NJ Bridgewater
Crossing
the Bridge
7
December 2017
“It [Bitcoin] will be everywhere and the
world will have to readjust. World
governments will have to readjust.”[1]
- John McAfee, Bloomberg interview
What is
Bitcoin?
This is a question that is stirring in the minds of millions who have started
to hear about its meteoric rise in value in relation to the U.S. dollar. Every
day, there are fresh reports of new Bitcoin ‘all-time highs’ (or ATHs for
short). As of today, Bitcoin is worth more than $14,000 USD—for one Bitcoin!
Bitcoin is a phenomenon that has taken the world by storm, and it has left many
people scratching their heads, wondering what it is, why it is so valuable, and
how it can be used. The reason for this is simple. We are facing a massive
paradigm shift. Imagine, if you will, living thousands of years ago, when the
first caveman or cavewoman walked on the beaches of ancient East Africa and
began to collect beautiful shells. Later on, he or she bored holes in the
shells and passed a leather thread through them, making the first necklace.
These shells, which could be used for beautification, created value. How was
that? Because everyone agreed that the shells were beautiful, and it took time
and effort to collect them. If you lived further inland, you could not obtain
shells easily. Only by physically going to the beach and collecting them,
choosing only the best and most beautiful shells, could you first obtain this
newfound source of wealth. A man or woman who wore shells was more beautiful or
handsome, and, as such, was a more desirable mate. Shells could also, perhaps,
have been used in ancient religious rituals, and might have adorned the bodies
of ancient chieftains and shamans. They could be used in headdresses,
necklaces, bracelets, anklets and other decorations, as well as being sewn into
leather clothing and furs. With shells being universally recognized as a source
of value/wealth, they could also be exchanged for other goods, e.g. meat,
fruits, nuts, stone tools, clothing, furs, etc. perhaps even in the exchange of
women as mates (e.g. in some ancient form of dowry or bride price).
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Why am
I writing about shells? Because shells are one of the earliest forms of money. In
a Twitter post, cryptographer Nick Szabo writes that “successful money is
far from arbitrary. The most common collectibles were the two most durable and
suitably scarce kinds of objects available: biologically crystallized calcium
carbonate and later the monetary metals (copper, gold, and silver).”[4]
In fact, cowry shells [the ‘calcium carbonate’ Szabo is referring to] continued
to be in use as legal tender in western Africa up till the 19th
century. Shells were fastened together in strings of 40 – 100 each, with 50 or
20 strings representing one dollar. Three thousand years ago, in China, cowries
were also used as currency, while, in India, cowries continued in use as legal
tender until 1805 CE.[5]
How does this relate to Bitcoin? Because Bitcoin, and cryptocurrency in
general, is the new form of money. It is the latest evolution in the
development of money. Cowry shells were eventually superseded by precious metal
coins in much of the world, using electrum, silver and gold. These, in turn,
were replaced by paper money backed by gold and silver. And paper money, in
turn, was replaced by fiat currency, which is the currency that currently
predominates in most of the world. Fiat means ‘decree’. In other words, they
are currencies that are created out of thin air, at the whim of national
governments. While the U.S. dollar used to be backed by and redeemable for a
certain amount of gold in the past ($20.79 could buy you an ounce of gold in
1879), since 1971, the U.S. dollar has no longer been backed by gold.[6]
Rather, it is backed by nothing other than blind faith. Nixon implemented this
separation from the gold standard in order to stop foreign dollar holders from
sapping U.S. gold reserves.[7]
Now, we have reached the next stage in the evolution of money: cryptocurrencies
and the blockchain.
Bitcoin paper wallet
Bitcoin is the
most popular and well-known cryptocurrency. It is also the pioneer of all
cryptocurrencies, being the first one to gain traction and widespread usage. A
cryptocurrency is a currency that is designed to be both secure and, most of
the time, anonymous.[9]
The system is based on cryptography – the same technology which allows your
WhatsApp messages to be encrypted, and your online banking details to remain
secure. If you trust the internet with your credit card or debit card details,
then you are trusting in cryptographic technology. The main purpose of
cryptography is anonymity. When it comes to currencies, anonymity and
encryption is incredibly important. Do you want people knowing how much money
you hold, how you spend it, or where you store it? Cryptography is a key part
of securing your financial resources. Bitcoin is an evolution of this
technology – allowing money itself to be held and spent without the
intervention of banks or financial institutions. Using the technology of the blockchain,
Bitcoin circumvents government controls over currency, allowing you to spend,
buy and receive currency to/from an anonymous wallet. Does this mean that U.S.
