Bitcoini and the dangerous fantasy of a nonpolitical money

Bitcoins are digital currency units that people can use, online, to buy [a limited number] of goods and services. The digital nature of Bitcoin is not what makes it new and unique. There's a large range of digital waves, including dollars, euros and other forms, such as flight points, Amazon points, etc. Started with standard money, more than 90% of dollars, euros, lives and so on, are digital. When your bank gives you a loan, for example, they look like digital money in your bank account. And when you use your credit/borage card on the Internet so that you can transfer it to someone else, from whom you're buying anything, your dollars or your euros, go and come as just a digital currency. Only a tiny fraction of the standard money is in the form of paper or metal.

Similarly, when a flight company gives them points that you can add using credit cards or paying for a trip, it is creating a digital currency. Similarly, when the European Union created the carbon trade scheme to be used by corporations and traders, it set up a digital fund of carbon dioxide, divided into small bundles, distributed with corporations [by connecting each of these dengues or carbon dioxide quantum units that the deng owner can emit] and then release it to trade these dens [or, pollution rights] among them, in the hope that this digital trade will generate a price for carbon dioxide to have less energy and that causes their balances to occur. Did this scheme work, these carbon dioxide dens emerged as single-digtal currency.

So, bitumen isn't something new because it's digital currency or because it's an invented currency. There are waves like this everywhere. What's new and unique, however, is that no institution of any company is saving the so-called Ledger: The record of transactions that ensure that, when you spend a currency unit, there's one less in your digital wallet.

Or, put it another way, take the souvenirs of gold such as: by their [metal] nature they're restoring a private exchange tool, in the sense that when I use one to pay Mary for a car she's selling, I'll have one less in my wallet. The biggest challenge of creating an unphysic, completely digital currency is the question: If the wave unit is a string of zeros and a pair on my hard drive, who can stop me from taking that string, copying it and deciding every time I want to and become the rich one? If I could do something like that, then it means that each of us has a tool in his own living room that could create hyperinflation.

By the way out of Bitcoin, the conventional knowledge said that to create a digital currency that wouldn't create hyperinflation, one Ledger There should be a Central Bank and several corporations. Bitconi, he broke his back to this assumption.

Bitcoin was born one day in 2008 by an anonymous computer, using an unusual Japanese nickname [aka Nakamoto], posting an algorithm that made something extraordinary possible: it could generate a string of zeros and tinks that was unique, ensuring that, before being transferred from one computer to another, a minimal number of other users had to follow its transfers and verify that they had left the equipment of the retailer [of goods and services] without moving it from the equipment of the buyer. Furthermore, the algorithm was written in such a way that it would ensure a steady production of these verses, or bitcoins, over time and in response to the power of the computer that users offered to help them score the transfers and thus reach one Ledger A collective. Finally, to cover the bitcoin supply, and to preserve their value, the algorithm had to ensure that the maximum number of these verses, or bitumenns, could only increase [according to algorithm structure] to 21 million units by 2040. Until that amount was reached, its production would be interrupted and Bitcoin users would have to circulate those 21 million units. In the meantime, before that date, and before the maximum allowed bitcoin to be reached, the interruption with which users can create new bitumen [making the power of the computer capable of the Bitcoin community] would be related to the overall quantum quota of the already created Bitcoins or extracted from the algorithm.

In a sense, the designer of the Bitcoin algorithm seems to have designed a new currency on the basis of confidence in a brutal monitarian version. Quantitative Money Theory [the idea that the value of money depends solely on the quality of money offered to people] And that's why he's trying to create a equivalent of... gold. Bitcoin was actually shaped like gold.

2. Bitconi as a digital simulation of a precious metal [e.g. gold

What is the greatest merit of gold? His rarity! The fact that, at one time, for strange reasons [the most likely because of its splendor and rarity] began to use it as (a) a means of exchange and (b) useable value, gold became currency, and its smallest possible quantum became currency. Bitcoin algorithm designer tried to emulate gold. Like gold, for which it is promised to be at a rate fixed below the surface of the earth, the bitumen is also limited, artificially [through the definition of its algorithm] to 21 million units. And units like gold, there are two ways to buy it: either through dollars, chickens, silk, honey or other... The other one is to lie around as in the 19th century searching for gold. In that sense, Mr. Nakamoto identified his brilliant algorithm that allowed for a bitcoin strike. Here's how he did it:

Bitcoin's unictality, as we all agreed before, is that no central institution [private or public] cares about Bitcoin transactions. So, who is it? The answer is spectacular: “We all are!” So what I mean is that the Bitcoin algorithm is written in the way that makes it possible for the entire Bitcoin user community to have access to it, and to do police, to be the Leger of Transitions.

In this sense, Bitcoin users must make it possible for the community of bitcoin users so that everyone can see Bitcoin's help to ensure a perfect communicator possession of transaction accounts, which is contrary to trust in some government agencies or some private corporations that could have their own agenda. It's natural that, while the bitcoin economy, and the number of transactions increase exponentially, the measure of computer power that is necessary for an individual to be dedicated to the Bitcoin plant in order to see when a new bitcoin grows exponentially over time. This adult complexity also acts as a legitimizer of the notion that young bitcoins offer for the accounts of users who increase the computer power available to the Bitcoin community.

