by Dwight Kehoe, TPATH, ©2022
(Jan. 6, 2022) — Bitcoin, crypto-currency or simply Crypto has been around for over a decade and has had some startling gains. While it is not our aim to play the role of “chicken little”, it seems prudent for anyone who is either dabbling or wholly invested in this relatively new form of currency to understand the delicate balance one straddles with these types of instruments.
One of the most desirable features of Crypto (we will use that term in this article to include all such instruments) is its apparent ability to hedge what some experts are calling the coming crash of the dollar. The idea behind this view is that governments, especially the US Government, print money like confetti using Quantitative Easing (QE) and then back that fabricated debt by means of Fiat.
WHAT IS FIAT?
It is the system which supports the US dollar with the understanding the government has ability to confiscate property, control and use natural resources and to tax its people to any amount required to hold off debtors. Of course it is nothing more than a legalized Ponzie Scheme that has, at least til now, kept the system relativity stable. But there must be, at some amount of debt, a tripping point. Then what? No one really knows but the fear is that that point could be as close as tomorrow.
That for certain it is one of the major reasons that Crypto has become so dominant. People really do believe that if the world economies collapse Crypto will be their savior. But will it be?
This may surprise Crypto investors but one of the flaws or weak points in Crypto is the fact that it too is fiat currency as it is not backed by or convertible into a commodity or hard asset. We are not referring to its ability to purchase goods in individual transactions, but the reference is to the entire system as a whole.
An account’s value and magnitude are supported solely by computer programs. However, this fiat misconception is not the most dangerous one. There is yet another much more ominous flaw. We will get into that in a few minutes.
We acknowledge that much profit has been gained with Crypto and there might still be more ahead. Many writers and financial pundits claim the system is too sophisticated, too well organized and so decentralized that the system just could not ever fail or be hacked. On the surface this seems a solid argument. But is it?
WHAT IS BLOCKCHAIN?
As we all know the power behind the security and anti-crashing defense of the Crypto systems is an intricately formulated electronic path. That system is called a blockchain. It is complicated and well structured and without going into a lot of boring technical terms the idea is that every block in any financial transaction, and there could be many thousands of blocks, holds information related to the previous blocks and the ones which follow. No data can be altered or deleted in any of the block connections for a particular transaction without the block chain seeing it and stopping the purchase, sale or transfer. Brilliant!
This, even if not totally understood by the thousands of users, does seem to support the many who claim it is foolproof. In that light, there are a few adages which should be considered. One is that”if something sounds too good to be true, it more than likely is false”. The other is “a chain is only as strong as its weakest link”. And another we just coined “the only real fool in foolproof might be one’s self”.
Many people, as referenced above, feel that Crypto is a solid instrument that can keep the governments of the world out of their financial lives which will allow purchases to be unseen.
Let’s now look at the vulnerability and what surprises our government could have in store for us. Users, as we know or have been told, are issued a KEY for each account. That key or password does not work in conjunction with any other data or ID. If one loses that KEY one looses that account and all that is in it. That of course is one of the good things in that no one will ever be able to get into anther’s account unless they have access to the KEY.
Block chains are immune to hacking and viruses for the reasons described above. But what if, our government or a combination of global governments decided they would like to be able to close your Crypto account, remove currency from it or just prevent you from accessing it? You know, in case you might have been unvaxxed or resistant to total compliance.
Read the rest here.