If you do not know what Bitcoin is, then Do a little bit of research online, and you will get lots… but the short Story is that Bitcoin was created as a medium of trade, without a central bank Or bank of issue being involved. Furthermore, Bitcoin transactions are assumed To be personal, that is anonymous. Most significantly, Bitcoins Don’t Have Any real World presence; they exist only in computer software, as a sort of virtual reality.
The general idea is that Bitcoins ‘ are ‘mined’… interesting term here… by solving an increasingly hard mathematical formula -more difficult as more Bitcoins are ‘mined’ into existence; yet again interesting- on a computer. Once created, the new Bitcoin is set into an electronic ‘wallet’. It is then feasible to exchange real goods or Fiat money for Bitcoins… and vice versa. Additionally, as there is no central issuer of Bitcoins, it is all highly dispersed, thus resistant to being ‘handled’ by authority.
Naturally proponents of Bitcoin, Those who profit from the growth of Bitcoin, insist fairly loud that ‘for sure, Bitcoin is money’… and not just that, but ‘it’s the best money , the cash of the future’, etc.. . Well, the proponents of all Fiat shout just as loudly that paper money is cash… and we all know that Fiat newspaper is not money by any means, as it lacks the most important attributes of real cash. The issue then is does Bitcoin even qualify as money… not mind that it being the money of the future, or the best money ever. We are providing you solid pieces of info here, but do be aware that some are more important to understanding Bitcoin Revolution app.
But that can vary a bit, and it really just will depend on how you want to use the information. We really are just getting going here, and hopefully you will be thrilled about what more is in store. Continue reading to discover even more, and what we will do is include a few more important topics and recommendations for you to consider. It is all about offering information that builds on itself, and we think you will value that.
Compared to Fiat, Bitcoin doesn’t Do too badly as a medium of trade. Fiat is only accepted in the geographical domain of its issuer. Dollars aren’t any great in Europe etc.. Bitcoin is approved internationally. On the flip side, not many retailers now accept payment in Bitcoin. Unless the approval grows , Fiat wins… although at the cost of trade between nations.
The first condition is that a great deal Tougher; cash has to be a stable store of value… today Bitcoins have gone out of a ‘value’ of $3.00 to about $1,000, in just a few decades. This is about as far away from being a ‘stable store of value’; as you can get! Indeed, such gains are a perfect example of a speculative boom… such as Dutch tulip bulbs, or junior mining companies, or Nortel stocks.
Of course, Fiat fails as well; For instance, the US Dollar, the ‘primary’ Fiat, has lost over 95% of its value in a few decades… neither fiat nor Bitcoin qualify in the most important measure of money; the capacity to store value and preserve value through time. Real money, that is Gold, has shown the capacity to maintain value not just for centuries, but for eons. Neither Fiat nor Bitcoin has this critical capacity… both fail as cash.
Finally, we return to the next Attribute; that of being the numeraire. Now this is really interesting, and we can see why both Bitcoin and Fiat neglect as money, by looking closely at the question of their ‘numeraire’. Numeraire refers to the usage of cash to not just store value, but to at a sense measure, or compare worth. In Austrian economics, it is considered impossible to really measure value; after all, significance resides just in human comprehension… and how can anything in consciousness actually be quantified? But through the principle of Mengerian market action, that is interaction between offer and bid, market prices can be established… if just momentarily… and this market price is expressed in terms of the numeraire, the most marketable good, that’s money.
So how do we establish the worth of Fiat… ? Through the concept of ‘buying power’… which is, the worth of Fiat depends upon what it can be traded for… a so called ‘basket of goods’. However, his clearly implies that Fiat has no value of its own, but instead appreciate flows from the value of their goods and services it may be exchanged for. Causality flows from the merchandise ‘purchased’ to the Fiat number. After all, what difference is there between a 1 Dollar bill and a trillion Dollar bill, except the amount printed on it… along with the purchasing power of the number?
Gold, on the other hand, isn’t Quantified by what it deals for; instead, uniquely, it’s quantified by another physical benchmark; from its own weight, or mass. A gram of Gold is a gram of gold, and an ounce of Gold is an ounce of Gold… no matter what amount is engraved on its surface, ‘face value’ or otherwise. Causality is the contrary to that of Fiat; Gold is measured by weight, an intrinsic quality… not by buying electricity. Now, have you any idea of the value of an ounce of Dollars? No anything. Fiat is just ‘measured’ by an ephemeral quantity… the number printed on it, the ‘face value’.