Despotism on the Internet: the Involvement of Central Banks and the Bitcoin Market Crash

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  • Published : April 24, 2013
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Tori McDonough
4/18/2013
WR 122
Word Count: 2,042
Essay One
“Despotism on the Internet:
The Involvement of Central Banks and the Bitcoin Market Crash”
Who would have ever thought that a virtual make-believe form of currency used solely on the internet with no practical purpose could cause such a disturbance for the Federal Reserve System of the United States? Believe it or not, this hypothetical story is no dreary political fairy-tale; it is an actual account of events that is currently taking place between America’s central banking system and individuals who currently own pieces of this digital currency, known as bitcoins. In his article titled “How the looming bitcoin crash will be exploited by globalists to outlaw decentralized crypto currencies”, author Mike Adams uncovers the arcane link between these two entities and ultimately reveals the central banks’ plot to eventually criminalize the bitcoin. Adams’ is correct in his predictions, as supported by his next article “Bitcoin crashes over 50% just one day after bold prediction by Mike Adams of Natural News”. The author’s predictions support the conclusion that the Federal Reserve System of the United States is on a pursuit to destroy the value of the bitcoin in an attempt to, ultimately, criminalize them overall.

To even begin to try to understand this connection, one must understand what a bitcoin truly is. Bitcoins, as defined by PCMag.com, are, “…an untraceable, peer-to-peer digital wallet system introduced by Satoshi Nakamoto in January 2009.” The article continues to explain how bitcoins are generated: “…they are created by users in their own computers with a Bitcoin ‘miner’ application. Bitcoins can also be bought and sold for real money at a Bitcoin exchange.” Also, it is crucial to understand that bitcoins tend to have an appallingly low velocity in the marketplace. “The circulation of a currency is classically known as velocity; the higher the velocity, the more frequently the currency is being routinely used for transactions” (Adams, “How the looming bitcoin crash will be exploited…”). This low level of velocity, accompanied by the number of bitcoins that exist digitally (approximately 6 million, as suggested by PCMag.com) indicates that a majority of the people who are purchasing this virtual currency are not spending them, but sitting on them as if to see if their values will rise. Adams describes this phenomenon as bitcoins being “a speculative vehicle for gambling” (“How the looming bitcoin crash will be exploited…”). While the idea of owning and trading bitcoins seems like a harmless pastime, the central banks of the United States, unified under the Federal Reserve System, view the idea as harmful.

One might wonder, “Why would the central banks of the United States be so concerned with the growing popularity of the bitcoin market?” The answer to that question is rather simple: it prevents the Federal Reserve System from regulating and controlling the movement of all financial capital around the world. Adams’ explains in his article “How the looming bitcoin crash will be exploited…” that, “Bitcoin, in fact, threatens the very foundation of monetary control that underlies all the corrupt governments of the world.” The Wikipedia article “Federal Reserve System” explains that this system “has both private and public components, and was designed to serve the interests of both the general public and private bankers.” Therefore, the presence of bitcoins directly affects the system’s ability to control monetary flow around the country, leading the private bankers to extreme actions in order to preserve their own money in their pockets. Due to the fact that the existence of this digital currency disrupts the status quo put in place by the twelve major banks that comprise the Federal Reserve System of the United States, it is logical to assume that the bitcoin currently is and will continue to be a major focus of legislative and judicial...
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