Why are People, Businesses, and Countries Adopting Bitcoin?
By Greg Mathers
October 31, 2017
Many people are now realizing the debt of their respective countries is not sustainable. They are looking at the options their countries have, and what rules the powers that shouldn’t be (TPTSB) would impose, because of previously bad decisions they (TPTSB) have made. Most countries have only two options, print more money to pay their debts, or default on their debts.
The first is really a slower version of the second since when a country prints more money and then they pay their creditors with that currency it has the effect of making the currency worth less. That is to say any time you have an abundance of an item it’s value tends to be less than a similar item that is scarce. That is called “monetizing the debt” and has the effect of devaluing the currency for everyone that is using that currency (which is also called inflation). It is really a way a country can tax their citizens without most of them realizing what is happening.
The second option is for a country to default on their debt obligations. This causes immediate devaluation of the currency since the country issuing it is no longer trustworthy. In either case the individual stuck in the country that has to purchase food, clothing, power, and shelter must do so with a currency that buys less today than it did yesterday. That is where gold, silver, other currencies, and Bitcoin comes in.
For thousands of years gold and silver have been considered safe havens store of wealth. When the currency of a country became worthless people with gold and silver could revert to using that for trade. Since only a certain amount was in circulation the value of these precious metals did not depreciate with respect to the goods they could purchase. Lately however TPTSB have found a way to break the idea that gold and silver are safe havens store of wealth. They have done this by tying gold and silver to “paper pretend gold and silver”, ETF’s (exchange traded funds), and by doing naked “short sells”.
Some estimate there is over 100 times the obligations to repay holders of the paper in precious metals than the amount of metals that exist. Consequently the value of precious metals is determined by the paper products, ETF’s etc, instead of the other way around. It’s really the tail wagging the dog. If enough people demand real gold and silver instead of the paper “equivalent” the price of these metals would adjust to a more reasonable and much higher value. Today however people are getting disenchanted with the precious metals because of the tremendous amount of manipulation.
The US dollar being the world currency has been considered another safe haven storage of wealth for many people around the world. However lately the US dollar has been having it’s own problems. The US government today is the largest debtor nation that has ever existed. Looking at the Debt Clock we can see the US is 20 Trillion dollars in debt or 62 Thousand dollars per every man woman and child in the US. The GDP (gross domestic product) is only 19 Trillion dollars so our government is being subsidized with new money printed by the Federal Reserve and “lent” to the government. They call this Quantitative Easing.
At one time many counties and individuals were also lending to the US since the dollar has been considered the world currency and purchasing oil and other commodities from other countries required it. Lately however these countries and individuals are becoming tired of being repayed with dollars worth less than when they lent them; these countries are trying to find another solution. One solution is using another currency other than the US dollar to trade in. When this idea of not using the US dollar becomes widely adopted the dollar will no longer be the world currency and it’s value will drop tremendously. What the world needs is a safe haven store of wealth that has a fixed quantity and can not be abused by TPTSB.
In comes Bitcoin to the rescue. The properties of Bitcoin make it acceptable as both a safe haven store of wealth and a unit of trade. Let us look at Bitcoin a little closer to see why this is so:
- Limited supply.
Sea shells were once used as money. They could not be used by people close to a beach, but were used by civilizations that lived inland and on mountains. So one of the main requirements for a good currency is limited supply. Only 21 million Bitcoins can ever be produced. This is a property governed not by legislation at the whim of a congress, president, dictator, or king, but by mathematics. The quantity of Bitcoins is set to increase to 21 million to be reached around the year 2141.
- Ability to secure it.
Bitcoin is called a Cryptocurrency because it is secured by a very large cryptographic number called a private key. It is a key which only the owner knows and the funds (Bitcoins) can not be spent without that knowledge. No one can take those funds from you without knowing the large private key. Since the Bitcoins are “stored” on a “Blockchain”, (i.e. Information about all the Bitcoins stored on computers all over the world), no one can delete your Bitcoins.
- Ability to transfer them.
Since Bitcoins are really digital information stored on computers all over the world, in order to send some to another party all you need is a public “receive” key that someone has sent you. You then assign some of your Bitcoins, or part a Bitcoin to this address and then they can use those funds. No one can intercept those funds unless they have access to the private key that only the receiver knows.
- Ability to carry them.
To carry them across borders you do not need to take anything physical but you do need to remember a very long sequence of numbers.
- Other people need to be willing to accept them.
When Bitcoin first started they were basically worthless because no one thought they had value or accepted them, and very few people even knew what they were. As time progressed people started seeing the value of having a secure distributed network governed by mathematics holding their wealth instead of an institution that can lose or steal it. Today as I write this Bitcoins are valued at $6350. There are many places you can use Bitcoins to purchase real goods. You do not need to send a check and you do not need to use a third party (bank) to send “money” to another party to purchase these goods. The acceptance of Bitcoin is proceeding ever more rapidly due to the network effect.
[Editor’s note: This is the first of an anticipated series on cryptocurrency by Greg Mathers – be on the lookout for more to come!/sc]
Originally published via R3publican – Why are People, Businesses, and Countries Adopting Bitcoin?