For years Jason Hartman has been warning of the instability of government-controlled “fiat currency.” As a quick review, a fiat currency – like the American dollar – only has value because the government says it does and we still have enough faith and trust to believe it. Ever since the Nixon administration took the United States off the gold standard in the early ‘70s, there has been no “treasure trove” of gold to back up what are essentially bits of colored paper.
Enter the Bitcoin, the Digital Age’s answer to fiat currency. Bitcoins are digitized currency units that can be exchanged for real world goods and services by any vendor who chooses to it a medium of exchange. Best of all, Bitcoin technology operates using the same peer-to-peer networks that have put the Internet beyond the control of government. Like many user-driven projects that have come before, the Bitcoin software operates under an open source license, which allows for continual improvement and upgrade by the global community.
From the Bitcoin.org website is a quick description of how it all works.
As a new user, you only need to choose a wallet that you will install on your computer or on your mobile phone. Once you have your wallet installed, it will generate your first Bitcoin address and you can create more whenever you need one. You can disclose one of your Bitcoin addresses to your friends so that they can pay you or vice versa, you can pay your friends if they give you their addresses. In fact, this is pretty similar to how email works. So all that is left to do at this point is to get some bitcoins and to keep them safe. In order to start using Bitcoin, you are not required to understand the technical details.
We don’t expect the world to flock to Bitcoins en masse but financially unstable areas like certain parts of Africa and South America have become regular users, and who can blame them? When your economy lies in tatters or is gripped in tight-fisted control of a dictator, a Bitcoin account allows regular citizens to conduct business on their own terms, outside of government control.
Mr. Obama, are you listening? Bitcoins and other technology are a natural result of foolhardy government policies that include currencies devalued from reckless money printing and “too big to fail” style bailouts of financially struggling institutions. When the system fails, people will invent their own system.
Welcome to the future of commerce. (Top image: Flickr | TraderTim)
The Holistic Survival Team