dollars, GBP, euros, etc. are no longer relevant? Basically, yes. All the major
currencies in the world are already fully digital. Most dollars in circulation
are actually 1s and 0s recorded within an internet ledger; but these 1s and 0s
are backed by nothing, other than the good faith and credit of the national
government which issued them. Paper money barely scratches the surface in terms
of the actual number of U.S. dollars in circulation. Since most transactions
are now digital, paper money serves only one real function in the modern world:
a means of maintaining the illusion that fiat money is real money. National
currencies are an illusion—they are created out of nothing, and they are supported
by nothing at all. They have no intrinsic value.
Cowry shells being used by Arab traders (1845)
Money
is, essentially, a meme. The term ‘meme’, coined by Richard Dawkins in The
Selfish Gene (1976), derives from the Greek word mimeme, meaning
something ‘imitated’. He sometimes refers to these as ‘mind viruses’.[11]
A meme is a viral idea, which spreads from one person to the next, rather like
the habit of collecting and trading cowry shells, which we referred to earlier.
This ‘mind virus’ does not physically exist. Rather, it exists in the
collective consciousness of those who believe it. If we believe that money
exists, it exists. If we believe that the U.S. dollar has value, it has value.
If we believe potato chips with the face of Elvis on them have value, they have
value. U.S. dollars, like all national currencies, exist as part of this
collective belief-system or ‘mind virus’. There is no such thing as money,
really, except to the extent that people maintain this collective belief.
“’Economists and journalists often get
caught up in this question: Why does bitcoin have value?’ Shapeshift founder
Erik Voorhees once detailed. ‘And the answer is very easy. Because it is useful
and scarce.’”[12]
- Erik Voorhees, quoted by Jamie Redman
Those
who cannot understand the value of Bitcoin are
generally unaware of the value of money itself, or what money is. Money is a
form of value. If I can sell you a packet of potato chips for $1, then $1 has
the value of a packet of potato chips. If you refuse to sell me that packet,
because you believe that the dollar isn’t worth the paper it’s printed on, then
you are refusing to be a part of the collective belief-system of U.S. dollars.
You are refusing to accept that the dollar has value. It will only have value
for those who believe it has value. As Adam Smith Writes in The Wealth of
Nations: “The market price of every particular commodity is regulated by
the proportion between the quantity which is actually brought to market, and
the demand of those who are willing to pay the natural price of the commodity.”[13]
This raises the question: what is the intrinsic value of Bitcoin? To understand
that, we need to also understand how Bitcoin differs from fiat currencies. What
exactly is a Bitcoin?
Bitcoin price history: 2011 - 2017
Bitcoin was
created in 2009 by a person under the pseudonym of Satoshi Nakamoto.[15]
He first described Bitcoin in a white paper published online in 2008 before
eventually disappearing from the scene, taking the mystery of his identity with
him into the murky depths of the cyber-world.[16]
Bitcoin was intended to exist as a purely peer-to-peer “electronic cash,”
allowing “payments to be sent from one party to another without going
through a financial system.”[17]
This means that you can send Bitcoins from one person to another directly,
without using the intermediary of a financial institution, such as a bank. As
long as both parties have Bitcoin wallets, with access to a certain amount of
Bitcoin, then they can carry out a transaction on the Bitcoin network. So, how
does Bitcoin exist? It exists on the blockchain. The blockchain is the
revolutionary technology that allows cryptocurrencies to exist. It prevents the
so-called ‘double spend’ problem. The problem with digital currencies is that
they could potentially lead to individuals spending the same amount of money
twice, which would cause confusion and chaos.
The blockchain
is a way of verifying transactions and making sure that there is no double
spending. How does it work? The blockchain is a shared database which records
transactions and encrypts them.[19]
It’s basically a distributed digital ledger that is encrypted and maintained by
a network of miners located in various locations across the face of the earth.
