Bitgold, Bitcoin, Bit-dollar, and Bit-Hayek!
All the new cryptocurrencies (and pseudo gold units) are really simulated currencies which derive their ‘value’ from the ‘dollar’. None of these currencies will survive the coming crash in our digital dollar. None should be viewed as ‘money’. They are mere simulations which will last only until our cyber ‘dollar’ crashes. Let’s review again the nature of these new virtual currencies (supposedly backed with gold or an algorithm). At first blush I thought the new Hayek coin was a real coin minted from gold. It now appears from recent articles which I have read that this new currency unit will be a cryptocurrency. What is a cryptocurrency?
Cryptocurrency: a digital currency in which encryption techniques are used to regulate the generation of units of currency and verify the transfer of funds, operating independently of a central bank.
1. Bitgold: merely a payments system using physical gold. Bitgold uses a software platform which is digital to keep its records. What I do is purchase physical gold (in dollars) and then store this physical gold in the trustee firm. I then can exchange and use this Bitgold unit (valued in dollars by physical weight of the gold) in a similar manner as my debit card. The unit, however, gets its ‘value’ from the valuation of my physical gold (in terms of dollars). As the dollar ‘price’ of gold fluctuates in our cyber markets I can purchase and exchange this unit (a weight of physical gold) based on its ‘value’ in terms of dollars. This is NOT a real physical currency and if our cyber ‘dollar’ crashes, this Bitgold unit could go to zero (in official dollar value). People are mostly deceived about the reality of this unit! What is one Bitgold unit worth when our official dollar is eliminated from our cyber markets? Ans: We would be back to Barter and the ‘value’ of this unit would be zero (in dollar terms)!
What I do is purchase physical gold (say ounces) and then convert this gold into dollars when I desire to trade or exchange this currency! This unit is ‘valued’ in $$$$! I can use a debit card with this unit (but ‘value’ is determined in American dollars)!
2. Bitcoin: merely a cryptocurrency as defined above. This digital image (called Bitcoin) within our computer screen is really imaginary and then exchanged based upon a coded Algorithm (which determines the supply of the units which can be circulated/issued). The computer Algorithm sets the maximum supply of Bitcoins which can be created. This unit is also ‘valued’ in terms of a valuation via ‘dollars’. Each Bitcoin acquires a ‘value’ (in dollars) and then is traded, exchanged, recorded for its current ‘dollar’ value. This is also a simulated currency unit which will NOT last if our official digital dollar crashes. The unit can work for a time period but ultimately it is useless and worthless.
Bitcoin is a virtual IMAGE within the computer screen. It gets its ‘value’ from our official American dollar (via a daily valuation within our real-time markets)! This is not real money! It’s a simulation! It will become worthless when our ‘dollar’ crashes!
3. The Bit-Hayek: originally I thought this unit would be a minted coin. It now appears from recent publications that this will also be a ‘cryptocurrency’ (as defined above). This means that this unit will be digital and similar to Bitgold and Bitcoin. What I do is purchase these digital coins (under the image of a one gram unit of physical gold) and then ‘value’ this digital coin (in dollars). The physical gold is divided into units of grams (with each gram getting a ‘value’ in terms of our official dollar). This is similar to Bitgold in that physical gold is stored in a warehouse or similar and then each gram of physical gold is given a current ‘value’ (in terms of our official dollar). This is NOT a real currency and it also will become worthless when our official dollar crashes!
The Hayek is also a cyber currency (based upon physical gold for its ‘value’)! This cryptocurrency will eventually become worthless when our official American dollar crashes! It appears real (as it is based on real physical gold). It’s ‘value’, however, is based on our American Dollar! When our ‘dollar’ crashes this coin goes to ZERO!
4. Bit-dollar: this is our official American currency unit today. It is a digital unit (mostly) as only some 4% of all dollar units in circulation are now paper notes. The 96% of our dollar transactions are now accomplished with our digital/cyber dollar. Think of your credit card and your mobile smart phone payments as representative of our current official cyber/digital dollar. We should call our official American dollar by the ‘name’ Bit-dollar (as this unit is imaginary and within our computer screen). Pixels of light create this unit within our computer screen. We trade and transact with this unit as if it were money. In reality, this unit is a mental abstraction and/or a unit of consciousness. When our markets crash (now in the near future) this unit vanishes into our money/heaven consciousness!
The official American dollar is now a Cyber unit! This digital unit will eventually crash and when this happens this unit goes to ZERO!
The only real currency units from history are the minted silver dollar and the minted gold dollar. These units are real and physical. Our Congress created a ‘value’ for this dollar with an Official Definition. See the Coinage Act of 1792. The original official definition was: 1 dollar = 371.25 grains of silver or 24.75 grains of gold. This dollar was used from 1792 until its demise in 1934 (domestically) and 1971 (internationally). If you desire to have a representation of this unit for history, buy an American Silver Eagle Dollar from a MINT. I buy from a mint (representative) out of Dallas, Texas. Enjoy and have a good day! I am: https://kingdomecon.wordpress.com.