Bitcoins are a Bitter Reality of New Economic World

If you’re not sure the meaning of Bitcoin is, you can do some digging online, and you’ll find many… But the basic idea can be summarized as follows: Bitcoin was invented to be a means for exchange, and without a central bank or a bank of issue. In addition, Bitcoin transactions are supposed to be completely private, and is, it’s anonymous. Perhaps most importantly, Bitcoins are not real in existence. They exist in computer software, and are an example in virtual reality.

The idea behind it is that bitcoins can be mined ‘… fascinating word in this case… through the use of an increasingly complicated mathematical equation which becomes more complicated as more Bitcoins are mined into existence fascinating – using the computer. After the Bitcoin is created, the Bitcoin is placed into an electronic “wallet”. It’s then possible to trade actual goods or Fiat currency in exchange for Bitcoins… as well reverse. In addition, because Bitcoins are not issued by a central issuer for Bitcoins the Bitcoins are extremely distributed and therefore in opposition to being controlled by a central authority.

Naturally, the advocates of Bitcoin and those who profit from the rise of Bitcoin are loudly claiming that “for certain, Bitcoin is money’ ‘… but not just that, but also ‘it’s the most secure money in history it is the future’s money and so on… But the supporters of Fiat proclaim the same thing, about the paper-based currency as a form of money… but we know for certain that Fiat paper isn’t a real anything like money because it does not possess the essential characteristics of actual money. So, the question is whether Bitcoin even count as money… or is it even worth it being the currency of the future or the greatest money to ever exist.

The true essence of coins is given as

For more information, we’ll take a look at the traits that define money and then see whether Bitcoin is eligible to be considered. The three main characteristics of money are:

1.) money is a reliable store of value. This is the most important attribute since without stability in value, the role of the numeraire, which is a measurement of value, will fail.

2.) The money represents the numeraire, which is the unit of account.

3.) Money is a means for change… however, other things also perform this role, such as direct barter, the netting out’ of exchanged goods. Additionally, there are trade goods (chits) which hold some value indefinitely; and lastly, the swap of mutual credit by netting worth of commitments that are fulfilled through the exchange of bills or IOU’s.

In comparison with Fiat, Bitcoin does not fare too well in terms of exchange. Fiat can only be used within the region of the issuer. The dollar is not accepted in Europe and so on. Bitcoin is widely accepted. However there are a few stores that currently accept payments in Bitcoin. If the acceptance does not increase in a geometric way, Fiat wins… but at the expense of exchange rates between nations.

The first requirement is much more difficult and requires an asset that is stable… Today, Bitcoins have grown from having a value of $3.00 to around $1,000 within a matter of a few years. That’s about far from being a stable store of value’ as possible! In fact, these gains are the perfect illustration of a speculation-driven market… similar to Dutch bulbs for tulips, junior mining companies or Nortel stocks.

Naturally, Fiat does not work in this regard either. As an example for instance, the US Dollar, the ‘main’ Fiat, has lost more than 90 percent of its value within just a few decades… Fiat nor Bitcoin can be considered to be the most fundamental measurement of money, the ability to hold value and keep value over time. The real currency, which is Gold has demonstrated the capacity to store value, not only over centuries, but long periods of time. Both Fiat or Bitcoin have this capability… each are ineffective as money.

Then, we get to the next attribute, that of being a numeraire. This is a fascinating aspect and it is possible to understand the reason why both Bitcoin as well as Fiat are not considered money by examining the issue of the “numeraire’. Numeraire refers to the usage of money not just to keep value in a bank, but also to as a matter of fact measure or even compare value. It is believed that in Austrian economics, it’s believed that it is impossible to measure value, since value is only a part of our consciousness… And what can something that is conscious actually be assessed? But, with the concept of Mengerian market action, which is an interaction between bid and offer the market price can easily be determined… however it’s only for a brief period… as the price of market is defined in terms of numeraire, the best-selling product, which is money.

