I am also closely watching how bitcoin is reaching unprecedented levels of speculation making tulips look like just a minor bubble. You know you are witnessing a speculative bubble when everyone is talking about it so I'm interested to witness what will happen next.
So I read there will only ever be 21 million bitcoins minted, so there is a finite supply that apparently won't be increased. So far, in an attempt to create an artificial scarcity by the anonymous creators are controlling the release of bitcoin to create demand.
But unlike tulips, possibly the first financial bubble to implode, there is no physical actual bitcoins you attain, instead they are purely a electronic transaction although people are willing to trade bitcoin for actually currencies, goods or merchandise.
So crypto-currencies are both a payment system and a currency of sorts, yet are not backed by a standard such as gold or other precious metal. Instead bitcoin is a decentralised currency that is not associated with any country or bank.
So crypto-currencies are both a payment system and a currency of sorts, yet are not backed by a standard such as gold or other precious metal. Instead bitcoin is a decentralised currency that is not associated with any country or bank.
This is a peer-to-peer payment system and not supported by an economy as national currencies currently are or as gold once backed national currencies.
Previously national currencies were once backed by the gold standard under the Bretton Woods agreement implemented directly after the second world war. Although, that policy was repealed when American President Richard Nixon ended the convertibility of US dollars to gold in 1971 in a series of economic reforms.
The argument is that as an economy grows so should the currency in circulation. The gold standard acts as a brake and limits economic growth with monetarists arguing that recessions are created by limits to money supply.
I'm expecting bitcoin to go higher in the short term as demand soars as supply is set with people willing to apparently purchase at any price. I am also waiting for the implosion that follows every speculative bubble and this speculative bubble won't be any different.
Previously national currencies were once backed by the gold standard under the Bretton Woods agreement implemented directly after the second world war. Although, that policy was repealed when American President Richard Nixon ended the convertibility of US dollars to gold in 1971 in a series of economic reforms.
The argument is that as an economy grows so should the currency in circulation. The gold standard acts as a brake and limits economic growth with monetarists arguing that recessions are created by limits to money supply.
I'm expecting bitcoin to go higher in the short term as demand soars as supply is set with people willing to apparently purchase at any price. I am also waiting for the implosion that follows every speculative bubble and this speculative bubble won't be any different.
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