Why Is Bitcoin a Big Deal?

Centralized banking and all other forms of intermediary rentier skims are presented as solid. If history is any guide, these supposedly solid entities may well melt into air.
Why is bitcoin considered such a big deal? Why has it grabbed so much mind-share, and why is it skyrocketing? And why is the cryptocurrency sector going bonkers? The short answer is that cryptocurrency is the first major innovation in money in 300+ years, back when central banks first emerged in the late 1600s as centralized clearing houses for international payments and sole issuers of national bank notes/currency. (Those who trace central banking to the Bank of Amsterdam’s founding in 1609 might say it’s the first major innovation in 400 years.) Why is it an innovation? There are four basic reasons: 1. It’s a form of private-sector issued money. It is not issued or controlled by any government or central bank. 2. It is structured in a completely different manner than conventional central-bank issued currency: it is a digital form of money that is issued as payment for those who maintain the database (the blockchain) on their privately owned computers. Since the blockchain is distributed over numerous computers, it is decentralized and distributed rather than centralized.

This post was published at Charles Hugh Smith on MONDAY, OCTOBER 30, 2017.