I came across this on the internet and thought I would share it here as it is a very well written piece on our beloved Bitcoin.Why Bitcoin.
by AdamintheworldHenry Ford said, "It is well enough that the people of the nation do not
understand our banking system, for if they did, I believe there would be a
revolution before tomorrow morning."
That revolution is underway, called Bitcoin. Bitcoin is a number of things
but, primarily, it's a new form of money – Internet money. I wrote this
article because I think it's one of the most significant innovations since
the Internet, and much of the news around Bitcoin is misinformed or
intentionally misleading. But why would we need a new form of money? What's
wrong with the US dollar, credit cards and banks?
A lot.
To understand why, we have to understand what money is. In the modern world
when we think of money, we think of dollars, pieces of paper with numbers
printed aside pictures of dead kings. But those dollars are intrinsically
worthless, for other than folding into origami swans, or serving as
kindling to start fires, they have almost no value in and of themselves.
But we as a society attribute value to them: we all agree that they are
worth something. The way we all came to this agreement happened long ago.
In antiquity, barter was the currency: I give you a hammer and you give me
a deer hide in exchange, something of value for something of value. But
having to lug around hammers and deer hides was cumbersome…something more
transportable was needed. As time progressed, things such as sea shells and
salt were used as currency, used because of their scarcity and utility:
seashells were beautiful ornaments, and salt could flavor or preserve food.
But these new currencies weren't altogether scarce, as there's a lot of
seashells and salt in the world, and the more of something there is, the
less valuable it becomes. Something even more scarce was needed. Eventually
gold became the world's currency, used for thousands of years, as it is
very scarce and intrinsically valuable. In order to keep one's gold safe,
banks became storehouses, and for a fee you could keep your money in a
well-protected vault rather than under your mattress. The peace of mind was
worth the penny. When a person deposited their gold in the banker's vault,
the banker would issue them an IOU, a receipt that they would bring back to
the bank whenever they wanted their money. Eventually, people began trading
these IOUs, signing them to other people, because it was more convenient to
purchase a herd of cows or land with a paper IOU than to retrieve your gold
from the bank and carry it into town. Eventually the bankers realized that
almost never did all depositors withdraw their money simultaneously, so
they put the dormant gold to use by lending out the depositor's money to
others so they could earn interest on the loans. In effect, they discovered
the secret to the ancient search for alchemy, they created money out of
nothing. This was the birth of fractional reserve banking – the creation of
fictional money by lending what did not exist. For example, if a depositor
gave the bank one ounce of gold to store for them, the bank would then turn
around and loan that ounce of gold out to others in the form of IOUs or
checks, commonly nine times in excess of what they actually held. This
system of banking showed its weakness in the form of the bank runs in the
1920's when banks had to close their doors to hoards of depositors
demanding their gold; they didn't have it because they'd loaned it out to
nine other people. Bank runs became common and banks occasionally
went….bankrupt. Something needed to change.
In 1913, a group of the wealthiest men in the world - bankers, politicians
and businessmen - got together and convinced the US Congress that a central
bank was needed, a bank too big to fail, a center through which all money
was issued and regulated. The Federal Reserve System was born, and became
the new issuer of American money. This meant money was now no longer a free
market function, but a function of government, an idea borrowed from
Communism. If the government needed money for a new war, they didn't need
gold in the bank or to ask the citizens for tax payments to fund it: they
could borrow it from the Federal Reserve without question; if they needed
funds for a new welfare program such as Socialist Security or Medicare,
they could borrow it from the Fed. If, such as in the bank bailouts of
2008, the government decided to keep failing private banks afloat by giving
them money – which was the purpose of the Federal Reserve all along – they
simply had the Federal Reserve create the money for them.
The result of creating fiat money out of nothing is inflation, and
inflation is a mechanism to control the lower classes. For example, imagine
playing the game of Monopoly, and the banker – who is also a player – keeps
adding money to his personal supply at will. He'll quickly end up owning
all the property as he decreases the relative value of your money. That is
exactly what happened in the 2008 bank bailouts where the central bank
created trillions of dollars out of nothing and gave it to the US
government, who then gave it to the banks, causing the value of all dollars
in circulation to decrease. Through this process, the government taxed
Americans secretly and gave the money to the bankers, who buy politicians.
And the Federal Reserve has no limit to how much money they can create. The
US dollar – and all major countries– now operate on fiat currency, money
that is based on nothing: no gold, no silver, no seashells, just the
declaration of the government that it's worth something, "legal tender",
and the consent of the people to use the worthless currency. And when a
government has an unlimited supply of money, they inevitably become
corrupted by this nefarious magic and terrorize weaker countries, fund
wars, and create welfare programs to enslave their own population. History
shows that all fiat currencies eventually revert to their true value of
zero as inflation snowballs out of control. And as a nation's currency
collapses, so do its institutions, economy and ultimately, social order.
