Why I think Bitcoin is good thing and our future money

In past I had a “normal” life very far from Bitcoins, but close to global corporates and banking. Even a bit close to regulation. Today it is still normal that when I tell to my old colleagues or friends about cryptocurrencies, I am getting one of the following reactions:

a) you are criminal now?
b) you are hiding taxes now?
c) are you stupid?
d) aha, tell us tell about this scam, that will disappear one day.

I hope I am not completely stupid and I am (at least a bit) not criminal. I pay taxes and do not try to hide them.  Below are few things, why I name Bicoins as a good thing and probably our future money.

Few weeks ago Vilnius (Lithuania, Baltic states, Europe) have hosted a relatively big Bitcoin conference. A Bitcoin conference with ticket for 400$, a lot of bankers and some politicians, but no online video translation. I was not participating there. But, I have seen few nice interviews related to that conference and two interviews were very interesting. Both were in Lithuanian, therefore I decided to translate and share with you some interesting extracts.

First one, is an amassing interview of Ilja Laurs on state LRT Opus radio (full version in Lithuanian there is there). For those who do not know, Ilja Laurs is “European Manager of the Year 2011 by European Business Press Association, 25 European Tech Leaders by Wall Street Journal, Top 40 most influential people in mobile communications by Informa Telecoms and Media”, founder of “Lithuanian Skype” – company GetJar. Today he is one of best know investors in Lithuania, chairman of Nextury ventures.

Note, this is not word to word translation and English is not my native language.

Why Bitcoins?

We [Nextry] are interested in Bitcoins as we see that Bitcoin industry attracts billions of USD each years. That is one of most growing industry. [Ders: That millions will definitely demonstrate result and that result will be bigger and better visible than Uber]

Old money are far from current complex virtual reality, they are not adopted and not effective. They are not suitable for new needs of virtual business, but also, not allowing governments to be effective.

What about bad guys, criminals who can do money laundering via Bitcoins, who can finance bad things, hide some illegal activities.

Governments is doing nothing and by doing nothing governments are “allowing” some bad things. Governments are not investing resources and brains into understanding and regulation. [Ders: That is known that Bitcoin transactions are not completely anonymous. Most of transactions are possible to control. As well it is possible to control exchange of Bitcoins to regular currency. Most of Bitcoin exchanges are following AML(anti money laundering) and KYC(know your customer) rules in the same way like banks or ordinary exchanges]

Second, every new technology, email, internet or nuclear technology can be used for good and for bad. Like with a hammer is possible put a nail into a wall or with the same hammer is possible to kill a person. Do we need to ban hammers? Is email bad, as one terrorist have send an email to another? The same with Bitcoins. We should not ignore, we must think and if needed control new technologies.

We cannot tell that Bitcoin is a currency of drug dealers. Cash is a much more currency of drug dealers. Cash is much more used to pay killers and finance other bad things.

We must understand, that each credit card is related at the end with real bank and currency. It is expensive to pay with credit card, payment requites to enter quite a lot of information, even it is small 5-10$ payment, sometimes money are written twice etc. Cards do not solve issue of micropayments. We cannot add card number, cardholder names etc into each lamp that will report used power and will do payment.

Bitcoins are totally different. It is electronic key, that is impossible to hack. Compare to current banknotes, you never can make “false” bitcoins.

Bitcoins are decentralized. Current money can be printed by the central bank and central banks may be affected (manipulated) by politicians and governments. Bitcoins are controlled by public, they do not have some central point which could be manipulated. Algorithm of Bitcoins is allowing an existence of only fixed amount of coins. Amount of issued Bitcoin cannot be affected by any government.

If you will look history, you will note how many times governments were not able to manage currencies. Governments are reasons of inflation, hyperinflation, governments are financing wars. Governments and politicians are corrupted, governments are allowing huge country debts, governments are printing money to finance fiscal deficits. Inflation is eating your money. You need to pay to banks, investment companies, pension funds to invest your money and save value of your money. You need to pay to a lot of third parties not to lose value of your money [Ders: I agree with mentioned term “financial parasites”].

