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BitCoin – an interesting technology

September 14, 2014

Originally published October 19, 2013 on CandidateClements.com

http://finance.yahoo.com/blogs/the-exchange/bitcoin-crackdown-could-lead-bitcoin-resurgence-195742673.html

I’ve only recently become aware of Bitcoin. If you’re not familiar with it, it may be something to keep your eye on. It’s an international medium of exchange, another fiat currency (meaning backed by nothing) though it is recognized at a growing number of electronic venues.

As I’ve become more and more interested in learning about money and currencies and other tools for exchange, I’ve become quite disenchanted with our dollar floating out there on nothing more than the faith and confidence in the self-discipline of our politicians. With every passing day, I marvel that it hasn’t already collapsed as I have no confidence in them at all.

I read recently of someone asking if there is even gold in Fort Knox. I’ll go on record and say that I doubt there’s so much as a lost gold earring there. I suspect that it was pilfered to pay for the Vietnam war decades ago and whatever programs that the government wanted funding for without going through the normal budget route.

Once we went off the gold-standard, it was just a matter of time before the currency collapsed. In the history of the world, there has never been a government with the self-discipline to maintain a currency without some kind of limits imposed on it externally.

But who regulates Bitcoin? Interesting question. Here’s a better question: Is it regulated in any better way than the dollar? I might argue that it is regulated by the market: a brutal, callous, heartless force where allowed to work. Since the Federal Government, or any government for that matter, doesn’t impose its use by force, they’ve got only the marketplace to please. It will only be as useful as the confidence people can have in it. I wonder where our money supply would be if we had a choice.

I watched a series of videos some time back about a man who had proposed introducing the capability to use gold as a means to pay for government debt. His conjecture was that if the government would allow taxes to be paid in gold and then use the gold to pay creditors of the government, that an alternate currency would be created. Those that wanted to stay on the dollar could, those that didn’t trust the government could have an alternative. I’d be for it.

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