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Is Bitcoin All It’s Cracked Up to Be?

There are a lot of people now who are using Bitcoin and promoting it as the greatest thing since wholesome sliced bread. Some see it as a savior and are getting a little too cultish with it. But others merely see Bitcoin or other digital currencies just as a practical alternative to cash or credit cards to make purchases or to invest.

Well, I’m skeptical. But if you want to put some of your money in Bitcoin, and pay for things that way or receive payments that way, that is up to you.

Back in 2013, Ron Paul had this to say about Bitcoin, as reported by Zero Hedge:

“To tell you the truth, it’s little bit too complicated. If I can’t put it in my pocket, I have some reservations about that. But it has been designed in the free market. If it is a means of exchange, it would not ever be illegal. You shouldn’t regulate it in the free market, but I do not think it fits the definition of money, which has been around for 6000 years.

“People want to see something they can know what it is, they can define it, touch it and put in their pocket. If you do not have a computer and someone running the computer and calculations, you don’t have it. I am not a big supporter of that, but I am not opposed to it. I admit, I do not fully understand what is going on with it.”

But more recently, as points out, Dr. Paul has now done ads promoting a “digital currency IRA” with Coin IRA, a subsidiary of Goldco. In the ad, Dr. Paul says, “As a firm believer in currency competition, I’m excited to see the options that Bitcoin opens up.”

Well, I support currency competition, too, but I’m a bit more skeptical of investing with “digital” currencies. It just doesn’t make sense to me to put retirement funds into a “virtual” currency. It is not real like some actual item that is a means of exchange but would at least be backed by something of actual value such as gold or silver. And I am just skeptical of something that is known as a “virtual” currency. I don’t want to put something that I have that’s of value into something that’s only “virtual.” It just doesn’t make sense to me. But then, the “dollar” is not backed by anything, so it actually has no real value either.

And a lot of people are excited about Bitcoin because it is a “decentralized” currency. But for something that is known to be “decentralized,” there is a centralized aspect that I don’t like, I mean the centralization of electricity provision. This “e currency” relies on computer networks and on the Internet, which rely on electricity and the electrical power grid. If there is a power failure, especially large-scale, what then?

If you have money (in dollars) in the bank, and the banking system collapses, and there are “bank runs,” the bankster fraudsters won’t give you your own money. But you can have actual physical money such as dollars or gold coins stored away for such emergencies. However, if you just have digital currencies you’re screwed when there is a major electrical failure.  And I don’t have that much wealth or that much of an income to begin with. I’m probably being overly simplistic, or pessimistic here.

Back in 2013, Robert Wenzel asked some (mainly libertarian) economists whether Bitcoin is money. Most of them said either “not yet” or that it could be money if it were generally accepted (among the population) as money or as a means of exchange. The most interesting answer, I thought, came from George Reisman, author of The Government Against the Economy. In his response to Robert Wenzel, Dr. Reisman stated,

In order for bitcoins to someday become money, a reliable exchange value would have to come into existence for them. This could be achieved if some important country became willing to redeem bitcoins on demand in exchange for its own currency, and do so for some time, or provide a sufficient fund of its own currency to make this possible by others. In that case the money character of that currency mighty be transferred to bitcoins, Such a process took place in 1924, when a new German Mark was introduced on a foundation of dollars and gold, following the destruction of the previous Mark in the hyperinflation of 1923. Perhaps today, if Bill Gates and Warren Buffet, say, combined their resources to support the value of bitcoins for a few years, a similar result might be achieved, but even that is doubtful, because even their resources are probably not sufficient, and, of course, they would have no possible motive to do this.

Otherwise, a process would have to take place similar to that which enabled gold and silver to emerge as money, namely, first, the existence of an exchange value based on use as a commodity, and then an additional and wider exchange value based on use as a store of exchange value. When enough people wanted to acquire gold or silver as a store of value, even those not interested in doing so, became willing to accept gold or silver because they knew that a substantial number of people were ready to accept it from them.

And some people believe that Bitcoin is beneficial because Bitcoin transactions are anonymous. Well, think again. According to, “Because every transaction exists on a public blockchain ledger, an enterprising organization – say like the NSA or IRS – could conceivably implement blockchain analysis tools to track down Bitcoin fund transfers around the globe.” And the article points out that the IRS already has software contracts now with blockchain analytics firms to find tax evaders, money launderers and drugs dealers. After all, that is why the Founders wrote a Constitution, isn’t it? (Sorry.)

And in a more recent article which is very informative and well worth your time, Brandon Smith at says that “the virtual economy is the end of freedom.” He makes some very good points that should be considered.

Smith notes that “true money requires intrinsic value. Cryptocurrencies have no intrinsic value. They are conjured from nothing by programmers, they are ‘mined’ in a virtual mine created from nothing, and they have no unique aspects that make them rare or tangibly useful. They are an easily replicated digital product. Anyone can create a cryptocurrency. And for those that argue that ‘math gives crypto intrinsic value,’ I’m sorry to break it to them, but the math is free.

“In fact, for those that are not already aware, Bitcoin uses the SHA-256 hash function, created by none other than the National Security Agency (NSA) and published by the National Institute for Standards and Technology (NIST).”

And Smith goes on:

Ask yourself this: Why is it that central banks around the world (including the BIS and IMF) are investing in Bitcoin and other crytpocurrencies while developing their own crypto systems based on a similar framework? Could it be that THIS infusion of capital and infrastructure from major banks is the most likely explanation for the incredible spike in the bitcoin market?  Why is it that globalist banking conglomerates like Goldman Sachs lavish blockchain technology with praise in their white papers? And, why are central bankers like Ben Bernanke speaking in favor of crypto at major cryptocurrency conferences if crypto is such a threat to central bank control?

Answer — because it is not a threat.  They benefit from a cashless system, and liberty champions are helping to give it to them.

Above all else, the virtual economy breeds weakness in society. It encourages a lack of tangible production. Instead of true producers, entrepreneurs and inventors, we have people scrambling to sell real world property in order to buy computing rigs capable of “mining” coins that do not really exist. That is to say, we may one day soon be faced with millions of citizens expending their labor and energy in order to obtain digital nothings programmed into existence and given artificial scarcity (for now).

In my view, there does not seem to be any kind of escape from the tentacles of the centralized regime in Washington which consists of extremely invasive and intrusive, power-hungry madmen (and women). It is yet another reason why not only do the people need to decentralize their energy production including the electrical grid, but to decentralize the entire territory now known as the USSA.

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