We were relatively quiet, debating the possible consequences of a new fork in Bitcoinlandia, when China returned to roar . This time the orders have been less ambiguous than in the past, and sharing sites located in Chinese territory have been forced to announce the early stoppage.
Apparently, the authorities of the People 's Bank of China the same that prints money with the smiling face of Mao, the worst genocide of all time are very concerned about the risk that some people lose money by investing in criptomonedas . They are not tender? What would we be without the tutelage of the masters of money?
We had already forgotten about the comings and goings of the Chinese government, their bewilderment at the existence of a currency that has not found a way to control. Now that the leaders of the Bank of China have informed us that Bitcoin is not welcome within their domains , though they themselves know that nothing can be done to erradicarlo-, we again become aware of the portent that Satoshi Nakamoto has bequeathed us. Why we are grateful; but also for provoking a new and necessary shock of those that regularly shake the weak hands .
And stormy seas reveal the character of each crew member of a vessel, moments of irrational panic in Bitcoinlandia are excellent opportunities to distinguish the good from the bad investors ; who understand the fundamentals of Bitcoin those who have confused this with a mysterious cryptocurrency cornucopia.
If you have embarked induced by panic buying, without taking anything more than what he told you about Bitcoin the news, eventually flee to the cries induced panic selling . So it has been from the beginning and will remain so at least until Bitcoin reaches its manifest destiny . From here we wish you a happy journey and good luck with sharks in the ocean of fiat money.
If, however, what motivates you is the final destination of this journey, what better time to remember the reasons why Bitcoin was created ...
by hodlgentlemen
Just a quick reminder of why Bitcoin was invented. This used to be evident. But today I'm not so sure.
- People used to use gold and silver to pay. Difficult to transport. Difficult to divide.
- paper money (paper receipts giving entitlement to gold in the safe of a bank) was invented. Easier to transport and divide.
- Banks handed out more paper money that had gold in the box. They operated in a system of "fractional reserve". A great revenue generator. But every so often banks collapsed due to massive withdrawals.
- central banking was invented. Central banks would be lenders of last resort. Massive withdrawals were mitigated by banks and guaranteeing their deposits each other through a central bank. The risk of massive withdrawals did not diminish; what was their frequency decreased, but increased its impact. After all, banks remained basically insolvent in this scheme fractional reserve.
- The banks still get into trouble. But now, if a bank had a big enough problem, everyone would have the problem at once. Governments had to intervene to save them.
- All links between the financial system and gold were cut in 1971, when Nixon decided that the US dollar would no longer be exchangeable for a fixed amount of gold. This compounded the problem because now the banks could create paper money without limits.
- From this moment, all the money was created as a credit. Money ceased to be backed by an asset. When you ask for a loan, you create money and lend it. Banks expect the newly issued money is returned to them with interest. Yes, banks need to maintain adequate reserves. But these reserves are basically the same money based on credit. And the reserves are a fraction of the credits are created.
- This led to an explosion of the money supply. The Fed stopped reporting the M3 index (translator's note: in the US, the M3 is a broad measure of money supply, which includes the amount of money available in the economy for goods, services and values) in the year 2006. But the ECB currently reporting an annual increase in mass euro about 5%.
- This leads to an annual price increase. The price increase is somewhat lower than the increase in the money supply. This is for a steady increase in productivity. In the absence of money creation, it would be expected that prices go down every year. Who do not is the result of money creation.
- What remains is an inflation rate in the range of 2%.
- Banks have discovered that they can divert their coffers entire increase productivity + 2% each year, without people complain a lot. This is currently achieved by increasing the money supply by 5% annually, and getting this money back with interest.
- In addition to this insidious burden on society, banks take the society hostage every couple of years. In case of financial crisis, banks need financial bailouts so that the system does not crumble.
- Apart from these problems, banks and governments are struggling to eliminate cash. This would mean that two free men could not exchange money without the mediation of a bank. If you think you share with others is a fundamental right, this should scare you.
- The lack of money was backed at the root of the problem. We got "vein" paper money because there were no good alternatives. Gold and silver are still hard to use.
- When he tried to pull a currency backed by precious metals (Liberty Dollar), the initiative was closed because it undermined the US monetary system. Apparently, an alternative currency could only prosper if "no" and threw her if there was no single point of failure that could be attacked.
- What was needed was a system of electronic cash peer-to-peer. This is what Satoshi Nakamoto described in 2009. It was an answer to all the problems described above. Therefore he puts on the first block of this text string: "03 / January / 2009 Chancellor about to grant a second bailout for the banks.". Bitcoin was intended to be an alternative to our current financial system.
So when you find yourself religiously watching the price of some cryptocurrency, or entangled in discussions about the "authentic bitcoin" or constantly asking what currency to buy, please remember at least we have more important matters to attend to.
We are here to fix the financial system.
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