WASHINGTON, November 25, 2017 — Almost every available video about investing in cryptocurrencies like Bitcoin is created by an individual who seems completely insane. For many critics of these videos, there appears to be a strong correlation between investing and a firm belief that the earth is flat.
The best-known cryptocurrency todate is Bitcoin. But what exactly is it? Short answer: It is an alternative currency available via the internet.
Longer answer: Each unit of a cryptocurrency like Bitcoin has its own unique identifier that can’t be replicated, utilizing “blockchain” security technologies, described briefly here:
“A blockchain – originally block chain – is a continuously growing list of records, called blocks, which are linked and secured using cryptography. Each block typically contains a hash pointer as a link to a previous block, a timestamp and transaction data. By design, blockchains are inherently resistant to modification of the data. A blockchain can serve as “an open, distributed ledger that can record transactions between two parties efficiently and in a verifiable and permanent way.”
Those who use Bitcoin have a ledger on their computer that records every transaction that has ever been made, ensuring that no two people have or use the same Bitcoin.
Bitcoins are given a value, just like anything else that people want to acquire. Bitcoin(s) enable those who own them to use the virtual currency to essentially barter for goods and services.
At the beginning, a Bitcoin was only worth a few cents. But, as more and more people started to realize how valuable a separate online currency could be and began to use it, demand for Bitcoins skyrocketed. As of this writing, a single Bitcoin is worth over $8,000. Problematically, however, a Bitcoin’s current value can fluctuate wildely over days or even hours.
Articles continue to appear, tracing the seemingly brilliant success of people who acquired Bitcoin when they were only worth a few cents. Purportedly, such foresightful geniuses are now millionaires. At least some of these stories may be true. On the other hand, other stories appear detailing the woes of individuals who have aquired virtual currencies but lost their codes, leaving themselves and their ledgers with nothing. One man is said to have spent years searching through landfills for a loset hard drive that had millions of dollars worth of Bitcoin stored on it.
As virtual currencies have become somewhat more commonplace, systems have evolved. Storing and using Bitcoins transactionally has become a lot easier and safer for new and existing users. Available options for storing this virtual currency has widened. But one burning question remains: Why did it get to the point where Bitcoin has become so valuable that demand for it is continuing to spiral upward at a rapid pace?
Bitcoin: A non-Federal Reserve-regulated currency
One significant appeal inherent in Bitcoin is that its availability and value are not controlled by the U.S. Federal Reserve or any similar state-regulated banking system worldwide. There is, in fact, no central control of Bitcoin. Instead, those using Bitcoin are in control of it. If you happen to hold a lot of this or other virtual currencies, you are now one of those bankers that everyone protests on Wall Street.
That’s because holders of this and other virtual currencies benefit from their positions in it.
There is an unchangeable limit to Bitcoin no more than 21 million can be printed basically it can’t be messed with by anyone but the people. This is why it’s called a cryptocurrency or a virtual currentcy. It’s secured by hard-do-describe mathematically-based security known as “blockchain” instead of dubious, trust based systems like the paper currency issued by central banks around the world.
However, this security methodology does not mean virtual currencies are not volatile. Just like standard-issue national currencies, they definitely are. But the central idea here is that the people give this currency its value, not governments.
Another reason why crypto- or virtual currencies are growing in popularity is that under the law – at least as it’s curently contituted – is because you can likely avoid taxes and capital controls with it.
As just noted, however, perhaps the biggest advantage of Bitcoin and its fellow traveling currencies is that governments can’t control it. Governments do try. But you can still walk across any international border with millions of dollars of virtual, usable currency residing in you head from memorizing a unique code.
There are, however, distinct disadvantages to dealing in an unregulated virtual currency. Many individuals and analysts alike are worried that the creator or creators of Bitcoin are totally anonymous. The currency itself hasn’t been tested in a real financial crisis like the still-recent Great Recession, which brought world economies, not to mention the value of individual currencies, into serious doubt. What would happen in a similar situation with a virtual currency without any central means of control or responsibility for its value.
On the other hand, how much can we trust our current roguish clique of international currency guarantors? The more corrupt our governments get and the less they represent to people the more we have to represent ourselves and try to empower ourselves.
In the UK, for example, voters desperately tried to vote their way out of the EU and out the insanity of a collective central Euro-socialist government that has ignored the national concerns of individual peoples and nations, risking their obliteration through uncontrolled immigration of foreign nationals, many of whom have no intention of becoming good and loyal citizens of their new countries? Yet having voted for the Brexit and for greater national sovereignty, what they’re getting is Teresa May who is cracking down on internet free speech.
It follows that if we can’t vote our way out of chaos, what we can do is take control of our own lives by being our own bankers via the increasing use of cryptocurrencies. Due to its current, spectacular volatility, Bitcoin may, in fact, not be the ultimate solution. Yet the simple idea that we can control our own monetary system and its value totally outside of state control has become immensely appealing in the months and years that have followed the peak of the Great Recession. Whether virtual currencies succeed or not is all part of the greater issue of ensuring our national and individual freedom and sovereignty.
The arrival of these new and yet-untested currencies is above all a reaction to the banksters who’ve already destroyed our savings by confiscating, redistributing and untlimately printing money, apparently to enrich themselves at great cost to others like ourselves. As a result, many individuals today want to make sure they can save a store of value for their future while assuring those savings can’t be destroyed, a la 2007-2010; or worse, like what’s currently happening in Venezuela.
Like precious metals before them, it’s increasingly possible that something like Bitcoin (or its friends) might provide a nest egg which could essentially protect individual and family assets if all other assets become worthless. Being your own bank is the best protection against a government-protected institutional bank’s screwing you, just like they did the last time around. It’s become a matter of ensuring our financial security instead of relying on others like governments and central banks to do it for us. We’ve just seen how that works out.
Whatever your own opinion on the topic, it’s well worth looking into and learning more about cryptocurrencies and how they work just to understand future possibilities. Individual savers and investors are not generally advised at this point to gamble their existing life savings on sometimes elusive and hard-to-understand virtual currencies like Bitcoin. Yet all are well advised investigate such alternative currencies and trading systems. At the very least, they’ve evolved into fascinating concepts that may shape our futures by providing a new design for supporting the machinery of freedom.