Regime change in currency - A digital Tsunami will have the same effect on money as what email did for global communication

Bit coin is ushering in a Regime change in Currency
Notes from the discussion between James Turk Gold Money and Felix Moreno de la Cova
Bitcoin can do what email has done for communication or blogs have done for journalists.


There are three eras of money & trust in the history of competitive currencies

1. Commodity based currency - Gold
2. Politically based  currency - USD for last 40 years
3. Math based currency - Bitcoin  2014  going  forward

Central bankers and central bankers cant create anymore bailouts, there is a blackhole on the banks bal sheet , they have been filling this black whole with bailouts.

Banks look like they are solvent but they are not , when they fail  is an overnight event.

Extend and pretend is the banks MO.

All of the money printing in the world is not solving the problem.

Hyper inflation follows the currency horse race.


Austrian school of economics

Regression theorem  - Barter , vlaue , subsitute for value

Value is subjective - Underlying value argument for bitcoin some poeple may value it more highly than other people .


1. Bit coin cant be confiscated
2. Mining gold gets more expensive over time as you have to go deeper   ( mine of primary numbers)  instead of mining into geology your mine into mathematics

People should be prepared for an attack on bit coin.

Bitcoin is now out there now.  Freedom of choice amongst currencies.

Adams smith invisible hand rules.

Confiscation

1. Cyprus took money out of people bank accounts
2. Quantitative easing is confiscation - taking purchasing power away form people that hold those currencies

Bitcoin has some fundamental elements that are not going  to go away

1. Block Chain -  public record ( history of bitcoin)  of all transactions- Decentralised system of stopping people from double spending. This has many other uses and deserves a nobel peace prize in my opinion.
2. Protocol - DNA of bitcoin voluntary like a language people agree to use for payments, could be for other stuff like software, emulates the way that gold became money. Perfect example of emerging order.
3. The client - This is not important and there are many clients now better written.


Tangible Assets

Bit coin is not backed by anything tangible. The only thing that bitcoin is backed by is the demand or trust that people have in the maths.

Tangible nature is the  programming itself has some value even though you cant put it in your hand.

Value is subjective one mans treasure is another mans junk.

A financial asset has counter party risk and there is a someones promise that this currency is going to have value in the future.

People have a hard time seeing bitcoin as a tangible equivalent asset gold

Bitcoin creates artificial  scarcity by limiting the amount of bitcoin can be produced.

Bitcoin has a tangible nature.

How people perceive it.



With Gold you always have to trust the issuer

To shut down bitcoin you would need to shut down the internet.

Note : Huge demand for online cash bitcoin is one of the leading solutions trying to meet that demand. The world needs a currency for the internet.

How do you get people to accept bticoin and take the risks of owning bitcoin?

Bitcoin very volatile relative to other currencies.


Bitcoin currency can move a lot, currently people could save in gold and move the wealth in the bitcoin.

Bitcoin has developed a successful following inspite of Government regulations.



Argentina has blocked paypal , bitcoin still works for argentina.

Bitcoin has not geographic boundaries.


Exchanges ( bitcoin is peer to peer and no exchange is needed)

How does an exchange provider get established an get the market to accept the exchange provider as a trusted intermediary.

Note: Bitcoin can work without exchanges as it is 100% p to p.


Gold is centralised

Bitcoin is decentralised

Money  enables us to communicate value when we interact with one another in society.

Currency does have a history it evolves and changes up to 1694 with the creation of the Bank of England  currency was always a tangible asset after that it become a financial asset with counter party risk and payment risk and all these other issues.

Bit coin is an important step in the evolution of currency.