There are many articles lately declaring Bitcoin’s demise, most presenting as evidence the collapse of Mt. Gox, a Bitcoin exchange. This is far from the truth, as the exchanges are just a small part of the Bitcoin ecosystem.
The free market to me is nothing more than a decentralized peer-to-peer network, individuals engaging of their own free will to cooperate with each other, which is also, essentially, Bitcoin.
I googled Bitcoin and came across Bitcoin.org, where I encountered Satoshi Nakamoto’s White Paper, which describes setting up a peer-to-peer network to solve the issue of “double spending” problem through the creation of the Bitcoin protocol.
Cryptocurrencies will not replace fiat currencies as some people fear, and they don’t need to in order for Bitcoin to function. Bitcoin has many applications and it will change how we interact with each other for the better.
I mine with a small 5G ASIC miner connected to a raspberry pi. I have no delusions that I will get rich off such a small operation and at the current difficultly and Bitcoin price it will take over a year to recuperate the money spent, and for me that is okay. I am not the most tech savvy person, probably more savvy than most but still a far cry from a computer/tech guru. So why on Earth would someone such as myself get into mining Bitcoins and other cryptocurrencies?
A great question! I have always enjoyed economics, legal history, and politics proven by my Bachelors degree in History. Over the years I have read Austrian School economic giants such as Hayek and Mises. I have also read Keynes and contemporary economists from the Keynesian school.
Bitcoin has many applications and it can change how we interact with each other. I don’t think all fiat currencies will disappear (which I think some people are afraid of) or that they need to in order for Bitcoin to function. And with the standardization of the Bitcoin protocol and its emphasis on finality of transactions, the future behavior of participants will lean towards more conscious purchasing and honest business interactions.
Financial market manipulation though poorly understood derivative trading, among other things, continues to throw the global economy into disarray. And the major players in this manipulation — who both assumed and encouraged taking great risk — are still up and running after their positions failed, by receiving enormous bailouts. While the homeowners were kicked to the curb with their property resold to negate the loses incurred by those financial institutions. Seeing how third-party financial institutions and central banks operate, I see the benefit of having an asset class not based on a central governing body. For me that is Bitcoin and cryptocurrencies.