Monday, January 12, 2015

Bitcoin Turns Six

I spotted this article over at Sovereign Man today: 
This may be the most important transaction in the history of finance
 "Six years ago today, Satoshi Nakamoto, the developer and founder of Bitcoin sent ten units of the cryptocurrency to his colleague Hal Finney as a test.
This was the very first bitcoin transaction ever recorded. And it may possibly go down as one of the most important financial transactions in modern history."
What's the big deal about Bitcoin? Simon Black puts it nicely:
"Centralized, un-backed paper currency is one of the worst experiments in the history of finance.
We have awarded total control of our money supply to a tiny elite of unelected bankers that has the power to conjure trillions of units of currency out of thin air in its total discretion.
It has left in its wake an endless trail of busts, panics, recessions, and depressions, not to mention the greatest level of financial inequality that the world has ever seen.
Now– inequality is nothing to gripe about. Equality in and of itself is an absurd ideal.
Human beings are all different. And wherever one person’s skills are more economically valuable, that person will achieve greater wealth.
It’s a simple calculus. Improve the skills to improve the income.
But what this centralized paper monetary system has created is an environment where people rise to the top, not through skill and talent, but by graft and bloodline.
If you were born middle class, you stay middle class. You keep fighting to make ends meet, you keep going into debt, and you keep getting penalized with negative interest rates for saving your money.
And if you were born rich, you stay rich… even if you’re a complete moron.
This is banana republic stuff, brought to you by an absurdly corrupt monetary system.
The idea of Bitcoin changes all of that."
But how does Bitcoin change this stuff?
 "What really makes Bitcoin revolutionary...is its Decentralization.
No one has any control over it. No one can manipulate its supply. No government can destroy it.
And NO ONE can use it as a tool to reward bankrupt governments at the expense of responsible savers.
This is an extraordinarily noble idea: take the power out of the hands of the central banks and let the market decide."
That's why I dabble in it with my tiny cryptocurrency miner. Participating in the growing cryptocurrency market is part of my asset diversification efforts, with this example sharing many similarities to my ownership of precious metals.

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