Bitcoin is an experimental, decentralized, digital crypto-currency that enables instant transactions between two parties located anywhere in the world. Bitcoin uses peer-to-peer technology which operates through the Internet. Thus, there is no bank, credit union, or clearing house needed to act as a middle man. Managing transactions and issuing money are carried out collectively by the Bitcoin network. Also, because Bitcoin is only identifiable by a unique personal number, there is no name or social security number attached to it. Therefore, all transactions are anonymous. Because Bitcoin is digital currency, all business is conducted through the Internet. In other words, there are no actual physical coins used.
The value of Bitcoin continues to rise and fall because there are a limited number in circulation as opposed to our current fiat currency which now floods the market due to the notorious Federal Reserve Bank. In 2014, every American should know by now that the Federal Reserve Bank is not part of the United States government at all. It is a privately-owned conglomerate of banks, most of which are foreign and it has complete control over the American economy. Although Bitcoin is still in its infancy stage, it is estimated by experts that it will continue to rise in value as more businesses begin to accept it as currency and more people begin using it. In short, Bitcoin will rise in value, while the U.S. dollar continues to descend in value. It is important to note that because of the infancy of Bitcoin, it is highly volatile, and I would advise investors to only invest an amount that they are comfortable with. The American dollar is now virtually worthless. Economists are predicting it will crash as early as this year.
THE EVOLUTION OF MONEY
Money is simply a means of exchange. In pre-monetary societies, a bartering system was used in the direct exchange of goods and services between people. Barter eventually developed into various forms of commodity money or objects that most people wanted and were willing to exchange for goods and services. As a result, a number of commodities functioned as money, including tobacco and salt.
As money evolved over time, it developed into its most suitable form—gold and silver. These two commodities naturally arose in the marketplace as ideal forms of money because they possessed all of the required attributes—durability, divisibility, convenience, consistency, value, limited supply and wide acceptance. Later, in the evolution of money, people deposited their gold and silver in banks, exchanging it for paper negotiable receipts which were backed by the gold and silver. Over time, bankers noticed that not everyone wanted their gold and silver back at the same time, so they came to the realization that they could make loans in excess of the gold and silver on deposit while earning interest on the loans simultaneously. Thus, “fractional reserve” banking was born. That is to say, banks loan money they do not actually have and charge interest on it, not to mention that Federal Reserve notes or dollar bills are based upon debt. It is because of this “sleight of hand,” debt-based system that the world is in the predicament it is today. “Fiat” currencies, which are backed by nothing and only given value by decree of the government, have been the scourge of the planet. Moreover, historically, they always eventually collapse. For example, the American dollar has been so de-valued due to overproduction and market circulation that it is now worth virtually nothing. According to former World Bank attorney, Karen Hudes, what is known as the BRICS countries (Brazil, Russia, India, China, and South Africa), have rejected the U.S. dollar for use in their trade agreements. Hudes has stated publicly that this represents approximately 25 percent of the world’s economy.
THE ORIGIN OF BITCOIN
The origin of Bitcoin is still quite mysterious. In 2008, Bitcoin was first mentioned in a paper published under the name Satoshi Nakamoto (probably a pseudonym). In 2009, the first open-source client (or wallet software) called Bitcoin-Qt was released and the first Bitcoins were issued. Bitcoins were first produced by a “mining” system. That is to say that once someone’s computer was installed with the software, the computer would work to solve complicated mathematical problems, sometimes lasting for days. Once the problem was solved, a Bitcoin was produced.
THE FUTURE OF BITCOIN
Bitcoin definitely has its advantages. It is a debt-free rather than a debt-based currency and it is rising in value. For example, when Bitcoin first began about 5 years ago, one Bitcoin was worth about $6. Today, one Bitcoin is worth about $500. If you decide to research Bitcoin on the Internet, you will, no doubt, receive a variety of both positive and negative information. Well-known economists like Peter Schiff predict it will soon create a bubble that will eventually burst, thus creating a catastrophe.
MY PERSONAL EXPERIENCE WITH BITCOIN
I am not an economist by any stretch of the imagination, so I’m not qualified to advise anyone as to whether or not he or she should become involved with Bitcoin. However, I can give you what my experience has been thus far. If you are relying on select Internet sites for your news, you are definitely on the right track—the mainstream media is so full of propaganda and outright lies, I no longer trust it to give me accurate information. Therefore, I do not watch television news at all anymore. The best source for information about Bitcoin is the Internet, particularly You Tube.
I first decided to create a Bitcoin wallet to store Bitcoins in January of this year, so I’ve only been involved for about 3 months. If you don’t have $500 to invest in one Bitcoin or are apprehensive about investing that much money right away, you can buy a fraction of a Bitcoin. For example, I started out buying 0.20 of a Bitcoin or 20%. That will cost you about $100. After doing this every other week for about 3 months now, I have almost 2 Bitcoins, now worth nearly $700. When you compare the $700 worth to the approximately $575 I invested, you can see that I gained about $125. While setting up your Bitcoin wallet, you will link it to your checking account and, as an alternative, to one credit card. From your wallet, you may buy Bitcoin, exchange it for U.S. dollars, use it to buy merchandise, etc., all from your wallet. It is very simple to set up a wallet and there are several sites where you can do so and the process is quite simple. The site I use is called Coinbase.
Whether or not Americans know it or simply do not want to believe it, the American dollar is in serious danger of crashing. If it does, not only will it affect the United States, but the whole world will be affected. Having an alternative currency will be useful should a disaster occur and I pray every day that it doesn’t. I would encourage every working person to investigate Bitcoin. Because it is still in its infancy stage and is still experimental, I would hesitate to invest large sums of money in it, but I would definitely save a small, but substantial amount of it, just to have something to fall back on in case of a crisis. If a crisis should occur, the government is the last place I would look to for help. Tomorrow might not be a good time to invest in Bitcoin, but today is.
For more information, I would encourage you to visit You Tube and type “Bitcoin” into the search box. You will encounter a wealth of information. Let’s forget about our differences and join hands the world over. Let’s work to make this a better world for ourselves, our children and future generations.
Be empowered and thrive!