In the past, accountants and businessmen used ledgers to record transactions on
paper. The blockchain records these transactions across an entire network,
ensuring that there is no falsification or errors. As new transactions emerge, they
are bundled together into blocks. These blocks are then processed by Bitcoin
miners, who use an advanced cryptographic code to unlock new Bitcoins. As a
reward for their vital role in the maintenance of the blockchain network,
miners receive Bitcoins as a reward. This reward is halved every so many years,
making mining progressively more difficult as Bitcoin reaches its upper limit
of 21,000,000 Bitcoins. There can never be any more than 21 million Bitcoins in
existence, so Bitcoin is essentially deflationary, unlike the U.S. dollar,
which is inflationary. Since no one person controls Bitcoin, it is thoroughly
decentralized. No one ‘owns’ the blockchain. Individual mining operations can
be owned, but no one person controls all the Bitcoin mines across the face of
the planet. Since Bitcoin is distributed, it cannot be banned, prohibited, or
annihilated. Even if one country bans Bitcoin or attempts to regulate it, all
such attempts will fail to curtail the system, which functions organically and
grows naturally.
What is
the intrinsic value, then, of Bitcoin? Well, what is value, and how can it be
intrinsic? The famous economist, David Ricardo (1772 – 1823), writes:
“The value of a commodity, or the quantity
of any other commodity for which it will exchange, depends on the relative
quantity of labour which is necessary for its production, and not on the
greater or less compensation which is paid for that labour.”
- David Ricardo (1817), Principles of Political Economy and
Taxation
The
cowry shells we referred to earlier are valuable because people want them. They
can be used to make jewellery and can be traded as a currency. They are
collected on beaches, far away from the African or Chinese interior. There is
thus limited access to cowries. The people who collect them expend time and
effort in doing so. And it takes time and effort to bore holes in the cowry
shells and attach them together with wires or thread. The value of cowry shells
thus depends on two factors: time/effort + scarcity = value. Intrinsic means
inherent or essential. Does a shell have any inherent or essential value?
Probably not. When we say intrinsic value, what we are really referring to,
then, is its utility to human beings. Can we use shells in jewellery or for
trade? If yes, then we would generally argue that they have intrinsic value. In
common parlance, therefore, intrinsic value means the essential utility of
something for society. Do U.S. dollars have intrinsic value, then? Dollars are
created by the Federal Reserve by adding 1s and 0s to a ledger, or through
massive printing of paper notes with the denominations written on them. These
notes are not redeemable for gold, and they are not backed by any kind of
cryptography or precious metals. In fact, the more notes that are printed, and
the more currency generated digitally by the Federal Reserve, the less value
U.S. dollars have, as they have reduced purchasing power. This is called
‘inflation’. The value of your U.S. dollars today is less than the value of the
same denomination 10 years, or 100 years ago. If you put $100 in the bank
today, it will be worth less in 1 years’ time. The value of your money will
practically evaporate into thin air. Why is that? Because the more currency is pumped
out by the system, the less value it has. It becomes less scarce, and scarcity
is essential to our notion of value.
“Gold and silver, like other commodities,
have an intrinsic value, which is not arbitrary, but is dependent on their
scarcity, the quantity of labour bestowed in procuring them, and the value of
the capital employed in the mines which produce them.”[22]
- David Ricardo, The Works of David Ricardo
Bitcoin, in
contrast to U.S. dollars, is essentially scarce. There can only ever be
21,000,000 Bitcoins, whereas there are trillions of U.S. dollars in
circulation, with more and more being pumped out every day. In this sense,
Bitcoin is rather like gold, which is also scarce and limited in supply. When
people want to hedge against inflation, they often buy or invest in gold and
other precious metals. The total amount of mined gold in the world is around
171,300 metric tonnes, with a total value of $8.2 trillion USD.[23]
In the same manner, Bitcoin is a hedge against inflation, as the total number
of Bitcoins is permanently capped. What about the time and effort it takes to
create Bitcoins? How does that compare with U.S. dollars? There are several
ways of measuring the total money supply. M1 is a metric used to refer to all
the paper money and coins of a currency, as well as all the checking accounts,
demand deposits and negotiable order of withdrawal (NOW) accounts.[24]
M2 is a wider metric used to include everything in M1 plus savings account
deposits and money market account deposits.[25]
In February 2015, the total M1 money supply in the United States was $2.9882
trillion USD.[26]
That’s 2,988,200,000,000 U.S. dollars! In late 2016, the supply of U.S. dollars
increased dramatically, at a 46-month high of 11.2%.[27]
As of October 2017, the total M1 money supply in the United States had reached
3.5947 trillion U.S. dollars![28]
What do you think that does to the value of your savings? It is decimating to
them! How much does it cost to create these trillions of dollars? Surprisingly
little. Paper money costs hardly anything. $1 and $2 notes cost 4.9 cents to
make, $5 notes cost 10.9 cents, $10 notes cost 10.3 cents, $20 and $50 notes
cost 10.5 cents and $100 notes cost 12.3 cents.[29]
However, this includes only the printed/minted money supply. As of 2017, that
amounts to $1.59 trillion USD, of which $1.55 trillion USD is Federal Reserve
notes, i.e. paper money.[30]
Wait a minute! That’s $1.59 trillion out of $3.5947 trillion USD. That’s a huge
discrepancy! Here’s the rub: most U.S. dollars are 100% digital. How much does
it cost to produce them? Nothing. U.S. dollars are, for the most part, created
out of thin air and exist as nothing other than debt. Fiat currency = debt.