Current payments (especially international) are very slow. It may take several days to pay from Europe to USA. It may cost you 50$ and take 3 days. We can compare sending of money from A to B as sending of an email (to send money it is about same amount of information needed). Now think if each email will move in 3 days and will cost you 50$. This is payment for nothing, for zero added value. [ders: It is just payment for that “financial parasites”]. Same applies to currency exchange which again cost you. It is not efficient to leave 10-15% of money just to finance overhead created current financial system [and finance such third parties]. In XXI century it cannot stay so. Bitcoins allow almost instant and cheap payment from any place in the world to another.

Think also about cases, when government decides to do devaluation of money and your savings becomes lower by 20-50% and governments may finance army or some utopia projects. Cryptocurrencies are limited in amount and any crazy president cannot print more of them.

May be we can simply change and adopt current money?

Ilja is giving next nice example, why current money are not adopted to current reality.

We leave in globalization time. When you sleep in Europe, Obama may tell something in USA, and his words can make an effect to rate between usd and euros. Sure, some smart financial brokers may get profit from being online. But you cannot wake up to do something to avoid loses. In opposite, if digital money are used, their value cannot be affected.

Bitcoin are also solving an inflation issue. Nobody can print more coins than allowed by the algorithm. That means, that value of each bitcoin will grow with grow of economy. Each owner of bitcoin will instantly get benefits of growing economy. People will get full benefits of growing economy, when today that benefits are partly eaten by financial sector, governments. Amount of money is fixed, inflation not possible.

Another example. Today if some money are lost, government will print new. Opposite if some Bitcoin is lost, it is impossible to restore it. So lost money will grow value of existing bitcoins and every owner of bitcoins will proportionally get benefits.

Bitcoins may lead to situation when you do not need to invest into any pension funds. Value of your bitcoins will grow automatically.

What will be if we will simply loss electricity?

We must understand that if power will be lost then even ordinary transaction in current money will get troubles. Bitcoin is at the end long number that can be represented as a barcode. You can print it and save in you safe. So, when power restored you can use your bitcoins again.

Another interview was printed in Lithuanian biggest business newspaper Verslo žinios. They met Jon Matonis, Founding Director, Bitcoin Foundation.

Some interesting points from that interview.

That is not natural that governments control money. We are just born with that fact, we are learned that way and we are thinking it is normal.

Bitcoin is like Swiss bank in your pocket.

The first asset for money laundering is USD, second is Euro. Most of 500Eur banknotes are in Spain and South America. Problem is not money, money themselves do not do bad things. Bad people are doing bad things. But bad guys are also using phones, internet and driving cars. Do we need to ban cars and internet to stop bad guys using it?

Now is very good time to buy Bitcoins. A lot depends on ISO, who is an independent organization. They should recognize BTC as currency code, same as GBP, JPY, USD. When they do that, all banking system will accept BTC as any other currency. Bitcoins will be in all computer systems. That will open doors for much wider acceptance.

Today BTC are probably most popular in gambling and XXX industries. Just that industries are very fast in accepting innovations. The same was with Paypal at very beginning. Now it is not truth anymore. Today we see much wider use of bitcoins for international payments. By using Bitcoins we do not need to sponsor monopoly of SWIFT.

Biggest Bitcoin transaction was 82.000.000USD, and payment for that transfer was just 0.04USD.

Banks will need to learn how to work in new reality. Banks try to create own blockchain without bitcoins. It is the same like attempts to create a perfume without smell. It is false attempts. It is the same if owners of taxi companies will try to create Uber, which does not need them.

That were two interview I founded interesting. I do not aim to move you to purchase of coins today or tomorrow. Just it is time to think about coming changes. As well I hope this text will require you to think, before voting ‘yes’ to ban bitcoins or naming bitcoins owners like a crazy criminals 🙂

p.s. if you decided to buy some BTC or interested how to do it simple and first time, you can look Spectrocoin web site (works nice at least in Europe)


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