‘Challenging the dollar’: Bitcoin total value tops $1 billion

Bitcoins (Image from bitcoinworld.blogspot.ru)

Already bigger than many sovereign currencies, Bitcoin has broken the $1 billion in value mark this week. In the wake of continuing economic crises and liquidity shortages, this new virtual currency is poised to challenge the euro and US dollar.

By not being tied to any particular financial institution and
independent from world governments, Bitcoin will become a safe
haven for anyone trying to save their money from the crippled
international banking system, claimed Max Keiser, the host of RT’s
Keiser Report.

“It is inevitable that Bitcoin will become a multi-trillion
dollar enterprise because every other currency in the world is tied
to dying central banks that are encumbered with impossible-to-pay
debts and bankrupt counter-party risks,”
Keiser said.


Bitcoin emerged in 2009 amid the global financial meltdown. The
digital currency was created by someone who identified himself as
Satoshi Nakamoto. It is based on open-source software, and uses
peer-to-peer connections for monetary transactions to avoid
centralized authorities.

Bitcoin aims to provide safe and secure exchange by verifying
transactions with encryption that is used in military and
government applications. And unlike bank services, the Bitcoin
network is free, except for a voluntary to speed up transaction

Issuance of the currency is completely automated, with 25 new
bitcoins generated every 10 minutes; inflation is set to be halved
every four years, until a total of 21 million bitcoins is reached.
In theory, the currency would not lose its purchasing power unless
individuals and businesses refused to use bitcoins.

With numerous financial companies already exchanging bitcoins
into any of the world’s currencies, the founder of the Swedish
Pirate Party, Rick Falkvinge, estimated that Bitcoin could capture
between 1 and 10 percent of the global foreign exchange market.
This implies that the price of each and every bitcoin would rise to
between $100,000 and $1 million, Max Keiser explained.

“I have stated that myself,” Keiser said. “I think
bitcoin’s price will reach $200,000 per bitcoin before Warren
Buffett’s Berkshire Hathaway’s stock.”

Ten years ago, few predicted that Facebook would have more than
1 billion users worldwide/ By the same token, few today imagine
bitcoin could take on the G20 nations, but Keiser believes this may
soon take place: “Bitcoin’s valuation, already bigger than many
sovereign currencies, will challenge the most-traded currencies
today, including the US dollar, the euro, the yen and the

Image from Flickr.com/zcopley

Regulatory hand reaches out

Because the virtual currency bypasses authorities and cannot be
taxed unless the person deliberately reveals his transactions,
 the US government and the Treasury Department are seeking to
enact stricter regulations and new money-laundering rules.

It is difficult to predict this new policy would play out:
Patrick Murck, a legal counsel for the Bitcoin Foundation, a trade
group promoting industry standards, said the framework “would be
infeasible for many, if not most, members of the Bitcoin community
to comply with.”

Keiser believes that Bitcoin users and the currency itself have
little to worry about, unlike most of Internet startups feeling
themselves suddenly vulnerable to government oversight. Bitcoins
are not issued by a central body, and rely on a network of
verification nodes to regulate transactions; in the future, Bitcoin
users may achieve enough political clout to defend itself in
traditional arenas.

“As Bitcoin’s price increases, the new Bitcoin millionaires
and billionaires will use their economic clout to rewrite laws in
favor of Bitcoin, the same way banks like JP Morgan or Goldman
Sachs lobby government to write laws that favor them,”

Web 3.0?

Bitcoin could also offer relief to debt-stricken countries such
as Cyprus. “Cyprus was Bitcoin’s ‘come to Jesus’ moment and it’s
fitting it happened around the Easter Holiday,”
said.“For millions of people around the world who have been
victimized by banksters and their corrupt politician friends, the
light bulb went off and they suddenly realized they could save
their wealth by parking it in Bitcoin and no government or bankster
could stop them.”

After the initial rush of interest in the Internet in the
mid-1990s, and the follow-up boom of Web 2.0 and the growth of
social networking, Bitcoin is the third and “perhaps the most
disruptive wave of all,” Keiser said.

“This is Web 3.0,” he said. “For me it’s extremely
exciting since I pioneered the idea of virtual currencies back in
the mid 1990s and have four US patents in my name covering virtual
trading and virtual currencies. Most people I talked to back then
about these ideas and the possibility that something like Bitcoin
could exist didn’t think it was possible. They were wrong.”

Source Article from http://rt.com/news/bitcoin-challenge-dollar-currency-121/

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