So, the banking cartel called the Federal Reserve has a monopoly on
creating money out of nothing and collecting interest on the fake fiat
money it loans out, while congress has access to unlimited funding through
loans from the Federal Reserve which secretly taxes the public through
inflation. This system has sunk the country and its citizens in debt. If
every debt in America was to be repaid, there wouldn't be a single dollar
left in circulation – there would be no money as we know it, for our whole
system is based on debt, our money is created from debt. Our economy would
collapse if all debts were repaid, therefore the debt show must go on.
Those in power have no interest in eliminating debt, only managing it. Debt
is the modern, invisible form of slavery. And slaves have no freedom.
In light of the US dollar turning out to be fools gold, why not just return
to the previous gold standard of money, which worked well in the past?
Because we live in a digital world where trading pieces of metal is
impractical, instead forced to trade in computer digits, unless we want to
abandon Amazon Prime and the ability to purchase cheap goods from around
the world. Gold is still valuable, as it has always been, but for the
digital world we need a digital gold.
At the same time that the government and bankers were stealing the wealth
of Americans in 2008 by giving billions of dollars to insolvent banks, a
new monetary system called Bitcoin was created by a mysterious person, or
persons, called Satoshi Nakamoto: internet money, known as cryptocurrency.
This new money is capable of replacing the current corrupted system.
Bitcoin is computer code that was set in motion in 2008, releasing Bitcoins
every ten minutes like gold found slowly in a mineshaft. There will only
ever be 21 million produced so, like gold and unlike US dollars, there is a
limited, finite supply, which is what makes anything valuable for trade. To
understand why Bitcoin is important - a solution to the social and
political problems we find ourselves in - one must understand how it works.
There are several technologies that compose Bitcoin. First, and most well
known, is the blockchain. The blockchain is the bookkeeper, a ledger which
maintains and monitors all transactions on the network. It differs from a
traditional ledger, which has been used since the dawn of writing, in that
it is maintained not by one central authority, but by many individuals
around the world. Similar to how the U.S. government was set up in response
to the totalitarian British monarchy/Church, the newly-formed American
government, with it's various branches and hundreds of individuals all
bringing "checks and balances" to the system, we found that a distributed
government was better for the people than a centralized authority.
Accountability by the people is essential, for power always corrupts. The
blockchain functions on this principle, that decentralized, distributed
power is less prone to corruption and self-interest than centralized power.
With a blockchain – which operates as it sounds – information is assembled
into "blocks" of transactions every ten minutes, which are verified by any
computer around the globe running the Bitcoin algorithm, and those
transaction blocks are strung together into chains, one atop the other, on
and on, a new block forming every ten minutes. And to change one
transaction of a single block, one would have to change the entire history
of the blockchain.
While the blockchain network ensures that all past transactions can never
be modified, what is to ensure that while the block is being written the
network records correctly? For example, a hacker in Algeria saying I sent
him one Bitcoin when in actuality I sent one Bitcoin to my mother in New
York. How does the network decide what is true, and what to add to the
blockchain when contradictions simultaneously exist? In a scenario such as
this it wouldn't be possible to know what the truth is. Both transactions
exist. So to solve this, the network looks for what is the most difficult
block. As each block of transactions on the chain is compiled and completed
every ten minutes, the Bitcoin algorithm creates new and ever-increasingly
difficult puzzle for the network of computers, or "nodes," to figure out.
All computers running the network, "miners" as they are called, are
competing to figure out the latest puzzle, and the first one to do it is
rewarded with Bitcoins. The only way those Bitcoins retain their value is
if the system is unbreakable, so miners have an interest in the integrity
of the network. If an outside computer were to try to record a false
transaction – such as sending my money to Algeria when it was supposed to
go to my mother – they would have to have more computing power than the
entire Bitcoin network. Which at this point, after ten years of the Bitcoin
heart beating every ten minutes, grows increasingly unlikely. The total
computing power of the network is larger than anything else the world has
seen, and faster than all the worlds supercomputers combined, many times
over. And growing as time pass. All transactions on the network are public
and can be viewed by anyone in the world, and encryption is used keep
private all other information, such as passwords.
If you kept $100 under your mattress, over the course of a year it would be
worth several dollars less due to the creation of new money. This
inflationary process is snowballing downhill as more and more money is
being created, despite our current president's promise to "balance the
budget." As the supply of money increases, the value decreases. Currently
there are 17 million Bitcoin mined of a total supply of 21 million, and
this creation process will continue at an increasingly slower pace until
stopping creation completely in the year 2140. So by nature, the value of a
Bitcoin is deflationary rather than inflationary – growing in value over
time, rather than decreasing.
Other than gold and silver, Bitcoin is the most sound financial hedge
against the next impending fiat collapse of the American dollar, which is
sure to come. And by this time, the entire world is operating the same
Ponzi-scheme fiat currency as America, so the collapse will possibly be
global, and those holding fiat currency will have little more than toilet
paper on their hands.
