Bitcoin hit an all time high on Sunday, reaching $3,000 per Bitcoin. Ethereum also reached a record level, trading at $407. Since this time last year Bitcoin is up over 360%, Etherium is up over 2,000% and Litecoin is up over 480%. With bitcoin and other cryptocurrencies continuing to gain real and stable value, one can clearly see the benefits of market based currency vs government controlled currency.
The Beauty of Cryptocurrency
The amazing thing about decentralized digital currency is that governments and central planners do not have the ability to take advantage of it like they’ve done with paper money, which they can print and control at will. Cryptocurrency allows for individuals to control their own resources without government interference and theft.
Cryptocurrency eliminates the need for banks or credit card companies.
It’s generated digitally from proof of work (PoW) algorithms which solve mathematical equations to receive cryptocurrency as payment in the form of bitcoin, ethereum, litecoin and many others. Digital cryptocurrency allows for transactions of payments in a more secure way than any other form of web based payments by utilizing blockchain which is comprised of a highly secured public ledger.
Utilizing Bitcoin, Ethereum and other cryptocurrency eliminates the need for banks or credit card companies. Putting the power of market currency strictly in the hands of consumers and producers. I love it!
Market Standards vs. Government Manipulation
Unfortunately, some believe that only the government should be in charge of certain things whether it be the delivering of mail, putting out fires, sending an ambulance, producing currency, etc… however cryptocurrency offers an excellent free market medium of exchange. The free market can do all of these things better through spontaneous order.
Central control of a currency has always led to government abusing the currency to grow bureaucratic control. I’ve always considered myself lucky to have grown up learning economic lessons and theories from my Grandpa. We spent lots of time metal detecting and searching pawn shops buying and selling gold and silver through the years. Along the way he taught me that gold and silver are real money and that the market is the best indicator of the cost of goods and services. The older I get the more I realize how right he was!
So, what would my Grandpa think about bitcoin, ethereum and other cryptocurrencies these days?
The basis for Grandpa’s lesson was that assets and commodities had actual value set by the market, not the government. While most governments have a history of using gold and silver for coinage and currency, at some point they always try to manipulate currency, inevitably converting to paper money, causing hardships on individuals, and eventually going bankrupt.
The bottom line is that central control of a currency has always led to government using and abusing the currency to grow government and bureaucratic control.
Gold and silver have withstood the test of time with the earliest gold coinage dating back to around 700 BC. Gold always serves as a great measure against the value of all currencies. Currently, 1 ounce of gold is equal to $1270 US dollars or .45 Bitcoin. When put in that perspective, we can see how well Bitcoin is actually doing.
Bitcoin has become digital gold.
Ludwig von Mises once wrote in the Theory of Money and Credit that the “phenomenon of money presupposes an economic order…” between production and consumption, not government. Through this spontaneous order the market is the best indicator of the value of goods and services. This is why Bitcoin and cryptocurrency in general is gaining more value.
What it comes down to is market standards versus government manipulation and control. Luckily, precious metals and cryptocurrency prove that the market will win and governments that print paper money will lose.
The Future of Money is Now
Bitcoin has become digital gold. In many ways it's become better than gold, allowing for an easier way to make exchanges and transactions worldwide. Trading has never been easier than with cryptocurrency. We are living in an amazing time for currency and trade.
I believe it's completely safe to say that the future of money is now.
In recent years, many have used and are familiar with web-based pay services like PayPal, which allows the use of many types of currencies including Bitcoin. Many stores are now accepting Bitcoin and very quickly it has become accepted worldwide.
While it's hard to estimate just how well Bitcoin and other cryptocurrencies will do in coming years, I believe it's completely safe to say that the future of money is now. Cryptocurrency has the ability to remove government’s manipulation of currency and interference in exchanges, allowing greater freedom of trade between individuals everywhere.