“Like an ant colony, the bitcoin network is
a resilient network of simple nodes following simple rules that together can do
amazing things without any central coordination.”[31]
- Andreas M. Antonopoulos, Mastering Bitcoin: Unlocking
Digital Cryptocurrencies
In
contrast with fiat currencies, which cost almost nothing to create and come
into existence instantaneously—out of thin air—Bitcoins take
actual time and effort to produce. In fact, they even take a measurable amount
of electricity and computing power, called the ‘hash rate’, to produce. As we
learnt earlier, Bitcoin exists on a network called the blockchain. This is how
it works: a block of Bitcoin transactions is chosen from the list of all
currently-pending transactions, called the ‘mempool’. These are recorded into
the distributed ledger, consisting of an ever-growing number of blocks,
collectively called the ‘blockchain’, with a new block being created roughly
every 10 minutes.[32]
The integrity of this system is maintained via Proof of Work (PoW) hashing.
Bitcoin miners must unlock a cryptographic puzzle called a ‘hash’, with each
new correctly-hashed block releasing a pre-determined number of newly-created
Bitcoins.[33]
The ‘hash rate’ is thus the measure of a miner’s computational power, measured
as hash per second (H/s), with greater measures termed Kilohash, Megahash,
Gigahash, Terahash and Petahash.[34]
As of September 2017, the hashrate was 9,214,860,125 GH/s.[35]
In addition to computing power, or the hash rate, we have to factor in the cost
of electricity used to produce one Bitcoin. In the U.S., a kilowatt hour (kWh)
costs about $0.12 on average. According to Trubetskoy’s calculations (2017)
with Bitcoin blocks being solved at 6 per hour, one block costs about
$19,598.50 to solve and, at $0.12 per kWh, it costs $1,567.88 to mine one
Bitcoin, not counting the costs of equipment, labour, premises, etc. If you can
lower the electricity costs, the cost to mine one Bitcoin can go down quite a
bit; hence why most of the mining takes place in cooler parts of the world
& where electricity is cheaper.[36]
Let us make a comparison. Most U.S. dollars are completely digital and cost
almost nothing to produce, with the remaining costing about 4.9 cents per
dollar. They can thus be churned out an incredible rate, without any regard for
cost. One Bitcoin costs over $1,500 in electricity alone to produce. In
addition, it requires a hashrate of more than 9 billion GH/s, which is a huge
amount of computing power, and the difficulty increases every 2,016 blocks, or
about every two weeks.[37]
The time, effort and expense that goes into creating 1 Bitcoin is huge in
comparison to the U.S. dollar, which can be created, in the billions, at the
flip of a switch. When you take into consideration the limited supply of
Bitcoins, which of the two (Bitcoin and U.S. dollars) do you think has actual
intrinsic value? If there is such a thing as intrinsic value for currencies,
Bitcoin has intrinsic value, whereas the U.S. dollar and all other fiat
currencies are essentially worthless. They exist as ideas, and nothing
more. Bitcoin is real and has actual value!
