Bitcoin is making the news. It is a virtual currency that mimics state currencies. And I use the word currency in its loosest sense.
With numerous financial companies already exchanging bitcoins into any of the world’s currencies, the founder of the Swedish Pirate Party, Rick Falkvinge, estimated that Bitcoin could capture between 1 and 10 percent of the global foreign exchange market. This implies that the price of each and every bitcoin would rise to between $100,000 and $1 million, Max Keiser explained.
Detailed, considerable debate runs on over bitcoins, but it has its true believers who see it as a threat to state control of currency, and an alternative to the predation and confiscation of the people's money by the state.
Issuance of the currency is completely automated, with 25 new bitcoins generated every 10 minutes; inflation is set to be halved every four years, until a total of 21 million bitcoins is reached. In theory, the currency would not lose its purchasing power unless individuals and businesses refused to use bitcoins.
And that is probably lesson number one, these are no revolutionaries who want to change the system, they merely want to run the system. They have built-in inflation?
In essence Bitcoins is an opportunity for all-growed-up people to participate in an elaborate online video game.
Virtual economies are observed in MUDs and massively multi player online role-playing games (MMORPGs). The largest virtual economies are currently found in MMORPGs. Virtual economies also exist in life simulation games which may have taken the most radical steps toward linking a virtual economy with the real world.
You can visit the Bitcoins website, and read up on the topic, but you very well may come away confused. There are a couple of themes. 1. Bitcoins is good because it is outside of government oversite. 1. Bitcoins is bad because it is outside of government oversite. Both premises are grounded in a presumption that bitcoins have some economic benefit commensurate with other currencies. People take it very seriously, but it is only an online video game. What si the game?
When ancient cities are excavated, it is not pots of gold they find everywhere, but tallies. Elaborate systems of keeping track of who owns what. With bitcoins, you can tally up what people owe you virtually. And like the warcraft video games, you can buy and sell digital images of really cool things, and pay for them with real money. Even though the thing you own is only an image.
But in Warcraft you have an actual image of something you can use in a game. Bitcoin users require no such utility, it is the mere idea that they have something in a bank that is enough for them. Like a Cypriot bank depositor.
It is said that the founders of Bitcoin have "moved on" and it is now self-perpetuating. No doubt the people who designed it know its limitations well, and having seen all possible play out, are now bored.
It's not a ponzi scheme, it's not a scam, it's not a viable alternative to state malfeasance, it is just an online game like so many others. Like all online games, it appeals to certain people, but not all.
In any event, it won't serve in international trade.
***John Spiers will be offering an all-day seminar on small business international trade start up at Orange Coast College, Los Angeles Area, June 29, 2013. Full info here...***
Feel free to forward this by email to three of your friends.
With numerous financial companies already exchanging bitcoins into any of the world’s currencies, the founder of the Swedish Pirate Party, Rick Falkvinge, estimated that Bitcoin could capture between 1 and 10 percent of the global foreign exchange market. This implies that the price of each and every bitcoin would rise to between $100,000 and $1 million, Max Keiser explained.
Detailed, considerable debate runs on over bitcoins, but it has its true believers who see it as a threat to state control of currency, and an alternative to the predation and confiscation of the people's money by the state.
Issuance of the currency is completely automated, with 25 new bitcoins generated every 10 minutes; inflation is set to be halved every four years, until a total of 21 million bitcoins is reached. In theory, the currency would not lose its purchasing power unless individuals and businesses refused to use bitcoins.
And that is probably lesson number one, these are no revolutionaries who want to change the system, they merely want to run the system. They have built-in inflation?
In essence Bitcoins is an opportunity for all-growed-up people to participate in an elaborate online video game.
Virtual economies are observed in MUDs and massively multi player online role-playing games (MMORPGs). The largest virtual economies are currently found in MMORPGs. Virtual economies also exist in life simulation games which may have taken the most radical steps toward linking a virtual economy with the real world.
You can visit the Bitcoins website, and read up on the topic, but you very well may come away confused. There are a couple of themes. 1. Bitcoins is good because it is outside of government oversite. 1. Bitcoins is bad because it is outside of government oversite. Both premises are grounded in a presumption that bitcoins have some economic benefit commensurate with other currencies. People take it very seriously, but it is only an online video game. What si the game?
When ancient cities are excavated, it is not pots of gold they find everywhere, but tallies. Elaborate systems of keeping track of who owns what. With bitcoins, you can tally up what people owe you virtually. And like the warcraft video games, you can buy and sell digital images of really cool things, and pay for them with real money. Even though the thing you own is only an image.
But in Warcraft you have an actual image of something you can use in a game. Bitcoin users require no such utility, it is the mere idea that they have something in a bank that is enough for them. Like a Cypriot bank depositor.
It is said that the founders of Bitcoin have "moved on" and it is now self-perpetuating. No doubt the people who designed it know its limitations well, and having seen all possible play out, are now bored.
It's not a ponzi scheme, it's not a scam, it's not a viable alternative to state malfeasance, it is just an online game like so many others. Like all online games, it appeals to certain people, but not all.
In any event, it won't serve in international trade.
***John Spiers will be offering an all-day seminar on small business international trade start up at Orange Coast College, Los Angeles Area, June 29, 2013. Full info here...***
Feel free to forward this by email to three of your friends.
5 comments:
And the vast majority of USD is just video game money with no physical representation issued as entries in databases by the Federal Reserve.
And the difference is?
Hmmm... lemme see.... Bitcoins is a nonstarter, and the USD is unsustainable... so the big advantage is for the time being you can use the USD to shop at Safeway.
When that is not longer the case, if for no other reason that one has no USD to take to Safeway for a Cypress-style state intervention in USA, we had better have among ourselves the timeless systems for tallying vendor financing.
Otherwise we'll go hungry, like Cypriots, or at least sick of goat for dinner, again
In as much as financial systems are built on confidence its not that big of a difference compared to other currencies. Ask George Soros and he will tell you.
/Jacob
I also bought land on the moon when I was in my teens and made a decent profit on it when I sold :)
/Jacob
R.I.P., Bitcoin. It’s time to move on:
https://www.washingtonpost.com/news/innovations/wp/2016/01/19/r-i-p-bitcoin-its-time-to-move-on/
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