If you don’t understand what Bitcoin is, then Do a little bit of research on the internet, and you’ll receive lots… but the brief Story is that Bitcoin was created as a medium of exchange, without a central bank Or bank of difficulty being included. Moreover, Bitcoin transactions are assumed To be personal, anonymous. Most interestingly, Bitcoins Don’t Have Any real World existence; they exist only in computer applications, as a kind of virtual reality.
The general idea is that Bitcoins Are ‘mined’… intriguing term here… by solving a difficult mathematical formula -more difficult as more Bitcoins are ‘mined’ into existence; yet again interesting- to a computer. Once established, the new Bitcoin is set into a digital ‘wallet’. It’s then feasible to exchange actual goods or Fiat currency for Bitcoins… and vice versa. Furthermore, since there’s no central issuer of Bitcoins, it is all highly distributed, thus resistant to being ‘managed’ by authority.
Naturally proponents of Bitcoin, Those who benefit from the growth of Bitcoin, insist fairly loudly that ‘for sure, Bitcoin is money’… and not only that, but ‘it’s the best money , the cash of their future’, etc.. . Well, the proponents of Fiat shout as loudly that paper currency is money… and we all know that Fiat paper is not cash by any means, as it lacks the main attributes of real cash. The question then is does Bitcoin even qualify as money… not mind that it being the money of their near future, or the best money . As you can plainly see, what you will discover about Bitcoin Revolution Software is some points are far more significant than others.
But that can vary slightly, and it really just depends on how you want to use the information. But we are not finished, yet, and there is usually much more to be uncovered. We are keeping the best for last, and you will be pleased at what you will find out. We believe you will find them highly pertinent to your overall goals, plus there is even more.
Compared to Fiat, Bitcoin does not Do too badly as a medium of exchange. Fiat is only accepted in the geographical domain of its issuer. Dollars are no good in Europe etc.. Bitcoin is approved internationally. On the flip side, very few retailers now accept payment in Bitcoin. Unless the approval grows geometrically, Fiat wins… although in the cost of exchange between nations.
The first condition is a lot Tougher; cash has to be a stable store of value… today Bitcoins have gone from a ‘value’ of $3.00 to about $1,000, in just a couple decades. This is about as far from being a ‘stable store of value’; since you can buy! Truly, such profits are a perfect illustration of a speculative boom… like Dutch tulip bulbs, or real mining companies, or Nortel stocks.
Naturally, Fiat fails as well; For example, the US Dollar, the ‘main’ Fiat, has lost over 95 percent of its worth in a couple of decades… neither fiat nor Bitcoin qualify in the most crucial measure of money; the capacity to store value and preserve value through time. Real money, which is Gold, has shown the capacity to hold value not just for centuries, but for eons. Neither Fiat nor Bitcoin has this critical capacity… both neglect as cash.
Finally, we come to the second Feature; this of being the numeraire. Now this is really interesting, and we can see why the two Bitcoin and Fiat fail as money, by looking closely at the question of their ‘numeraire’. Numeraire refers to the usage of cash to not only store worth, but to at a sense measure, or compare value. In Austrian economics, it is considered impossible to really quantify value; after all, value resides only in human consciousness… and how can anything else in understanding actually be measured? Nevertheless, 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 is money.
So how do we set the worth of Fiat… ? Through the idea of ‘purchasing power’… which is, the value of Fiat depends upon what it can be exchanged for… a so called ‘basket of goods’. However, his clearly suggests that Fiat has no value of its own, but rather value flows from the worth of their goods and services it may be exchanged for. Causality flows from the merchandise ‘bought’ into the Fiat number. After all, what difference is there between a one Dollar invoice and a trillion Dollar bill, except that the number printed on it… along with the purchasing power of this number?
Gold, on the other hand, isn’t Quantified by what it deals for; rather, uniquely, it’s quantified by another physical benchmark; from its own weight, or mass. A g of Gold is a gram of gold, and an ounce of Gold is an oz of Gold… regardless of 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 inherent quality… maybe not by buying power. Now, have you any notion of the worth of an ounce of Dollars? No such thing. Fiat is just ‘quantified’ with an ephemeral quantity… the amount printed on it, the ‘face value’.