Bitcoin has been all the rage lately. The stuff, or lack thereof, runs on peer-to-peer technology, is fully decentralized, has no patents, and is open source. Currently, there are almost 11 million bitcoin units in existence and the maximum amount of bitcoin units that will ever be created by the logic of its design are 21 million. For more details on how they work, see the recent Mises Daily “The Money-Ness of Bitcoins” by economist Nikolay Gertchev.
The Issue
While bitcoins are designed so that they cannot be hyperinflated in name, they certainly can be hyperinflated in substance. Already, there are numerous knockoffs such as litecoin, namecoin, and freicoin in place. This is a particularly valid point because bitcoin is a starfish, i.e., it is fully decentralized. As stated by Ori Brafman and Rod A. Beckstrom, …..To Read More…..
My Take - I have been reading about this for over a week and I will be the first to state....I don't have a clue! However, it does seem to me to be somewhat similar to what Chiang Kai-shek did just before his nationalist government collapsed. He had everyone turn in all the old currency, precious metal and jewels, etc. and issued new money with the guarantee that they wouldn't print any money beyond the worth of these valuables. He lied. They kept doing exactly what they had been doing, the middle class was destroyed, his government collapsed, the communists took over and he and his gang of thieves fed to Formosa, which is now Taiwan, with all that loot. Maybe I’m wrong since I really don’t understand this bitcoin stuff, but that is how it seems to me, and historically when things start to collapse those in power attempt to find a way to take care of themselves and their corrupt friends. Maybe I’m wrong so I would like to follow this and I think everyone else should also.
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