The Dollar Is A Barbarous Relic: The Rise of Bitcoin

[Editor's Note: The following post is by TDV Editor-in-Chief, Jeff Berwick]

John Maynard Keynes once stated that “gold is a barbarous relic”.  He much preferred currency that was controlled by a small group of bearded men in secretive boardrooms who “managed” paper money that was ordered by law (force) to be used by the citizens of a geographical region.

Whether or not you agree with Keynes (I certainly don’t) what you do have to admit is that Bitcoin is making the Federal Reserve Note (FRN), a.k.a. the US dollar, look like a barbarous relic today.

The state and its physical manifestation of government are themselves barbarous relics in that they are truly holdovers from mankind’s barbaric past. And the tools they use — like paper news sources and paper money — are so archaic it’s embarrassing. The digital world is where freedom is blossoming and digital, decentralized currency, particularly Bitcoin which is the first of its kind, is on the cutting edge of both this progress and this liberty.

Over the weekend, the price of Bitcoin reached $900, before correcting all the way to about $500. Overnight, the price climbed back up to $600.

People contest the dynamism of Bitcoin, and protest that this volatility is one reason why they ought to stay away from Bitcoin. And, in a way, they are right. The technical know-how needed to use Bitcoin very well might mean it is not ready for mainstream reception.

But, when it is ready in 2-3 years, as today’s kids, who have grown up in a sea of digitality, are attracted to the decentralized crypto-currency. At that point, the price of Bitcon might already be $10,000 or more. Where could it possibly go thereafter?

You will be shocked where Bitcoin is in 2-3 years, which I stated to Stuart Varney on Fox Business last week.

My point couldn’t have been made any better than Varney himself did when he said that he had just bought his first smartphone. People like him are years behind the curve, but they will eventually figure out whate we are talking about here. 

In 10-15 years, if things go well, Bitcoin will be real money, accepted worldwide and it will be worth the equivalent of $1 million in today’s dollars (and, of course, the dollar wouldn’t be anything but a bad memory then). Where do I get the $1 million figure from? Well, there are many ways to attempt to calculate the value of a Bitcoin but if you make the assumption that in 10-15 years Bitcoin is a worldwide used currency, much like the US dollar is today, then all you need to do is look at the total dollar value of US dollars outstanding (which depending on your method of calculation could be anywhere from $4-12 trillion) and divide by the total amount of Bitcoins outstanding. Let’s use the $12 trillion figure, for ease of use, and let’s assume there are 12 billion bitcoins outstanding in 10-15 years, also for ease of calculation. That number works out to $1 million per Bitcoin.

Lawmakers are confused about the new technology, and have raised many questions about whether or not it should not be regulated. It already is regulated for all intents and purposes, but they wonder if it should have additional regulations tied to it.

When federal agents seized and shut down the original Silk Road during the government shutdown, the Bitcoin price began to rise from its price point of $120. The recent tone of a Senate hearing on Bitcoin has certainly done away with Bitcoiners concerns. It seems that the federal government won’t regulate it into oblivion (read: moreso than other industries), but it still could be that some states will do this. Therefore, there might be an exodus in the future of Bitcoiners from Bitcoin-antagonistic states to Bitcoin-friendly states. We recommend they just get themselves and their bitcoin’s (and their gold) out of dodge.

The Washington Post has even stated that Bitcoin needs a central banker! “What this coin needs is a central banker to manage its supply,” The Post writes.

The author there doesn’t understand that Bitcoin already has the equivalent of a “central banker.” It is called math. Science has brought us to the forefront of money. There’s no reason to go back into the monetary dark ages.

The Dollar Vigilante has been on the cutting edge of covering the Bitcoin price. We covered it first during its price rise to $30 in 2011 in the blog, and we have covered it extensively since in our newsletter with articles from myself, Gary Gibson, and Bitcoin industry insiders like Justin O’Connell.

Our Bitcoin coverage has been part of a portfolio that has had convincing accuracy since its inception. We made gold a major part of the TDV portfolio in 2010, when it was $500, before advising our newsletter readers to go heavy cash. Our analyst Ed Bugos has been outspoke advocate of gold since $250.

We still believe Bitcoin has a long way to run. The infrastructure has proven itself more capable this time around. Whereas in the past during Bitcoin price increases popular exchanges like Mt. Gox and others have gone down under duress of DDoS attacks, this time around all the main exchanges have remained online.

Investors and hedge fund managers have now seen that Bitcoin is seriously here to stay. The mania that will come from this will create countless new opportunities in the Bitcoin area. I am afraid if you have not started in on the Bitcoin world, you’ve missed the crest of the wave.

But, it’s not too late. You might still be able to paddle in. Let the Dollar Vigilante get you caught up on the most revolutionary technology the world of finance has ever seen.

Anarcho-Capitalist. Libertarian. Freedom fighter against mankind’s two biggest enemies, the State and the Central Banks. Jeff Berwick is the founder of The Dollar Vigilante, CEO of TDV Media & Services and host of the popular video podcast, Anarchast. Jeff is a prominent speaker at many of the world’s freedom, investment and gold conferences as well as regularly in the media including CNBC, CNN and Fox Business.

I don’t know about you, but that comment from the Washington Post writer made me reach for a stiff drink. So I figured it was a good time for me to serve up this shot:

Needs a central banker? Ha. Ha! Talk about missing the point. Bitcoin’s raison d’être is that it is not a centrally-controlled currency backed by government force. It mimics commodity money whose supply can only be increased with capital (and private) investment and which is ultimately limited. The supply is mathematically limited, just like gold and silver’s supply are physically limited. Bitcoin-holders don’t have to worry about some central banker slowly stealing their purchasing power by increasing the supply of the currency their forced to use! 

Ugh, it’s a good thing that traditional print media is going the way of centralized paper currencies. It’s long past time for the world to move on from these relics. This just underscores why you should look for your news and advice from alternative sources, like our very own financial newsletter. Like Jeff said, we were ahead of the curve on Bitcoin as well as various gold plays. Our readers are getting rich because they are getting advice fit for the freer, digital world that is rapidly becoming dominant. Click here to learn more and get started. Don’t miss the next big thing. Sign up for TDV’s newsletter now. 

Regards, 

Gary Gibson
Editor, The Dollar Vigilante

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