When I started this blog I really did not know much about Bitcoin or any so called cryptocurrency. I knew that there is a lot of legitimate concern about the stability of the current monetary system. I knew many people are worried and want to explore alternatives and ways to be prepared in case the current monetary system fails, there is a currency reset of some kind, or even just a sharp drop in the US dollar.
All these are clearly legitimate concerns. Highly credible people are issuing warnings all the time now that any of the above could happen anytime from very soon to over the next several years. People like Jim Rickards, Paul Craig Roberts, long time financial writer Richard Russell, Jim Sinclair (Mr. Gold), Egon Von Greyez (Matterhorn Assets), former CNN reporter Greg Hunter, and many more.
And there has been no shortage of establishment organizations issuing warnings as well including the IMF, the World Bank, and FED board members at times. So it would be foolish to just ignore all this.
It prompted me to start this blog to try and archive important quality information for myself and anyone else interested. I had always thought of hard assets like precious metals as being the alternative to fiat currencies or systemic problems. After all, they have a 5,000 year history of filling that function.
But then with new technology becoming widespread, things like Bitcoin have arisen as well. It is clear that many people (especially younger people) are attracted to this concept. They like the fact it is digital. They like the fact it is outside the present financial system. Others just think its kind of a cool new idea. And there are some mainstream entities accepting it for payment. I still think it is too early for me to tell how it will fit into the whole resolution of what happens in major monetary system change. But a lot of people are interested in it so I need to understand it too to cover all bases here.
Regardless of what the future holds for Bitcoin, today was a tough day per this article.
I don't know if this is a big problem or just a bump in the road for Bitcoin. But this article does show that Bitcoin is NOT like holding a gold or silver coin in your hand. Jim Rickards is talking about it on his twitter a lot this week. He points out that to use Bitcoins in a crisis situation you have to remember that both the electric grid and the internet have to be up and running. That may sound funny, but Jim pointed his readers to a mainstream news article about a sniper attack on a power station near Silicon Valley last year.
I understand why many people are attracted to Bitcoin and I am not interested in speaking against it. Like anything else it has pros and cons. Bitcoin could be a useful technology for people. It might inspire competition and better results for everyone. It's existence outside the system might be an attraction for some people for a variety of reasons.
You just have to be aware of possible problems too. It is still a digital item (although I think there some actual physical versions of Bitcoin). There is truth to the statement "if you can't hold it in your hand, you don't own it. This applies even to all existing paper/fiat/digital money.
And now we learn there may be a new cryptocurrency in the works that would work within the current banking system. How would people respond to that? It might be viewed as more secure and stable than Bitcoin, but it too is still a digital currency. If your internet access goes down how do you get to your money? It certainly causes you to have to think through all the factors in making personal decisions.
None of us wants to see a crisis where existing forms of money dependent on the internet, computers, electricity, or just a major banking crisis makes our money unavailable. And hopefully the odds are against it. But given all that is going on it is foolish to dismiss the possibility. So, in trying to plan and prepare, keep in mind that you probably want some assets you can hold in your hand even if you never have to use them. I plan to have some more thoughts on how to try and plan for this in some future posts.
We'll try to keep an eye on all of it. It is more involved these days than it used to be.
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