Bitcoin Businesses Are Showing Up Everywhere

June 27, 2013 by Liberty. I’ve discussed Bitcoins with significant hesitation in the past. As a rather new technology, there can be alot of hesitation in trusting them with a significant amount of money but I’m liking the signs Bitcoin is giving off more good signs everyday. My confidence is slowly growing and I’m excited to see what this new cryptocurrency can do for the free markets around the world.

Bitcoins are a virtual currency that develops it’s scarcity from algorithms and limitations in technology. While the dollar can be printed by the US government on demand, no centralized agency can create more Bitcoin without actually working to develop it.

One of the things that makes Bitcoin so amazing is the confidence that people are showing in it. There was a time when currency could only be made with real valuable commodities. Even the American government dollars used to be backed by the gold standard. Today, just about every currency is a confidence based currency. By that I mean, dollar bills have no inherit value. There is no scarcity for paper with ink on it. You can’t eat it and anyone can print it (theoretically). At least with the gold standard you could exchange the money for a certain amount of gold. Today there is nothing backing the dollar up except the confidence people have in the dollar.

The only thing that might be backing the US dollar is nuclear weapons and other advanced military technology. At any point, the rest of the world can lose faith in the dollar and almost everyone in America would become broke.

Bitcoins don’t have a military backing them up. Bitcoins only have technology protecting them. They have no inherent value. At any point the Bitcoin market could lose the confidence of it’s investors and collapse but… it doesn’t look like it will. - Read more here: http://libertarianmoney.wordpress.com/2013/06/27/bitcoin-businesses-are-showing-up-everywhere