Bothering With Bitcoin

It’s been used to buy drugs, weapons and all manner of illicit goods. Even though each one has a unique code, it’s anonymous and untraceable. It’s being stored in wallets, safety deposit boxes and slicks, yet it makes its way around the world quietly and quickly. Its fluctuations in value have made paupers into millionaires and the other way around.

It’s called cash.

For all of the cry and hue about Bitcoin, it’s not as disruptive as people may have you think.

It’s an open secret that world economies today are essentially floating on foundations of air that we call “faith”. Digital currencies are nothing new, of the total amount of US currency available – about $10.5 Trillion dollars (that’s right, the US debt is actually larger than the amount of money than the US has by about one-half) – “only” $1.25T is in circulation in the form of bills and coins, of which half of that is outside the United States.

The rest of the cash is held in private and public bank accounts, travelers checks, Treasury bills, money market funds, CDs, etc.

In other words, most of the US fiat currency doesn’t physically exist, it’s digital.

So, you say, it doesn’t really matter whether or not the dollars I use to buy my Mac (or MAC-10 submachine gun if you are anarchically inclined) are printed or digital, it merely represents a physical asset held by the US Federal Reserve.

Well, not really. Once upon a time you could redeem your $50 Federal Reserve Note (that’s what dollar bills are actually called) for $50 in gold. But the US ceased to be a gold-backed currency in 1973 (guess who the President was?) although it still holds on to gold reserves in Fort Knox and Manhattan (shhh.. that’s a secret).

Total value of that gold? About $574 Billion dollars, which is about what you all have stashed away under the floorboards or in your mattresses.

Next “Cryptocoin To The Rescue

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