What Is Bitcoin Money?
The one thing required of all forms of money, including gold...
The modern dollar is essentially a cryptocurrency managed by the Fed...
Then Simon Black shows you why Bitcoin is the modern version of the printing press,
and why it’s such a threat to elites...
At various times in history, feathers have been money. Shells have been money.
Dollars and euros are money. Gold and silver are certainly money.
Bitcoin and other cryptocurrencies can also be money. People say some forms of money,
such as Bitcoin or U.S. dollars, are not backed by anything.
But that’s not true. They are backed by one thing: CONFIDENCE.
If you and I have confidence that something is money and we agree that it’s money,
then it’s money. I can call something money, but if nobody else in
the world wants it, then it’s not money. The same applies to gold, dollars and
cryptocurrencies. Governments have an edge here, because they make you pay taxes in their money.
Put another way, governments essentially create an artificial use case for their own
forms of paper money by threatening people with punishment if they do not pay
taxes denominated in the government’s own fiat currency. And the dollar has a
monopoly as legal tender for the payment of U.S. taxes. According to John Maynard
Keynes and many other economists, it is that ability of state power to coerce tax payments
in a specified currency that gives a currency its intrinsic value. This theory of money
boils down to saying we value dollars only because we must use them to pay our taxes
otherwise, we go to jail. WOW. WE GO TO JAIL. So-called cryptocurrencies such as Bitcoin
have two main features in common. The first is that they are not issued or regulated
by any central bank or single regulatory authority. They are created in accordance with certain
computer algorithms and are issued and transferred through a distributed processing network
using open source code. It is impossible to destroy a cryptocurrency by attacking
any single node or group of nodes. Any particular computer server hosting a cryptocurrency
ledger or register could be destroyed, but the existence of the currency would continue to reside on
other servers all over the world and could quickly be replicated. It is impossible to destroy
a cryptocurrency by attacking any single node or group of nodes.
The second feature in common is encryption, which gives rise to the CRYPTO part of the name.
It is possible to observe transactions taking place in the so-called block chain,
which is a master register of all currency units and transactions. But the identity of
the transacting parties is hidden behind what is believed to be an unbreakable code.
Only the transacting parties have the keys needed to decode the information in the block chain
in such a way as to obtain use and possession of the currency. This does not mean
that cryptocurrencies are fail-safe. But on the whole, the system works reasonably well and
is growing rapidly for both legitimate and illegitimate transactions.
It’s worth pointing out that the U.S. dollar is also a digital cryptocurrency for all
intents and purposes. It’s just that dollars are issued by a central bank, the Federal Reserve,
while Bitcoin is issued privately. While we may keep a few paper dollars in our wallets from
time to time, the vast majority of dollar-denominated transactions, whether in currency or securities form,
are conducted digitally. We pay bills online, pay for purchases via credit card and receive direct deposits
to our bank accounts all digitally. These transactions are all encrypted using the same
coding techniques as Bitcoin. The difference is that ownership of our digital dollars is
known to certain trusted counterparties such as our banks, brokers and credit card companies,
whereas ownership of Bitcoin is known only to the user and is hidden behind the block chain code.
Bitcoin and other cryptocurrencies present certain challenges to the existing system.
One problem is that the value of a bitcoin is not constant in terms of U.S. dollars.
In fact, that value has been quite volatile, fluctuating between $100 and its present high in
December 2017 above $19,000 over the past few years. It’s currently around $9,000 just now on
January 17, 2018. It’s true that dollars fluctuate in value relative to other currencies such as
the euro. But those changes are typically measured in fractions of pennies,
not jumps of $100 per day. One potential solution to the Bitcoin volatility problem I find
interesting is to link Bitcoin to gold at a fixed rate. This would require consensus in the Bitcoin
community and a sponsor willing to make a market in physical gold at the agreed value in Bitcoin.
This kind of gold-backed Bitcoin might even give the dollar a run for its money as a reserve currency,
especially if it supported by gold powers such as Russia and China. Both are looking for ways
out of the current system of dollar hegemony, which will only take on added urgency now that the U.S.
has imposed harsh sanctions against Russia and is signalling a trade war against China.
China just in the end of 2017 create a new cryptocurrency called "petroyuan" backed by natural resources.
