ON THE BLOCK
Bitcoin may offer a work-around scenario in that an individual is almost anonymous (not completely because the Feds can still employ technology to trace transactions if they wanted to really do the due diligence) and bitcoin doesn’t risk the threat of a server pulling the plug given that it is all peer-to- peer technology. I mean, look – if we had a total blackout in a World War III scenario as I outlined in my American Consequences story last year, well then yes, it’s a whole other story... But the risk of a bank or a government or just an Internet provider wanting to shut down an individual is partly diminished through bitcoin’s peer-to- peer technology. After all, there’s a reason that in challenged political economies like Venezuela, bitcoin has become increasingly popular. And this is exactly why governments from here to China want to shut bitcoin down. In China, authorities are trying to get ahead of the curve by creating their own digital currency – the digital yuan. They’ve even offered these digital yuan packets to communities in test projects. This enables people to have a certain ease of transaction while the government can still follow their tracks. A similar option is being discussed by the Federal Reserve here in the U.S. So can regulators shut down bitcoin? And if so, how vulnerable would that make investors? Another concern that bitcoin holders must consider is, can this really be considered a store of value when there’s no one there
(i.e., a central bank) to help even out the fluctuations in the currency? The reason the dollar works so well is because it tends to hold its value. Granted, that’s been rather debatable lately, especially as we consider the massive amount of money printing our government is engaging in, but nonetheless, an individual can transact efficiently in dollars. But how does one transact in bitcoin when it’s clear that an individual may lose or gain massive amounts of money whenever they try to actually use the currency? Imagine if you were to buy a car with bitcoin, and you paid $50,000 worth of bitcoin to the auto dealer. But then the following month, the value of bitcoin doubled from $35,000 a coin to $70,000 a coin... You just lost a lot of money on that car purchase by paying in bitcoin! A currency needs to be steady in order to be used . Ultimately, this may prove to be quite challenging for bitcoin. How can it really gain acceptance and be trusted if it’s susceptible to such violent swings? Then again, maybe it doesn’t need to be accepted and widely used? Perhaps bitcoin evolves so that it becomes more of what it is right now – a promise of the future. Like gold, which market bears argue has no intrinsic value, bitcoin will represent something... it will stand for something... The future.
32
February 2021
Made with FlippingBook - professional solution for displaying marketing and sales documents online