy circumstance.
The halving takes effect when the Number of ‘Bitcoins’ given to miners following their successful development of this new block is cut in half. Thus, 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’s good or bad to ‘Bitcoin’.
People, who Aren’t Knowledgeable about ‘Bitcoin’, typically ask why does the Halving take place if the consequences cannot be predicted. The answer is simple; it is pre-established. To counter the dilemma of currency devaluation, ‘Bitcoin’ mining was designed in such a way that a total of 21 million coins could ever be issued, which is accomplished by cutting down the reward given to miners in half every four decades. Therefore, it is an essential element of ‘Bitcoin’s existence rather than a choice.