The End of Money

By Justice Litle

The world’s monetary system stands on a precipice…

It may not feel like it. But we are fast approaching what I call “the end of money.”

The process that will lead to the end of money has already begun.
That’s why central bankers and governments are terrified of the booming
“digital currency” bitcoin… and the implications it has for outdated
fiat regimes.

Maybe that’s why a government-sponsored cyber-terror agency tried to shut the bitcoin down.

Instawallet is – or, rather, was – a service that made it
easy to store and spend bitcoins. Instawallet was just hacked
anonymously – leading it to shut down until it can develop a new
hacker-safe architecture.

Of course, we can’t say for sure that the bitcoin cyberattacks are
the work of a worried government (or governments). But this is a logical
assumption… and, at minimum, a strong possibility.

Bitcoin is such a threat to the standing fiat money regimes that it would be crazy for them NOT to try to torpedo the bitcoin under cover of darkness.

Bitcoin is a “decentralized digital currency.” It was launched in
2009 by a developer known only by the pseudonym Satoshi Nakamoto.

You can buy bitcoins through a range of online exchanges. (This is the largest bitcoin exchange.)
Once you’ve bought them, you store them in an online “wallet,” a small,
unobtrusive program that runs on your computer or phone) and exchange
them anonymously… locally or internationally.

This all take places without any bank, government or other middleman taking a cut.

The supply of bitcoins is finite. There is no bitcoin central bank.
And there is no backing by “fiat” from any government. There is a hard
limit of 21 million bitcoins. The rate of new bitcoin issuance is
automated. Based on the rate of issuance, the 21 million hard limit will
be reached by 2140.

Currently, the total outstanding supply of bitcoins is worth over $1 billion.

There are two important reasons why bitcoins have value:

1. Their supply is strictly limited (much like the supply of gold)

2. They’re nearly impossible to counterfeit.

Gold has been desirable as a currency for millennia because it is
portable, divisible and in limited supply (unlike the paper stuff, which
can be cranked out at will). The bitcoin has exactly the same
characteristics.

And all bitcoins are verified by a “transaction chain.” This means,
to counterfeit bitcoins, the counterfeiter would have to spoof a
miles-long transaction record and fool thousands of independent servers
instantaneously (a feat orders of magnitude tougher than counterfeiting
paper banknotes).

Bitcoin is ushering in a sea change. It is teaching the users of
fiat-backed currency to think and imagine… and what they are thinking
about is a monetary future without central bankers.

The key point here is that the bitcoin is a viable
alternative to a system in which the government issues currency… and
declares “by fiat” that it is worth something while it prints unlimited
amounts of the same currency.

The mainstream media’s scoffs and guffaws… and the shadowy hacker attacks… do not diminish that reality.

Are bitcoins a good investment right now, as they enjoy the spotlight
of a tulip-like mania? Probably not. Wait for price volatility to
create better buying opportunities.

While you’re waiting, remember that bitcoins are the harbingers of brand-new realities… and the “end of money” as we know it.

There will come a time – perhaps soon – when you can denominate the
majority of your liquid assets in a stable, private currency of your own
choosing…

One issued by no government. And manipulated by no central bank.

Carpe Divitiae,

Justice