The number one question today is: what are Bitcoins. Put simply, Bitcoins aren’t just an abstract financial instrument, living somewhere out there in the digital ether . They are a physical currency, with the capability of going for a ride in your pocket, or even scratching off the winning numbers on your lottery tickets.
They are modeled after the method of payment required for conducting transactions on the Silk Road, which was a series of trade and cultural transmission routes that were central to cultural interaction through regions of the Asian continent connecting the East and West, mostly due to the anonymity the currency provided, since if you can’t prove someone was using Bitcoins acquiring drugs, or something else illegal, at a well hidden website, and there is no record whatsoever of anyone making such purchases, then you can’t get caught.
So Bitcoins do have an advantage over gold in this regard, because the act of “bitcoin mining” generates a predictable, steady increase in personal supply, whereas the supply of gold grows in stops and starts. Bitcoin creation is then a little like what economist Milton Friedman called the ” k-percent rule ,” which proposes that a country’s money supply be made to grow automatically, at a steady rate, that minimizes inflation and deflation.
Stay tuned for my next article where I’ll expand on Bitcoins.