The number of Bitcoin transactions per month (2009 – 2017)
The one hundred trillion Zimbabwe dollar note
Now, is
it still worthwhile to buy Bitcoin,
even when it’s up at an all-time-high (ATH) of $14,000 (or more)? Yes, of
course it is. You can buy a fraction of a Bitcoin. According to Bitcoin Wiki,
the smallest division of a Bitcoin is a satoshi, named after the
pseudonymous Satoshi Nakamoto, creator of Bitcoin, and it is equivalent to one
hundred millionth of a single Bitcoin, or 0.00000001 BTC. To get to grips with
the value, as of October 2017, 1 U.S. cent ($0.01) is worth 171 satoshi.[40]
That’s manageable to buy. In other words, if you have even 1 U.S. penny, you
can still buy 171 satoshi, which is 171 hundred millionths of a Bitcoin. If you
have $10 or $100, you can buy a larger part of a Bitcoin. There is no real
barrier to entry, as long as you have access to a free Bitcoin wallet and a
Bitcoin exchange, though it is also possible to buy Bitcoins from individuals through
direct peer-to-peer transfers. Most people, nowadays, at least in the U.S. and
UK, initially buy Bitcoin through a Bitcoin exchange, which is a platform where
you can buy and sell Bitcoin, as well as store Bitcoin. Be warned, however, as
Bitcoin exchanges have been hacked in the past. If you are very
security-conscious, you’ll probably want to buy a TREZOR or other hardware
wallet where you can store your Bitcoins securely and offline. If you want to
open an account on Coinbase,
which is one of the largest exchanges, you can use THIS LINK.
You can also set up an account on
CEX.io HERE; on Paxful
HERE; or on many other exchanges. In addition, you should keep reading as
much as you can about Bitcoin, keeping abreast of all the latest news, so that
you know the current price of Bitcoin and any other macroeconomic events which
will shape the future of Bitcoin—or how Bitcoin will shape the future of money.
At the end of the day, Bitcoin is more than a currency—it is a revolution!
For
more beginners’ information on Bitcoin investing, I’d suggest that you read my
short and concise information guide: Bitcoin: 10 Ways
to Make Money Using Bitcoin, which is available HERE,
as well as on Amazon.com
and on Gumroad. Amongst other things,
this e-book which teach you: the meaning of HODL, future estimates for the
value of Bitcoin, the buy-and-hold strategy, how to become a Bitcoin miner, how
to lend Bitcoin, investing in Bitcoin-based companies, how to set up a Bitcoin
bank account, how to become a Bitcoin broker, short-term Bitcoin investing, how
to become a Bitcoin blogger, how to become a Bitcoin e-book author, setting up
your own Bitcoin exchange, and some tips for investing in initial coin offerings
(ICOs). Everyone needs their own strategy. Consider this my attempt to provide
you with the basic knowledge that will allow you to come up with your own
strategy. If you’re interested in investing in Bitcoin, and believe, as I do,
that Bitcoin could be the new digital gold, then do purchase and download this
e-book. The future potential for Bitcoin is huge, and there is still time to
invest. If you want to be a part of history as it unfolds; if you want to own a
tangible asset that will retain and increase in value over time, then you
should consider investing in Bitcoin. Finally, if you found this blog post
helpful in any way, and feel that it is beneficial, then I would kindly request
that you provide a donation so that I can keep producing high-quality and
informative content for my audience. You can donate to me directly via PayPal, through Bitcoin
(get in touch via Twitter @Nicholas19),
or via PATREON here. If you
want to keep in touch and get informed about any upcoming books, blog posts,
videos, etc. then make sure to follow me on Twitter @Nicholas19, like my Facebook page HERE, and
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YouTube channel HERE.
Oh, and
before you go, I’d like to share a gift with you. It’s completely FREE and I
hope you will enjoy it. If you find it valuable or useful in anyway, please let
me know. I’ve compiled a short information guide entitled 151 Amazing Money Secrets: What the
Rich Know About Money and Their Secrets to Success & Prosperity,
which contains 151 quotations from thinkers, philosophers, economists and
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Best wishes and keep on learning!
NJ Bridgewater
7
December 2017
-->
[1] John McAfee
(2015) Bloomberg interview, 25 April 2015. URL:
http://www.bloomberg.com/video/paypal-sees-20-billion-in-mobile-transactions-WlokACTBRterdjHAJGNB6w.html
(accessed 03/10/2017).
[2] Image source: Cowrie
shells used as dice, showing a roll of 3. Uploaded by Sodabottle (own work), 21
December 2011. CC BY-SA 3.0. URL: https://en.wikipedia.org/wiki/Cowry#/media/File:Cowrie_shells_-_sozhi_roll_of_3.jpg
(accessed 07/12/2017). For more information on the license, see: https://creativecommons.org/licenses/by-sa/3.0
(accessed 07/12/2017).
