Bitcoin has been called "electronic gold," "synthetic money" and
a "crypto-currency." Big name investors, the public and
startup companies have fueled bitcoin fever along with
speculation about its future.
On Mt. Gox (no relation to Mt. Rushmore), the second largest
digital currency exchange by volume, bitcoin prices topped $1,000.
That's a ten-fold increase from April, when bitcoin prices broke
$100. The S&P 500 (NYSEARCA:IVV) and Dow Jones Average
(NYSEARCA:DIA) aren't the only benchmarks hitting all-time
Blogger Phil Carney describes the mania this way:
"The bitcoin currency is decentralized therefore not
controlled by any one person and so offers protection from the
endless rounds of Central Bank money printing. This assists the
promoters of bitcoin in peddling the fallacy that it offers a
safe haven away from invasive government spying, and of course,
those evil parasites they refer to as the 'banksters'
If world governments can't dilute or deflate the value of
bitcoin, is there anything else that can? The answer may surprise
Inventors of competing digital currencies are plentiful and are
already seeking to dethrone bitcoin. And they may succeed.
The list of bitcoin competitors and alternatives grows by the
week, here are just a few:
Moore's Law and Bitcoin
In 1965, Moore's law was introduced by Intel co-founder Gordon E.
Moore to explain how in the technology world the number of
transistors on integrated circuits doubles approximately every two
years. Yet, despite the constant improvement in chip processing
power, the cost of computer hardware has consistently decreased
What's the point?
Although bitcoin's fan base calls it a "currency," referring to
bitcoin as a technological solution is probably a more accurate
description. And as technology improves, "the cost of a unit
decreases exponentially over time," says Moore's law.
Think about it this way: If Moore's law has proven to be a
reliable indicator in an established marketplace like
semiconductors, what about the jungle-like world of
Regardless, bitcoin is still being pitched as an alternative to
the U.S. dollar (NYSEARCA:UUP) and even to long-established assets
like gold (NYSEARCA:IAU) and silver (NYSEARCA:SLV).
In the end, Bitcoin's ultimate worth will be challenged by new
and improved digital technologies that are faster, easier to use,
and even more secure. Just wait.
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