Payments

09:45 AM
Bryan Yurcan
Bryan Yurcan
Commentary
Connect Directly
Facebook
Twitter
Google+
RSS
E-Mail
50%
50%

Has Bitcoin Finally Arrived?

A New Hampshire state representative recently added a donation option on his website to accept the digital currency.

Advocates of Bitcoin were surely elated to hear the virtual currency has gone mainstream -- at least a little. New Hampshire state Representative Mark Warden, a Republican, announced recently that his campaign is accepting Bitcoin donations.

The campaign has this to say about the e-currency:

"This is a cutting-edge technology that is market based, voluntary, and extremely innovative. I have constituents and vendors who prefer this medium of exchange, so it’s natural to want to respond to the marketplace,” said Warden.

Bitcoin allows users to make transactions with an alternative, decentralized form of currency that is not subject to the inflationary whims of the Federal Reserve or other central banks."

Bitcoin enthusiasts are usually very vocal about its value of not being associated with any central bank. It has steadily gained popularity since its release in January 2009, but it's not all positive news. According to one report while the number of Bitcoin transactions per day has increased roughly 400 percent since May, there have also been an increased number of "Madoff-esque" ponzi schemers luring Bitcoin users with "High Yield Investment Programs." In many ways, the increasing presence of Bitcoin scammers is even better proof of its potential mainstream acceptance than any politician's announcement.

Bryan Yurcan is associate editor for Bank Systems and Technology. He has worked in various editorial capacities for newspapers and magazines for the past 8 years. After beginning his career as a municipal and courts reporter for daily newspapers in upstate New York, Bryan has ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
Patriot
50%
50%
Patriot,
User Rank: Apprentice
9/4/2012 | 10:05:58 PM
re: Has Bitcoin Finally Arrived?
-

Central Banks , became net buyers of gold in 2009. In 2011 they bought 440
tonnes. Central banks continued to buy gold; net purchases recorded during the
first quarter, 2012 amounted to 80.8 tonnes, accounting for around 7% of global
gold demand. Central banks from a diverse group of countries added to the
overall holdings of the official sector, with a number of banks making sizable
purchases.

After having already purchased ten tonnes of gold so far this year, the
National Bank of Kazakhstan said it plans to purchase an additional fifteen
tonnes this year and as much as seventy tonnes per year in 2013 and beyond.

"Nineteen fifty-eight marked
the first year in which foreign central banks exercised their convertibility
rights in significant amounts and returned their dollars for gold. US gold
reserves fell 10% from 20,312 metric tons to 18,290 that year. The US
made it abundantly clear stopping the drain of its gold reserves, and the
depreciation of its currency against gold, was a huge priority. Ultimately ir
removed the right to exchange dollars for Gold

Since 1913 the US dollar has lost over 95% of its purchasing power while
gold has gone from US$20 an ounce to currently over US$1600.00 per ounce in the
same time frame When people catch onto the fact that all government statistics
are so massaged as to be useless, and actually start to think about how much
more they are paying today over yesterday for the necessary everyday items they
need to get by, than they will start to understand why gold is so important to
a sound monetary system Continuing low interest rates, combined with higher
inflation rates will equal low to negative real rates of return causing
continued demand for gold which is being bought with dollars. The worldGs
continues to dispose of dollars and buy gold. China
has imported more gold in six months than PortugalGs
entire gold reserves

China
continues to do one thing. Buy. Because while earlier today we were wondering
(rhetorically, of course) what China is doing with all that excess trade surplus
if it is not recycling it back into TreasuryGs, now we once again find out that
instead of purchasing US paper, Beijing continues to buy non-US gold, in the
form of 68 tons in imports from Hong Kong in the month of June. The year to
date total (6 months)? 383 tons.- ( at
current prices a ton is about $51.78 milliondollars) In other words, in half a
year China, whose official total tally is still a massively underrepresented
1054 tons, has imported more gold than the official gold reserves of Portugal, Venezuela,
Saudi Arabia, the UK, and so on, and whose YTD imports alone make it the 14th
largest holder of gold in the world. Realistically, by now China,
which hasn't provided an honest gold reserve holdings update to the IMF in
years, most certainly has more gold than the IMF, and its 2814 tons, itself. Of
course, the moment the PBOC does announce
its official updated gold stash, a gold price in the mid-$1000 range will be a
long gone memory.

Here is the latest breakdown of gold reserves by Top 20 countries via the
WGC:

-

World Offical Gold Holding

-

1 United States
( down from 18,290 mtins in 1958) to 8,135.5 tonnes

2 German------------------ 3,395.5

4 Italy----------------------- 2,814.0

5 China------------------- 1,054.1

6Switzerland------------ 1,040.1

7 Russia-------------------- 918.0

9 Japan--------------------- 765.2

10 Netherlands---------- 612.5

11 India-------------------- 557.7

12 ECB---------------------- 502.1

13 Taiwan------------------- 422.7

14 Portugal----------------- 382.5

15 Venezuela--- -------------365.8

16 Saudi Arabia------------- 322.9

17 United Kingdom-------- 310.3

18 Lebanon-------------------- 286.8

19 Spain------------------------- 281.6

20 Austria---------------------- 280.0

The traditional unit of weight for precious metals and gems.

1 troy ounce = 31.1034768 grams.

-

32.15 troy ounces = 1 kilogramme (Kilo)

32,150 troy ounces = 1 metric ton (1,000 kilos) at $1,600 per troy ounce =

51,780,000

1000 troy ounces = 31.1 kilograms

The world continues to sell Dollars and convert them into gold to escape the
inflation caused by QE

Total US
debt as of 2010 when all liabilities are included $202 trillion dollars

Existing US Gold about 152 billion dollars

If a new gold backed currency were issued. Each $206 dollars of outstanding FRNGs
would buy one new gold backed dollar.

-

If Congress wonGt abolish the Fed. The world might abolish the dollar

The traditional unit of weight for precious metals and gems.
1 troy ounce = 31.1034768 grams.

32.15 troy ounces = 1 kilogramme (Kilo)
32,150 troy ounces = 1 metric ton (1,000 kilos) at $1,600 per troy ounce =

51,780,000
1000 troy ounces = 31.1 kilograms

The world continues to sell Dollars and convert them into gold to escape the
inflation caused by QE

Total US
debt as of 2010 when all liabilities are included $202 trillion dollars

Existing US Gold about 152 billion dollars

If a new gold baced currency were issued. Each $206 dollars of outstanding FRNGs
would buy one new gold backed dollar.

-

If Congress wonGt abolish the Fed. The world might abolish the dollar

-

Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology - August 2014
Modern core systems are emerging as the foundations of effective channel integration and customer engagement initiatives.
Slideshows
Video