[3] Image source: Photos
shows pile of 1BTC-denominated brass coins, with the bitcoin logo, production
year, the text "Vires In Numeris", with the tamper-evident
holographic sticker on the reverse. Image in the public domain. Uploaded by
Mike Cauldwell, 12 November 2012. URL: https://upload.wikimedia.org/wikipedia/commons/3/36/Physical_Bitcoin_by_Mike_Cauldwell_%28Casascius%29.jpg
(accessed 07/12/2017).
[4] See: Nick
Szabo, Twitter post (@NickSzabo4), December 5, 2017. URL: https://twitter.com/NickSzabo4
(accessed 07/12/2017).
[5] See: Shell
money (Wikipedia article). URL: https://en.wikipedia.org/wiki/Shell_money
(accessed 07/12/2017).
[6] See: Why Did
the U.S. Abandon the Gold Standard? Mental Floss, October 5, 2012. URL: http://mentalfloss.com/article/12715/why-did-us-abandon-gold-standard
(accessed 07/12/2017).
[7] See: Mental
Floss (2012).
[8] Image source: Mockup
of a bitcoin paper wallet. Invalid public key intentionally used to prevent
accidental deposits to this address. Uploaded by Canton at English Wikipedia on
18 April 2013. CC BY-SA 3.0.URL: https://upload.wikimedia.org/wikipedia/commons/a/ab/Sample_Bitcoin_paper_wallet.png
(accessed 07/12/2017).
[9] See: Cara
McGoogan, Matthew Field (2017) What is cryptocurrency, how does it work and why
do we use it? The Telegraph, 6 December 2017 10:38 AM. URL: http://www.telegraph.co.uk/technology/0/cryptocurrency/
(accessed 07/12/2017).
[10] Image source:
A print from 1845 shows cowry shells being used as money by an Arab trader, by
Benjamin Waterhouse Hawkins. Image is in the public domain. URL: https://en.wikipedia.org/wiki/Cowry#/media/File:A_print_from_1845_shows_cowry_shells_being_used_as_money_by_an_Arab_trader.jpg
(accessed 07/12/2017).
[11] See: Mark A.
Jordan (2014) What’s in a Meme? Richard Dawkins Foundation. URL: https://www.richarddawkins.net/2014/02/whats-in-a-meme/
(accessed 07/12/2017).
[12] Jamie Redman (2016) Is the Blockchain Rush a Search for
Fool’s Gold, Bitcoin,com, December 26, 2016. URL: https://news.bitcoin.com/is-the-blockchain-rush-a-search-for-fools-gold/
(accessed 03/10/2017).
[13] Adam Smith
(1776) An Inquiry into the Nature and Causes of the Wealth of Nations,
Book 1, Ch. 7, par. 7 – 8. Available online at:
http://geolib.com/smith.adam/won1-07.html (accessed 07/08/2017).
[14] Image source: Bitcoin
price[f] history chart, linear scale, uploaded by Wikideas1 (own work) on 4
December 2017, CC0. URL: https://en.wikipedia.org/wiki/Bitcoin#/media/File:Bitcoin_Price_History.png
(accessed 07/12/2017).
[15] See: McGoogan
& Field (2017).
[16] See: Robert
Reed (2017) Column: Baffled by bitcoin: One man's quest to comprehend
cryptocurrency, Chicago Tribune, December 5, 2017, 5:00 AM. URL: http://www.chicagotribune.com/business/columnists/reed/ct-biz-bitcoin-journey-robert-reed-125-story.html
(accessed 07/12/2017).
[17] Satoshi
Nakamoto (2008) Bitcoin: A Peer-to-Peer Electronic Cash System, Bitcoin.org,
October 31, 2008. URL: https://bitcoin.org/bitcoin.pdf (accessed 07/12/2017).
[18] Image source:
Bitcoin network data, uploaded by Mattäus Wander (own work) on 22 June 2013. CC
BY-SA 3.0. URL: https://en.wikipedia.org/wiki/Blockchain#/media/File:Bitcoin_Block_Data.svg
(accessed 07/12/2017).
[19] See: Andrew
Meola (2017) Understanding blockchain technology, bitcoins and the rise of
cryptocurrency, Business Insider, Aug. 25, 2017, 4:36 PM. URL: http://www.businessinsider.com/blockchain-technology-cryptocurrency-explained-2017-8
(accessed 07/12/2017).
