[youtube]http://www.youtube.com/watch?v=lRpwRpLdLDc[/youtube] In our newest video, Dr. Chris Martenson and Mike Maloney take some time to discuss Bitcoin, precious metals and the future monetary system. Read more here We first celebrated Bitcoin Invading Mainstream Banking on January 11, then reported here on April 30 that Canada had tightened its grip on Bitcoin exchanges. In another article (with video from Mike), we posed the question: Could Bitcoin Eventually be the New World Currency? The big deal over Bitcoin is our freedom of choice, because if digital options such as Bitcoin or U.S. dollars were equal in value as money to gold and silver, the owners of the systems wouldn't need laws to enforce a currency monopoly. Mike has already taken sides in this controversy, saying, "I'm for whatever the free market picks for currency." Dr. Martenson agreed, wisely pointing out the ongoing "Cold War race between security professionals and hackers."
Why is it obvious they haven't done enough research? Everything they say makes sense. The jury is still out on bitcoin. History shows physical PM's work. Not trying to be facetious, but like most people I don't understand why bitcoins are better than PM's.
They're not. That's like saying pork is better than beef. It really depends upon the qualities you are comparing. There are two aspects to bitcoins that make them more useful than PM's, ease of exchange and freedom from government control. PM's on the other hand have aspects that make them better than bitcoins - but this has been debated ad nauseum so I won't repeat it. However as Chris Martenson points out, as bitcoins become used more widely - they will increasingly come under the radar. He mentions market manipulation in exchanges, robotic programmes creating volatility and "shaving pennies", as has happened in other exchanges and then of course there is government and central bank desperation. Neither of these hindrances should detract from the admirable qualities that the designer of Bitcoins envisioned, but as certain as day follows night, the vast majority of Bitcoin adherents are not stacking Bitcoins primarily because of any anarchist economic theory, rather they are primarily seeking to make a profit by getting in early and selling to the mugs down the track. Much like many PM stackers. They're not better than PM's, they just have the potential to do a similar job in a vastly different way. Because I'm a hard asset investor though, I do not buy BTC and I do not see BTC being able to fulfill the potential that it's creator envisioned.
Quite frustrating to watch really. These two guys seemed to have forgotten the purpose of a currency - and see it as just an asset class that can be speculated upon. It might be that, but it's true purpose is as a means of conducting trade avoiding the double coincidence of wants - and without constraints on physical location, and near anonymity. The energy consumed is not about creating bitcoins, it's about guaranteeing the validity of all transactions - without centralisation. Bitcoins that are 'mined' is merely the incentive method to ensure that these transactions continue to be guaranteed.
