I have good news for the reader: I have solved the problem of financing pensions in ageing societies. The plan requires a minimum of one-time precautionary saving. Let’s save a single dollar for pensioners of the future! Even today’s stressed Hungarian budget will accommodate this. Let’s keep the money in a risk-free, interest bearing investment until the interest earned on the collected amount is sufficient for the continuous payment of pensions.
There are several indications that Bitcoin is increasingly important to China. It is possible to buy Bitcoins on numerous Chinese exchanges, and the volume on them is growing rapidly, to the extent that on some days last week BTCChina was the exchange with the largest volume, in yuans! Trading in BTC against the dollar is being toppled from its throne, which is a pretty big turnaround.
In connection with the closure of Silk Road and the arrest of its owner, the FBI announced that it has seized more than 26,000 Bitcoins (worth around 3 to 3.5 million USD). That’s a pretty hefty sum. Since Bitcoin transfers are public, the internet crowd set about searching for the wallet where the FBI is holding the confiscated amount. They managed to find it, because on 2 October, the day that the FBI swooped, the exact amount in question was transferred to that wallet from several thousand other wallets.
Silk Road is the leading online drugs marketplace. It’s entirely public on the Deep Web, yet untraceable. Or at least that was the case until last week, when the FBI finally managed to arrest a 29 year-old man suspected of running the site, which has now been blocked. Approximately 26,000 Bitcoins were also seized (currently worth approx 3 million USD), suspected to derive from the revenues of Silk Road. So what happened? Can the users of the Tor network, which enables access to the Deep Web, be traced after all? Is Bitcoin not in fact anonymous? It seems that’s not the problem.
In April 1986 an experiment was performed in a Soviet nuclear power station. We all know what happened next: the experiment went wrong and the most serious nuclear accident to date ensued. As tends to be the case, the unfortunate development of several independent factors played a role in the disaster occurring. It was a combination of conspiring factors.
Another decrease in utility prices lies ahead in Hungary, while Hungarian investments in the energy industry are lower than they have been for many years. The link is clear: it isn’t worth investing in a place where you can’t make money. There are few opportunities to make money since all kinds of extra taxes have been levied on the sector and the utility price reduction is causing revenue problems. But is that such a big problem?
Currently we are witnessing the “gold rush” era of decentralized virtual money. Bitcoin was only recently invented, and while it’s possible to sense its significance, exactly for what purpose and how the technology will be used are still rather unclear. Bitcoin infrastructure is taking shape now, and businesses and institutions based on it are being developed. That’s a rocky road, since everything is new, unregulated and undeveloped, and it’s not even clear what direction things should take. Companies that position themselves well now and are smarter than the others or are better at predicting what direction it will take stand to make a massive profit, while many will fail. We can get an inkling of such potential failure from the current pricing of Bitcoin. Below I’ll explain what I mean.
In my opinion, and based on what I wrote in my previous posts, those who dismiss the Bitcoin fever as a typical speculative bubble, as experienced time and time again throughout history, are mistaken. The difference is that Bitcoin is a brilliant invention, the like of which the world hasn’t seen before. It’s a unique thing, which means the outcome cannot be predicted.