The Bitcoin Rush

The Bitcoin Rush

Judging by everything, we have gotten a new alternative to gold. In the history of mankind, there was always a currency above all currencies, something worth more than any kind of money, something that could save humanity from irresponsible governments and rulers, something in which we shall seek salvation from desolation when money becomes worthless. Those used to be noble metals – bronze, platinum, silver, and gold. Each of those metals has its own era, and in each era, it served as substitute for an unstable currency.

The fact is that there have been no dramatic changes in the Periodic system. We have obviously lost the missing elements somewhere along the way, during the creation of the planet as we know it. We have stopped at gold, and gold shows how important it is as a backup option for any fallen currency. However, there is a well-known problem pertaining to gold – it cannot be transported quickly, and it is difficult to disintegrate and thusly become the payment system on the network of all networks. Being humans, we are very inclined to spend more and more money there. The network gave us new possibilities, payments systems have greatly adapted, but gold remained in its traditional form – bars.

The inventor of Bitcoin envisioned it as a universal currency used in daily transactions, but its application has a much greater practical value. We have bid our farewell to all other noble metals, and now its gold’s turn. Don’t get me wrong, gold will remain our “reserve” for a long time to come, but Bitcoin has all the predispositions necessary to become what gold is today. A lot has to happen for Bitcoin to really replace gold, but it’s on a good path. With Bitcoin, you won’t go shopping as frequently as you do nowadays with euros or dollars or any other currency, even though many, including its inventor, consider it to be the first global currency. I really think that it will be the “gold reserve” of the future.

trading graph

Bitcoin, like any other noble metal, can be obtained in two way: you either mine it up – literally, or purchase it for a certain sum of money. Mining is difficult. It’s recommended to dedicate the resources of your computer to the so-called “pool mining” discovery groups. That means that a group of computer tests a sting of characters to determine whether they’re a key to unlock packets containing 50 Bitcoins, and that is a fairly slow process (for the curious – How to mine Bitcoins).

Bitcoin resources are limited, so they are increasingly more difficult to obtain. On the other hand, the price grows proportionally with crises. The bigger the crises, the more expensive Bitcoin gets, and it’s rather remarkable how it is most expensive in the zone of greatest turmoil. Cyprus, Greece, Spain – one crisis after another, and Bitcoin breaks a record each time. It’s easier to get to Bitcoin than to gold, it’s more readily available, transactions are made more easily and without a middle man (naturally, they can be done through clearing sites, but be careful, some have already figured out a way to abuse the service). In short, you can purchase Bitcoins from someone located on the other side of the world and put it in your wallet! This is akin to putting gold in your safety deposit box a day after the transaction – impossible. You have a personal safe for Bitcoin (the Bitcoin wallet), which is located on your personal computer, and it’s stored there right after you buy it.

Several companies have started accepting Bitcoin as a legitimate payment means, but that is not its future. It is my conviction that Bitcoin will, in the future, represent a virtual gold bar, stored for emergency. Its quantity on the market does not depend on anyone’s printing machine, and that is the most important condition – nobody can accidentally press the “start” button and start the process and say “oops.”

Author:

Predrag Lešić

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