3. Two fundamental Bitcoin flaws

As with all digital things, there are a lot of security-related concerns; the fear of hackers and eʹspivs. Imagine a world that's been through the bitcoin. Wouldn't we be afraid any genius hacker would manipulate the Bitcoin algorithm for his purposes? Would it be wise for mankind simply to predict that the bitcoin algorithm is inexorable? Besides, even if the algorithm is safe, there's always risk that people's bitcoins are being robbed online. And if bitcoins are secured in a insurance company, what happens [in the absence of a central Bitcoin bank] if that bank company just disappears into the dark gaps in the internet?

Such concerns might be enough to upset the future of this currency. Yet, these are not its main shortcomings. No, there are two insurmountable defects that make bitcoin a very problematic currency: First, Bitcoin's social economy is connected to being typified by chronic deflation. Second, we've already seen the establishment of a bitcoin aristocracy who, despite the matter of a distributive justice which it raised, stirs serious fears about the capacity of very few people to manipulate currency in order to enrich themselves. Let's look at these two problems closer.

The first one, deflation is inevitable in the bitcoin community because the maximum bitcoins are already fixed to 21 million bitumens and approximately half of them are stamped at a time when very little good and services can be translated into bitcoin. To put it more simply, if bitumen continues to penetrate the market, a growing number of goods and services will be sold in bitumen. And so, the proportion of quantum growth or quantity will go through the growth rate of bitcoins [a rate that, as explained, is closely related to the Nakamoto algorithm]. In brief, a limited number of Bitcoins for each unit of goods and services will fall, causing deflation. And why is that a problem? For two reasons: First, because an expected drop in bitcoin prices motivates people with bitcoin to put off, as much as they can, spending them [why should I buy something today when I can buy it cheaper tomorrow?]

Second, two defects are developing, completely inevitable, within the Bitcoin economy. The first effect has already been mentioned. It's what divides the btcoin's <x0)aristocracy” from “Pravants of the Bitcoins”, or from the late people who can buy bitumen with the dollar and the adult euro. The second defect separates speculators from users, or those who view currency as a means of exchange from those who view it as a valuable action. The combination of these two defects, whose width increases, is to inject a massive non-stabilizing potential into the bitumenn universe. While it is true of all currency that always needs speculation, in the face of the need for transactions, in the case of the qualms' speculation of the bitcoin's need for transactions. And as long as this is so, instability will remain too great and it will contain those who would like to enter the Bitcoin economy as users. So, like the bad money that puts out good money [Gresham's famous law], the speculation needs for bitumen stimulate our need for transactions.

Can these two defects be corrected? Would it be possible to calibrate a long-term bitcoin measure in that way to improve the deflational effects described above by balancing balance from speculative needs in those transactions for bitumens? To do something like that would require a Bitcoin Central Bank, which would naturally defeat the goal of having a digital decentralised currency like bitumen.

4. Conclusion: The fantasy of an honest depoliticized money

The 2008 crisis has injected our societies with an enzyme scepticism in the role of authorities, towards the government and the Central Bank. It is only natural that many dream of a currency that politicians, bankers and central banks cannot manipulate; a currency of the people, of the people, and of the people. Bitconi turned out to be a great white hope of something like that. Sadly, the hope that brings to the hearts and minds of many is counterfeit. And the reason is simple: While it is true that local communities in the past have generated successful communarian waves [which allowed them to improve their well-being, especially in times of acute economic crises], cannot have a depoliticised currency capable of empowering an advanced and industrial society.

Since the second industrial revolution enabled the appearance of large, oligpolitical companies [Edisons and Fords of 1900, and today's Google and Apple], capitalism became dependent on huge credit momentum for the purposes of funding these capital corporations. These credit drives required a huge push of money, both in order to finance the creation of new capital goods and also to support the new consumer models that were needed to maintain the new production capacities of the economy. Even when capitalist economies operated below the Gold Standards, banks found ways to create money by adding amounts against the existing, sustainable shares of gold.

The 1920s thus demonstrate the inability of nonpolitical money. Although monetary authorities were insisting on a stable correspondence between the quantum of paper and gold money, the financial sector was inevitably pushing the money. Could the authorities stop them from doing so? If so, Edison and Fords would never flourish, and capitalism would have failed to produce the goods it produced; indeed, it would have persisted and brought about social tensions that would have put its institutions in a crisis much earlier than 1929. So the authorities stayed, allowing the 20th flu to swell, bringing 1929 and the Great Depression catastrophe.

The reason that money is and can only be political lies in the fact that the only way to guide the course between Scyllas and Charybdis [when you have to choose between two devils] of dangerous growth and a stagnation is to exercise a degree of rationality, collective control over the amount of money. And since control is said to be political, in the sense that different monetary policies will affect a different group of people, the only good form for this control to be exercised is through collective and democratic agencies. In brief, since political money is a dangerous illusion, the central bank that is democratically controlled remains the only hope for a form of money that is for the people and the people. Bitcoin, despite some interesting characteristics, I can never do that.

Epilogue

Bitcoin enthusiasts, like the faithful in Ar's Standards, understood money as if it were any luxury that would spontaneously emerge as a trade unit similar to cigarettes in the war inmates' economy that R.A. Radford described it so brilliant. This is a misconception based on unexaminationd belief [and dangerously forged] that there is no fundamental difference between the camp of prisoners of war and the modern capitalist economy; as champion of war prisoners [as] PW camp], production is independent of expectations and need is always abundant enough to absorb production. As for investments, they are supposed to be uni-dictionals determined by savings which, in return, are determined by the rate in which current consumption is delayed for the future. None of this is kept in an economy, including not only exchange but also investment production. There are these two activities, production and investment, which hinder the possibility of a nonpolitical money.

Subtitle by: Periscope