"Permit me to issue and control the money of a nation, and I care not who makes its laws." - Mayer Amschel Rothschild
"If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” - Thomas JeffersonSadly, if you've heard of the term Fractional Reserve Banking you would know that what Thomas Jefferson is speaking of is exactly what we have done in the good 'ol USA (and around the world). Because of this, banks literally create their own money, which is why they are commonly believed to be the most corrupt institutions in the world.
We finally have a solution.
The solution is decentralized, peer to peer currencies, commonly referred to as Crypto-Currencies. The first major currency to break open this Pandora's box is called Bitcoin. Here's a short, simple video to give you a brief explanation of how it works.
First, let's explore the idea more deeply. This is a peer to peer currency, which means you don't have to go through any bank for any transaction. Not only do you get to avoid lining the pockets of banks by their charging of huge fees, but it actually costs less to do business which saves you money.
Being that this currency is relatively anonymous makes it hard to track and regulate. You might think that the government would then want to shut it down as they can't control it. This would also be its biggest hurdle to mainstream acceptance. On Monday, November 18th, 2013 the senate convened for hearings on Bitcoin. It turns out that they actually found it to be a legitimate currency. Via the Wall Street Journal
"The hearing provided a financial lift to bitcoin as U.S. officials, who have previously highlighted the currency's role in money laundering and other illicit activities, called it a "legitimate" financial service."Ironically, even if the government wanted to shut down Bitcoin, they couldn't! Bitcoin traffic on the Internet looks exactly the same as normal traffic. The only way to shut down Bitcoin is to shut down the Internet. Since shutting down the Internet is not only impossible, but would bring our current money and economy to a halt, they can't do that either.
Simplifying things, how it works to validate each transaction and keep it decentralized is every single transaction that is done in Bitcoin gets validated not by a central authority such as a bank which is used for most standard fiat currencies like the Dollar, Euro, Yen, etc. but by the users (technically miners) themselves. Due to this distributed, decentralized nature it actually avoids fraud and general manipulation in the system.
This means that every single Bitcoin wallet that exists has a record of every single transaction that has occurred, ever.
This brings me to the biggest argument against Bitcoin. Many people, and mostly people that have power and stand to lose it, will say that due to its relative anonymity it will mostly be used for criminal activity. Because of the fact above, it actually makes money laundering and large scale theft practically impossible because anyone in the world with a wallet could view the transactions and prove the theft fairly easily. Because of this the usual fiat currencies still see criminal activity far in excess of any crypto-currency, including Bitcoin.
Now for every one's favorite thing to talk about regarding Bitcoin, how you get rich. As an example, I heard of this currency in 2009 and after doing some digging I thought I would invest a couple dollars. I didn't do it because I thought I would get rich. I did it because I saw the value in the concept. I ended up buying 5 coins at $5 each. As of this posting it is bouncing between $950 and $1,050. What a good investment! Many might think this is at or near a top in the price. Sure, a thousand dollars is a lot to get in, but you can also buy as small a fraction of Bitcoin as you like. Invest $10 if you want. I think we are still in the early phase of the currency's acceptance and the value will continue to increase as Bitcoins become more widely accepted.
All of the major barriers against its acceptance have dropped. The US government thinks it is a legitimate currency, as do many other governments worldwide. It has already seen a pump and dump attempt from about mid-March 2013 through mid-April 2013. The price was bid up from about $35 to about $225 and then dumped. However, Bitcoin survived and since it enjoys much more widespread acceptance now, it has proven that it is immune from this type of attempt to kill it.
Suppose Bitcoin does achieve worldwide acceptance as a currency. What then would be the proper exchange rate between the US Dollar and the Bitcoin? This is done with simple math. Using today's supply figures (which doesn't include massive dollar printing in the future) we can come up with some pretty easy numbers. According to the most accurate money supply figures available for US Dollars (via Shadowstats.com) the M3 index has about 16 Trillion Dollars in existence. The current count of Bitcoins in existence as of this writing is 12,104,975 (according to Block explorer, which is exact). This doesn't take into account lost Bitcoins and on the dollar side, these numbers definitely don't take into account the secret loans from the fed previously mentioned (totaling another $16 Trillion Dollars).
Using the official numbers as of this writing (16,000,000,000,000/12,104,975) each Bitcoin will be worth $1,321,770.59!!!!!
In conclusion, are you looking for a way to take back your power from corrupt institutions, avoid big brother, save money, and get rich in the process?
You have your answer.
UPDATE: Now Overstock.com is planning to accept Bitcoins by the second half of 2014.
