ECB Fears Bitcoin May Harm Its Reputation; Bitcoin, Cryptography & Peer-to-Peer the Way of the Future

posted by Nima

January 29, 2013 · Posted in Monetary Economics 

I’m happy to say that Bloomberg is reporting Bitcoin’s Gains May Fuel Central Bank Concerns:

Greater demand for virtual currencies could have a negative impact on the reputation of central banks, according to a report published by the European Central Bank in October last year. Since the report was released, bitcoin has risen more than 55 percent against the dollar and use of the currency has surged.

Last year I wrote:

I have bean reading and coding a lot for the past day about stuff related to Bitcoin.

I am absolutely fascinated by the concept and I think that in the long run it’ll be a successful currency.
Economically, in my opinion, it fulfills all the requirements that exist for a quality medium of exchange (limited in supply, predictable in growth, divisible, homogeneous, fungible, and sustainable)

This is either just some mad, deluded, and over-excited trip that I am on, or it is greatest challenge that the global state controlled and “regulated” money system has encountered in all of history!

I’d be surprised if over the coming years Bitcoins won’t be priced much much higher than they are now.

Furthermore, expect the driving concepts behind Bitcoin, that is cryptography and peer-to-peer validation, play a major role in the emergence of other online solutions, for example in the fields of web search solutions and social networks (Google and Facebook better watch out).

I’m now convinced that I wasn’t tripping on anything. :)

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