How can we establish the worth that is Fiat… ? With the notion of purchasing power’ ‘… which means that Fiat’s value Fiat can be measured by the value it is able to be traded in exchange for… in a so known as a ‘basket of goods’. This clearly indicates that Fiat does not have value on itself, but value comes from the worth of the services and goods that it is able to trade for. The cause of causality flows from the item bought into that Fiat number. In the end, what difference does it make between a single dollar bill and a 100 Dollar bill, other than the number that is printed across the bill… in addition to the power to purchase that number?

Gold however isn’t quantified by what it trades for. Instead specifically it is measured according to another standard of measurement; its mass, or weight. A gram of gold is an ounce of gold and an ounce can be described as an ounce… regardless of what number is written upon its exterior, its ‘face value’ or not. Causality is a different concept to Fiat and Gold is measured in weight and intrinsic value… and not through purchasing power. Have you got an idea about the worth of one dollar? There is no such thing. Fiat is measured by an ephemeral number… that number on the label”face value”.

Bitcoin is further away from being a numeraire, it is not just a number, just like Fiat… however it’s value can be measured using Fiat! Even the event that Bitcoin becomes accepted globally as a means of exchange or even succeeds in replacing the Dollar as a “numeraire”, it will not have an inherent measurement like Gold does. Gold is the only gold that is defined by a genuine permanent physical measurement. Gold is unique in its ability to store value for many years. There is nothing else that mankind has this special combination of properties.

In conclusion, even though Bitcoin offers certain advantages over Fiat in terms of privacy and decentralization falls short in its claims to be money. However, its advantages aren’t as clear The intention of the plan is to restrict “mining of Bitcoins to a maximum of 26,000,000 units, that is, the mining algorithm becomes more difficult and more difficult to resolve, eventually becoming impossible once the 26 million Bitcoins have been extracted. This announcement may possibly be the final blow to Bitcoin and Bitcoins. Already, some central banks have stated that Bitcoins might be converted into a reserveable currency.

Wow, that’s an important move in the direction of Bitcoin isn’t it? The ‘big banks’ appear to be acknowledging the real value of Bitcoin in the first place, don’t you think? What it means is that banks realize that they are able to exchange Fiat to Bitcoins… as well. To actually purchase all the 26, million Bitcoins scheduled could cost only 26 billion Fiat Dollars. Twenty-six billion dollars isn’t even a small amount for Fiat printers. It is approximately a week’s worth printing done by the US Fed all by itself. After all, when the Bitcoins are bought up and were stored in the Fed’s “wallet ‘… what purpose can they be used for?

There wouldn’t be Bitcoins remaining in circulation; the perfect corner. If there aren’t Bitcoins available How do you think on Earth can they be used to exchange money? What could the owners of Bitcoin be able to do to protect against this fate? Make the algorithm more flexible and boost the number of subscribers from number of users from 26 to… 53 million? to 104 million? Are you ready to join to the Fiat march of printing? Then, according to the theory of quantity, Bitcoin would start to decrease in value, the same way that Fiat is believed to lose value due to “over-printing” ‘…

This is the most crucial question: why do we search for a “new currency” in the first place when you already own the top money, Gold? The fear that Gold confiscation? Uncertainty from an intrusive state? Taxation that is brusque? Fiat money legal tender laws? Everything above. The answer lies not in a brand new kind that is based on money but instead in an entirely new social system, one that is free of Fiat and without Government surveillance, with no drones and SWAT groups… and without IRS border guards, IRS TSA terrorists… the list goes on. A world that is free from the rule of law. After this is done, Gold will resume its historic and essential function as a trustworthy money… as well it will not be a minute before.

Rudy J. Fritsch was born in Hungary in 1947. He left Socialist oppression in the Hungarian Revolution of 1956. His family has lived through WWII and the subsequent Hungarian hyperinflation. Therefore, the Fritsch family has a deep understanding of the financial ruin.

Engineer and businessman, He ran a profitable family company in Canada for decades, and at its height, employing more than 100 workersuntil the economic instability destroyed the viability for North American manufacturing. The company was forced out He decided to study the field of economics… for the purpose of find the root of the miserable situation.