Last week I watched a 2014 documentary named the "Rise and Rise of Bitcoin." I had heard of the currency many times before and shrugged it off as a fad of the dungeons and dragons crowd. Since then I have done a little more research and even bought a tiny amount of the stuff. I didn't pick it up as an investment just a trial to see how it works.
I still have a lot to learn about the currency, but the documentary brought up some good points. It also showed me how this currency can be serious and go well beyond gamers. I'm not advocating anyone buy it, but I think it merits discussion on what Bitcoin (or a similar crypto currency) can do to international monetary systems, Governmental oversight, and does it make a case for global decentralized money?
Needless to say Libertarians are huge proponents of this currency, but it has it's issues. Salesmen of everything from illegal drugs, to fireworks were using this non-traceable currency on the web through a site called the silk road. Before it was shut down people could pick-up Steroids, weapons, fake passports, Opiates, or anything else people buy illegally over the net.
Obviously aside from the missing oversight and tax money they may be missing out on, The US government had serious concerns about terrorists and money launderers using it to acquire whatever they wanted without detection.
The US found a way to shut down the Silk Rd., but others have popped up in their place. I'm not sure what's out there now, but I'm sure there is something.
A lot of people are confused by Bitcoin, the term Bitcoin mining is also hard to grasp for some. Most people describe it as trying to explain what the internet was to the masses in 1985. Some Bitcoiners try to explain it to the newbies (me) as "it's just like PayPal, but it's anonymous." They also get asked, "who owns it?" The response is usually something along the lines of "well who owns gold?" answer, gold owners.
Gold just like paper money is only as valuable as you and I agree that it is. The same can be said for Bitcoin.
When the banks failed in Greece many of it's citizens turned to crypto currency because they didn't trust the banks to hold their money. When you think about it we are not far from a completely digital global economy anyway. When I go to my bank and put $100.00 in my account, and I go back a week later, the only proof the bank has that I gave them $100.00 is what's on the computer screen.
What I still do not understand from the documentary is the Bitcoin backers pushing this as a poor mans banking system. They claim it will allow a low income farmer in the fields of China or a rural farmer in Africa to be on equal footing with people around the world with this system. But there has only been a max $21 million limit for the currency. (see attachment) As these bitcoins have made a lot of money for the clever computer mining geeks who got in at the beginning, I don't see it helping poor farmers as the value of bitcoins can be devalued by those who accumulated a lot of them in the early days.
Either way, in my opinion this fad will probably last and within 20yrs this currency will be everywhere. Most people won't know they are using Bitcoin because by then it will be a protocol which is imbedded underneath whichever financial service they are using today.
As I've said for years, I too expect to be assimilated, just give me the chip in my head or my forearm and get it over with.
The currency has boomed and busted many times in the last few years. Despite the fluctuations, everyday more and more people pile more and more money into it. Everyday the government tries to get more oversight on it, and everyday established companies try to find a way to get this to their consumers and profit from it.
Is crypto currency our inevitable future?