Over the course of a year in 2017, Bitcoin climbed from $1,000 to $19,500.
While the news was reporting on its skyrocketing price and the FOMO spread,
little education was happening; people were simply speculating on the price
rather than talking about the utility of Bitcoin and the problems it
solves. Then suddenly on December 17th, the price began crashing, all the
way down to $3,500 where it currently stands. How could this be,
considering all the developments in the world that were continually
happening with Bitcoin and its adoption? On that same day, December 17th,
Bitcoin futures were opened to the public. Futures are a financial game
where investors bet on the future price of a commodity such as coffee beans
or currencies like Bitcoin. As the price of Bitcoin astronomically
skyrocketed, beyond anything the financial world was used to, investors
took a gamble that the Bitcoin rise was a bubble, and that the bubble would
pop. So they invested or moved their money into the futures market, betting
that Bitcoin would fall. As investors pulled large sums of money out of
Bitcoin, the price fell, perhaps was manipulated into falling as the giants
of finance agreed to pull their money out and move it into bets against
Bitcoin. And the market fell. Fast. Despite all that, it's still the best
performing asses of the past decade. Decentralized money is important
because it enriches and empowers everyone, whereas the current model of
centralization enriches and empowers a self-interested few. Bitcoin opens
the door of financial opportunities to billions of people on the planet who
are reserved to the limited options of cash, alienated from the modern
economy. This is why the media – who is owned by the powerful and wealthy –
has had very little good to say about Bitcoin for the past ten years,
because it threatens their monopoly of power over the world. If we free
ourselves of debt, as people and as nations, we can move forward in healing
ourselves and our planet, and reclaiming the garden paradise that we live
in...and hopefully creating a culture that moves beyond the need for money,
with time and contribution the new currency. As the internet, over the past
twenty years, freed information from the hands of the newspapers and news
channels and gave it all to the people, so Bitcoin has the potential to
free true money back to the masses.
Interested in taking part in this evolution of human consciousness?
Download the app Cashapp to get started. As of this writing, CashApp is the
most popular place to buy Bitcoin. The CEO of CashApp called Bitcoin a
"transformational technology" and made it easy and cheap to trade US
dollars in for Bitcoin, and I've used it for the past six months and found
it far cheaper than the other popular alternative Coinbase. Once you
purchase Bitcoin, you don't technically own it until you transfer it into a
"wallet". To ensure that no corporation steals your investment, or the
stock market goes belly up, you have to become your own bank. A wallet is
an app you download to your phone which, upon opening, supplies you with a
12 word encrypted passphrase. This is the key to your new bank vault, and
will access your account from anywhere in the world, from any device. Keep
it safe, because if you forget it, your money is lost forever. Now, not
even the government or the best hackers can touch your money. There are a
number of good wallets available, but I have used the Mycellium wallet app
for the past year as it is the most highly rated for security. There's also
many shady wallets out there, so choose wisely. This makes banks obsolete
because, in talking about cryptography and cell phones, President Obama
said people are walking around "with a Swiss bank account in their pocket."
To transfer money or make a purchase, from your wallet you simply enter the
address of the recipient and select how much you wish to send. Without the
password to your encrtypted wallet, nobody can take funds from it, and you
will never have those subscription repreat charges that companies love to
sneak on you. The fees to send money are nominal and vary depending on the
network load, but currently transactions cost about 60 cents regardless of
how much bitcoin is sent, far cheaper than VISA's 3%. Also, that fee is
given to the individuals running the network – people like you and me.
There are thousands of crytpocurrencies available. Most of them are copies
or slight modifications of Bitcoin's algorithm; some are very different.
Many are downright shady or worthless in my opinion, while others have
noteworthy improvements, such as increasing the transaction speed
limitations of Bitcoin, or privacy coins where transactions can't be
traced. But what makes Bitcoin stand above the rest in my opinion is (1) it
is the first cryptocurrency and has withstood ten years of attack and
continuous obituaries by the news media, (2) despite all that, it has not
only survived, but continually adapted to these bumps in the road to
strengthen itself and evolve, (3) it has over half of the cryptocurrency
market cap in a field of thousands of players, and is the most widely
accepted and used, and you can now even pay your taxes in Ohio with it, (4)
the Bitcoin network can absorb the innovations of other coins, implementing
their ideas over time, even adding secondary layers of functionality like
the Lighting Network, and (5) no other name in the cryptocurrency space
carries the weight "Bitcoin" does, and humans are moved by tribal branding.
I dream of a world without money, where people simply do what they are
passionate about, free to do as they please like the animals, free to enjoy
the garden paradise we were all born into. In the meantime, the money game
must be played. And if it must be played, let's play to win.
https://old.reddit.com/r/Bitcoin/comments/ablu8x/why_bitcoin/
