It's money that matters
Welcome to this week's Reno News & Review.
I learned a lot about Bitcoin while doing the cover story this week, so I decided to buy some. This is low-cost risk, nowhere near what I had stolen by the banksters with the whole engineered collapse of the economy a few years ago.
You know how a pyramid scheme works, right? The people at the top of the pyramid get rich, but the people at the bottom lose their money. When I first started looking at Bitcoin, I was thinking this was like that—limited supply with demand generated by media hysteria increasing value for the early adopters. But in this one, there is no minimum investment; it's all based on percentages. So if I lose half my $11 buy-in, I still have the exact same percentage of a bitcoin. Unless the whole thing goes away—which it might—I will always have the potential to get all my money back.
And even though the numbers of participants seems huge, it's nothing compared to the potential if Bitcoin should go the way it could go. And increased participation increases stability but doesn't necessarily drive up the price. This is just the sort of thing that totally sends me down geeky rabbit holes.
One of my sources in the story made another point about Bitcoin: While greed and speculation fueled the hysteria that drove the price up a few months ago, that enthusiasm also prevents people from pulling out when there's an “adjustment.” That creates the stability that will allow people with unstable governments to keep the wealth they've earned without losing it to local forces like inflation.
Sure, people have used the currency to buy bad stuff. It would be a pretty useless currency if it couldn't be used to buy drugs, guns—whatever the person wants to buy. In fact, expect to hear of a lot of takedowns like Monday's of Charlie Shrem. It's a simple formula: The powers that run the financial sector also influence our government, so you can expect them to try to undermine the competition and to prosecute crimes that they don't prosecute in the traditional financial industry.