Below, Sovereign Man, Simon Black shows you why cryptocurrencies like Bitcoin are as much of a
threat to today’s elites as the printing press was to elites back in the 15th century. Read on.
for The Daily Reckoning
Editor’s note: If you feel like you’ve missed out on Bitcoin, there is good news
There’s a whole new crop of cryptocurrencies coming out that could give everyday investors
the opportunity to make fortunes in this exciting new market.
Within the next couple of days, we’ll show you how you can participate in these opportunities
for potentially life-changing gains, so stay tuned. This could be one of the few ways everyday
investors can legally get rich in a hurry in today’s market. Fill out our form and we will contact you.
Cryptocurrencies are today’s version of the printing press a truly game-changing technology
that the ruling elite sees as a threat to their control...
The Invention of the Printing Press and the Rise of Bitcoin
By Simon Black
In 1483, just as Johannes Gutenberg’s new moveable type printing press was spreading across Europe,
Sultan Bayezid II of the Ottoman Empire issued a staunch decree banning
the machine from his realm. At the time the Ottoman Empire was the dominant superpower
in the world, having conquered most of the Middle East, North Africa, and southeastern Europe.
But Bayezid was afraid of the new technology. He and his advisors felt that the printing press
would too easily allow information and new ideas to spread across his empire. Ottoman Empire
was determined to keep the people oppressed. And they believed this would threaten their control
and offend the religious establishment. Even today the muslins believe this. So not only
did Bayezid ban the printing press, he imposed the death penalty upon anyone caught using one.
The Ottoman Empire remained so closed off to new ideas, in fact, that the only western
book to be imported and translated for the next 3 centuries was a medical text on the treatment
of syphilis. Needless to say the Ottoman Empire did not remain the world’s dominant
superpower for long. It was during this period that Europe underwent radical growth.
Just a few centuries before, most of Europe was nothing more than a plague-infested backwater
of irrelevant kingdoms. But by the mid-1600s, Europe had surged ahead, in part due to the
rapid spread of knowledge made possible by the printing press. It was the Internet of its time.
And scientists like Isaac Newton would never have been able to 'stand on the shoulders of giants’
had it not been for that disruptive, revolutionary technology. Western civilization as a
whole owes much of its prosperity to the printing press, which enabled the sharing of information
and ideas. And the example shows how embracing new technology can make an enormous
difference in the development of a society. Today most western governments probably still feel
that they are embracers of technology who encourage innovation. Today most western governments
probably still feel that they are embracers of technology who encourage innovation.
But this is nothing more than a crude fantasy, especially when it comes to one of the most
disruptive technologies of our modern time: CRYPTOCURRENCY.
Cryptocurrency is today’s printing press -- a truly game-changing technology that the ruling
elite sees as a threat to their control.This is why there have been so many ridiculous rules and
tax policies that disincentivize cryptocurrency ownership -- the technology is too disruptive.
Banks have enjoyed unparalleled power and influence for eight centuries, going all the way back
to the Medici rule in the early Italian renaissance. Bankers controlled the money, and were
consequently able to control governments, laws, and even wars. In the fight against Napoleon in
the early 1800s, for example, the fate of the British war effort was not in the hands of the
generals and admirals, but in the hands of the Rothschild banking family that financed them.
In the early 1900s, it was JP Morgan who engineered a revolution in Panama and imposed a puppet
government so that his bank could finance the lucrative canal project. And just a decade
ago the heads of the top Wall Street banks cajoled the entire U.S. government into a trillion-dollar
taxpayer-funded bailout. The only reason banks enjoy such immense power is because they
CONTROL THE MONEY.
But if you think about it, banks are nothing more
than middlemen, taking money from depositors and loaning it out to borrowers. In fact the old
joke in banking was the famous 3-6-3 rule:
pay 3% on deposits, loan money at 6%, be on the golf course by 3pm.
Cryptocurrency disrupts this absurd middleman monopoly.
Think about it: when you send money to someone, those funds move from your bank,
to the central bank, to another bank, and then finally to the recipient’s account. This is the same way
that money used to be transferred 800 years ago, which seems almost tragically anachronistic given
that we have apps today to send funds directly to a recipient’s mobile phone or email address.
Who needs a middleman anymore?
Why should anyone borrow
money from a bank when there are so many Peer-to-Peer and crowdfunding platforms available?
Why pay exorbitant fees and commissions to exchange currency when
there numerous websites that exchange money at almost no cost?
Banks as financial intermediaries are about as quaint as taxi dispatchers in the age of Uber.
