This article I wrote as a conclusion from what I read about the economy and bit coin.
It is clear that the current money produced by the state for the profit of those who roam around it is no longer a solution for the economic system, and that a monetary reform is imposing very quickly if we really want to get rid of crises and legalized theft by which our property is clearly permanently aggrieved.
Money has appeared to mediate the exchanges between us. It was the most convenient commodity (in terms of the necessary properties) chosen by us to mediate these exchanges. When the chosen merchandise (gold or silver) became a means of exchange, it gained a distinct position between the goods we exchange between us. The value of gold as commodity was amplified by the exchange value attributed by participants in these exchanges. When the goods and services were exchanged for sight by means of gold or silver, the operators did not need a state or a court to intervene in this exchange. The problem arose when the goods exchanges were no longer visible when the problem of litigation was solved by a court on the basis of a system of laws that became very quickly the state's status.
The money was thus regarded rather as a means of extinguishing a debt (although this function was included in the middle of the exchange) or the means of payment and less as a means of exchange. The law came immediately and offered a legal definition of money that led to limitations and imperfections to what the market had chosen as the most appropriate money to mediate exchanges between us. By force of law, we can legally define anything as a ban and that is sufficient to serve as a means of payment or as a means of extinguishing a debt (especially the state). The problem is that what we legally define as money at the moment (a piece of paperless paper) is moving away from the essential economic function - the intercession of private goods and services. Current value money needs law and state to have a formal value. In the absence of the law and the state force behind it, traders would give up the first second of that money.
Starting from these introductory recitals, we are now returning to the theme of this article - Bitcoin: it was created in 2009 by Satoshi Nakamoto as an electronic fleet (without intrinsic value). According to those who created this coin, it is out of the control of any government that produces it in a large quantity and thus leads to inflation.
The mysterious Satoshi Nakamoto.
Who's Satoshi Nakamoto?
Satoshi Nakamoto is the name used by the unknown person(s) who designed bitcoin and created its original reference implementation. As part of the implementation, they also devised the first blockchain database. In the process they were the first to solve the double spending problem for digital currency. They were active in the development of bitcoin up until December 2010.
The criticisms we can make of this coin are as follows:
Lack of intrinsic value poses great problems in determining the prices of goods and services to this electronic filament montage. The value of gold exchange in other goods is essential to explain the relative price dynamics. Without this intrinsic value that Bitcoin does not have (as no classic money produces from nothing), generalized exchanges of goods and services are complicated by its use as a means of exchange;
The one who created this coin guarantees that it is out of government control. Wrong ... as nothing is above the law, when the state will want it, and when it sees that Bitcoin confuses it in its affairs, it will intervene by law and will unlawfully declare Bitcoin or impose by law a governmental control over it (including here and Bitcoin production). Unfortunately, we now operate with legal money or the law defines them and protects them as money. Bitcoin is a much simpler mechanism to be taken by the state and to impose it as an alternative to paper money or coins. And so we are now seeing a stronger increase in electronic payments and electronic money produced by the current banking system (cards). This is precisely what helps inflation behind monetary output. Hence the increasingly visible attempt to inhibit the population and those involved in exchanges to demand cash settlement and use electronic money for their electronic accounts. Cash has to be printed and if money is printed as scripture ban is electronically created by banks, we would have much faster signs of hyperinflation. Because electronic money (scriptural) does not circulate in the underground economy while cash does. Already there are concerns that Bitcoin will allow for money laundering and that it should be regulated by the state (see here).
- The lack of government control over Bitcoin's production creates the appearance that it is a little inflationary currency. Again it's wrong. The creators of this coin predicted an increase in a geometric progression of the amount of Bitcoin that would however be made with ever-increasing growth rates. Finally, there will be a stagnation or a relatively constant monetary mass. But until then Bitcoin's volume has increased significantly. Even so, any Bitcoin produced from nothing further reduces the purchasing power of the existing ones in the market being incorrect for those who own it. In addition, who guarantees that private control over the coin can not exclude fraudulent Bitcoin production. Only the temptation is great. From a simple programming BitToin can be produced at no cost and without significant control from anyone (it's really hard to figure out who and how Bitcoin created). Ultimately, this currency can become an inflationary one precisely because it has no production costs (or at least they are negligible). In the case of gold, these costs also exist and they are significant. That is precisely why the profitability of gold production and the market value of gold play an important role in the mechanism of market price formation and trade.
- Bitcoin can serve the interests of the state very well. By using it, transactions go through a server and come out. It will be much easier for the state to pursue, tax and control them. The underground economy would be strongly inhibited by the use of Bitcoin. It is unlikely that those who do not want the state to account on a server and start trading without paying their 100% anonymity.
Another problem is that we can now buy Bitcoin with fiat money produced by nothing from the current governments. By keeping the Bitcoin relatively fixed, it will become rare and very expensive compared to dollars or the euro (in 2009 Gavin Andersen bought 10000 bitcoins with only $ 50). This will make Bitcoin production very interesting. At a price of $ 10000 for 1 bitcoin, it's probably going to be interesting to produce it from a keystroke.
From my point of view, Bitcoin is just an attempt to further hinder the idea of exchange. It is a means of payment worthless and the imperfections of any coin created from nothing and which seriously violates the economic laws (see Say's Law, the Law of Marginally Lower Marginality, Greasham's Law, The Effect of Cantillon). It is no more than a handful of credit cards created by a bank of sight deposits and offered at the discretion to market users with the lowest possible operating and interest costs or money produced by a central bank controlled by a a group of private politicians. It has the same moral hazard involved in it and the same problems. If someone wants to get their production and can hijack it for its benefit without incurring too high costs. This pseudo-currency will sooner or later in crisis as quickly as the other currencies.Thanks for reading it!