Why Are Bitcoins Such a Big
Deal?
Bitcoins are not created by any central
bank, nor regulated by any government.
Accordingly, there are no banks logging
your money movement, and government
tax agencies and police cannot track your
money. This is bound to change in the
next two years, as unregulated money is
a real threat to government control,
taxation, and policing.
Indeed, bitcoins have become a tool
for contraband trade and money
laundering, precisely because of the lack
of government oversight. The value of
bitcoins skyrocketed in the last 18
months because wealthy criminals were
purchasing bitcoins in large volumes.
- Bitcoins completely bypass banks.
Bitcoins are transferred via peer-to-peer
network between individuals, with no
middleman bank to take a slice.
Bitcoin wallets cannot be seized or
frozen or audited by banks and law
enforcement. Bitcoin wallets cannot
have spending and withdrawal limits
imposed on them. For all intents:
nobody but the owner of the bitcoin
wallet decides how their wealth will be
managed.
This is really threatening to banks, as
you might guess.
- Bitcoins are changing how we store
and spend our personal wealth. Since
the advent of printed (and eventually
virtual) money, the world has handed
over the power of currency to a central
mint and various banks. These banks
print our virtual money, store our virtua
money, move our virtual money, and
charge us for their middleman services.
If banks need more currency, they simply
print more or conjure more digits in their
electronic ledgers. This system is easily
abused and gamed by banks because
paper money is essentially paper cheques
with a promise to have value, with no
actual physical gold behind the scenes to
back those promises.
Bitcoins are designed to put the control
of personal wealth back into the hands of
the individual. Instead of paper or virtual
bank balances that promise to have
value, Bitcoins are actual packages of
complex data that have value in
themselves
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