Cryptocurrency and Blockchain technology are the final nails in the coffin. If that seems too
esoteric, consider that your savings is already ‘digital currency.’ Banks don’t keep bricks
of physical cash in their vaults; your bank balance is nothing more than an accounting entry
in your bank’s electronic database. It just happens to be 100% controlled by your bank.
As Jim Rickards reminded me some time ago, most currencies are digital, even the U.S. dollar.
The Federal Reserve’s estimate of U.S. dollar money supply is $12.1 trillion; yet only about 10% of
that is physical cash in circulation. The rest "more than $10 trillion" is simply a series of
entries in banks’ core system databases. The Federal Reserve’s estimate of U.S. dollar money supply
is $12.1 trillion; yet only about 10% of that is physical cash in circulation.
In other words, the money in your savings account isn’t piled up inside your bank’s vault. Far from it.
Your savings doesn’t really exist. It’s all just digits in an electronic account ledger. And yet we
transact with these digital currency units all the time. Whenever you use a credit card or send a
bank transfer, you’re using the digital form of your currency. This means that the ‘money’ in your
savings account isn’t really yours.You don’t actually have any savings. What you really have is a
claim on your bank’s savings. Your account is just an entry in the liability column of their digital ledger.
When you make a deposit, you’re trading your money for a banker’s promise to repay you. And there
are countless regulations giving them the authority to break that promise.
(If you want to test this premise, try withdrawing $25,000 just to see how your bank reacts).
Moreover, banks can gamble your savings away on some idiotic investment fad, charge you ridiculous
fees without your consent, and even freeze you out of your own account (‘for your own security’).
THIS MAY HAPPEN AT ANY TIME. BEWARE OF THE BANKS AND OTHER FINANCIAL INSTITUTIONS CLOSING.
That’s the system that controls your wealth today. It’s almost entirely digital. And it’s run by
unelected bureaucrats whose interests are not aligned with your own. This is not a free system. And any
rational person should consider parking at least a rainy day fund outside of this system.
Bitcoin is certainly one option. No one controls it, which is a novel concept in an era when governments and
central banks control everything from the value of your savings to what you can/cannot put in your own body.
Cryptocurrency de-centralizes this system. You become your own banker. No more
middleman. Cryptocurrency is about divorcing yourself from an anachronistic financial system that
has never missed an opportunity to abuse you. And that makes it worth understanding.
This is especially true if you’re naturally skeptical of the idea or have already passed judgment
on Bitcoin as a ‘scam’ without having learned about it first. Cryptocurrency is the future of finance.
And just as embracing new technology can be prosperous for societies, it can also be extremely
prosperous for individuals. Back in 2010, for example, the very first ‘real world’ Bitcoin transaction
was conducted: 10,000 bitcoins, then worth about $30, traded for two Papa John’s pizzas. Today that transaction
would be worth some $23 million. MOST MISSED THIS. QUESTION: will you
continue to miss this like those of the Ottoman society?
While those types of gains may never be repeated, lesser-known cryptocurrencies are being developed
that could very well make early investors fortunes in the years ahead. There’s plenty of risk
and the ride won’t be smooth, but you’ll never turn $30 into $23 million by playing it safe.
for The Daily Reckoning
Editorial note: If you feel like you’ve missed out on Bitcoin, we have good news
There’s a whole new crop of cryptocurrencies coming out that could give everyday investors the
opportunity to make fortunes in this exciting new market. When we get your request from the form, we’ll show you
how you can participate in these opportunities for potentially life-changing gains, so stay tuned.
This could be one of the few ways everyday investors can legally get rich in a hurry in today’s market.
Simon Black an international investor, entrepreneur, permanent traveler
and self-described free man. Off the top of his head, Simon can cite
the price of beachfront property in Croatia, where to bank in Dubai, the best place to store gold in
Singapore, which cities in Mexico are the safest, which hospitals in Asia are the most cost-effective
and how to find condo foreclosure listings in Panama. He specializes in teaching people how to embrace financial
and lifestyle opportunities across the globe.
Congress; Regular Americans Getting Filthy Rich, Thanks to the Idiots in Congress... A few everyday Americans
are making a fortune... thanks to those morons in Washington. This might be Congress’
dumbest move yet
Oh, and thanks to President Trump and his methods of draining the swamp. Oh boy.
More information on bitcoin mining, click below.