[20] Image source: Song
Dynasty Jiaozi, the world's earliest paper money, uploaded 6 June 2005. Public
domain. URL: https://en.wikipedia.org/wiki/Money#/media/File:Jiao_zi.jpg
(accessed 07/12/2017).
[21] Image source: Portrait
of David Ricardo by Thomas Phillips, 1821. Image in the public domain. URL: https://upload.wikimedia.org/wikipedia/commons/d/dc/Portrait_of_David_Ricardo_by_Thomas_Phillips.jpg
(accessed 07/12/2017).
[22] David Ricardo
(author), J.R. MucCulloch (editor) (1846) The Works of David Ricardo, with a
Notice of the Life and Writings of the Author (London: John Murray), p.
263.
[23] See: Raul
(2017) Here's a comparison of bitcoin and all of the world's money, Business
Insider, Jun. 25, 2017, 3:03 PM. URL: http://www.businessinsider.com/bitcoin-compared-to-all-of-the-worlds-money-2017-6
(accessed 07/12/2017).
[24] See: Investopedia
(2017) M1, Investopedia.com. URL: https://www.investopedia.com/terms/m/m1.asp
(accessed 07/12/2017).
[25] Ibid.
[26] See: Investopedia
(2015) How much of the United States' money supply is M1? Investopedia.com.
URL: https://www.investopedia.com/ask/answers/041415/how-much-united-states-money-supply-m1.asp
(accessed 07/12/2017).
[27] See: Ryan
McMaken (2017) Money-Supply Growth Accelerates in Late 2016, Mises Wire,
01/06/2017. URL: https://mises.org/blog/money-supply-growth-accelerates-late-2016
(accessed 07/12/2017).
[28] See: Board of
Governors of the Federal Reserve System (BGFRS) (2017) Money Stock and Debt
Measures - H.6 Release, FederalReserve.org, November 30, 2017. URL: https://www.federalreserve.gov/releases/h6/current/default.htm
(accessed 07/12/2017).
[29] See: Caitlin
Schneider (2015) How Much Does it Cost to Manufacture U.S. Paper, Mental
Floss, October 9, 2015. URL: http://mentalfloss.com/article/68650/how-much-does-it-cost-manufacture-us-paper-money
(accessed 07/12/2017).
[30] See: BGFRS
(2017) How much U.S. currency is in circulation? ederalReserve.org,
November 15, 2017. URL: https://www.federalreserve.gov/faqs/currency_12773.htm
(accessed 07/12/2017).
[31] Andreas M.
Antonopoulos (2014) Mastering Bitcoin: Unlocking Digital Cryptocurrencies
(Sebastopol, CA: O’Reilly Media, Inc.). This quotation is used under fair use.
[32] See: Jordan
Tuwiner (2017) Is Bitcoin Mining Profitable or Worth it in 2017 & 2018? BuyBitcoinWorldwide.com,
last updated June 13, 2017. URL: https://www.buybitcoinworldwide.com/mining/profitability/
(accessed 07/12/2017).
[33] See: Tuwiner
(2017).
[34] See: Tuwiner
(2017).
[35] See: Gregory
Trubetskoy (2017) Electricity Cost of 1 Bitcoin (Sep 2017), Grisha.org,
September 28th, 2017. URL: https://grisha.org/blog/2017/09/28/electricity-cost-of-1-bitcoin/
(accessed 07/12/2017).
[36] See:
Trebetskoy (2017).
[37] See:
Trebetskoy (2017).
[38] Image source: Number
of bitcoin transactions per month (logarithmic scale), by Zhitelew (own work),
created 31 May 2015, CC0. https://en.wikipedia.org/wiki/History_of_bitcoin#/media/File:BTC_number_of_transactions_per_month.png
(accessed 07/12/2017).
[39] Image source: The
100 trillion Zimbabwean dollar banknote (1014 dollars), equal to 1027 (1
octillion) pre-2006 dollars. Uploaded 1 January 2009. Image is in the public
domain. URL: https://en.wikipedia.org/wiki/Hyperinflation#/media/File:Zimbabwe_$100_trillion_2009_Obverse.jpg
(accessed 07/12/2017).
[40] Satoshi (unit)
(BitcoinWiki article). URL: https://en.bitcoin.it/wiki/Satoshi_(unit)
(accessed 07/12/2017).
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