After the ECB left Cyprus with
no cash, Bitcoin value just kept growing. But can we trust this digital
currency?
The newspapers of the last days show the images of a boat stuffed with
Euro cash reaching the coast of Cyprus. The army is defending the harbor and
soldiers guard the entrance of the banks. In a few days, Europe managed to
leave a member of its Euro community in a complete state of desperation.
Foreign capital left the country through dubious detours and people have just
enough money for a piece of bread. If ever there was a sense of solidarity
between EU members, this is fading away.
The Euro is a centralized currency where the supply side is controlled by
the ECB to achieve stability of the currency value. The austerity programs that
have been introduced in almost all European countries should lower government debts
and discourage inflation pressures in Eurozone.
But if ECB is putting all its effort to keep inflation under control, it
forgot that a currency needs trust to survive. Cyprus may be a peculiar case.
It is a country political divided between Greece and Turkey where Russian
capital found its tax haven. Despite this, Cyprus became an example for many
people, in Europe and outside, that a centralized currency has its Achilles
heel. The monetary network providing money to Cyprus stopped working, leaving
its citizens with little or no cash to spend.
But how can we defend our savings if banks cannot be trusted? The traditional
way to keep capital from depreciation is buying silver of gold. It is not a
surprise that silver and gold increases its value in economical crisis time.
The last month, however, the market discovered another possibility. Bitcoin,
the virtual currency, showed up into financial news with an incredible growth.
In other words this virtual currency is winning the confidence of people
worldwide.
However, why should we trust
Bitcoin, if we cannot even touch it? Bitcoin doesn’t have a centralized bank
system. In this way Bitcoin can use the whole internet network to move from
place to place. A network as internet is nearly impossible to put down. With
the use of an encrypted “wallet” Bitcoins can be kept safe from thieves and
hackers. With an expanding system of users, you can buy and sell Bitcoin in a
very simple way. That enables you to reach your capital wherever you are. And
finally, a very important property: Bitcoin is really anonymous: your
mother-in-law will never know how much you’ve got in your “wallet”.
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