Bitcoin Explained + Economics

I recently started using bitcoin and thought someone might be curious into how it works.

I will write about religion and sin to start off, the fundamentals behind the key arguements about why interest was a sin is explained if you look far enough into the economics behind it.

Basically a simple explanation was that there was no inflation in the old days so lending meant taking money from someone else to pay back debt.

Interest works that way the thing with  modern economics is that keynesian theory allows interest in exchange for the interest growth is required instead.

Why interest is not a sin per say in modern times is that interest should be coming from growth and not from stagnation.

However, that said in modern times countries will still go bankrupt and debt restructuring occurs because of interest.
(So to an extent it still happens thats the true reason for economic collapses)

If we use a basic IS/LM model too much money created in the short term still means inflation in the long term. Increased debts mean debts eventually must be restructured unless the economy grows as well, resulting in a debt crisis or a bank run in case of financial collapses.

The key point is that interest was a SIN and we can see why it was a sin, in that you were taking money from someone else to pay back your own debt since their was no growth. Now its not because of keynesian economics.

Bitcoin argues the original point in that coins don't need to be made currency does not need to be reminted since its online an original money supply can actually play the role of fiat currency.

(Since Governments cannot print more money to get out of problems, they need to live within their means and politicians and financial intermediaries cannot decide monetary policy)

Rather its similar to the cold hard cash of the internet no transaction fees no banking intermediaries etc.
Basically in my opinion the idea of bitcoin is genius
(Sure it has problems especially since crime can use it like Cash)
However that does not take away from it being a good idea.
While inflation is always watched by countries, eventually we do reach a point where goods cost riduclous amounts so some reformat of currency will occur at some point to one world currency or another.

Except in cases or unless we want 1 trillion dollar bills like Zimbabwae did and merge into other currencies instead since we cannot support the economy with a national currency.
At some point redecimilzation may occur but economists are scared since they don't know what will happen if  a government did that
(Economics says more money = more growth = more income and an increase in the money supply)
Instead of currency appreciation proportionally to other countries such as China which prints more money to keep its trade advantage relative to other countries.

The opposite of that is bitcoin or the original system of finance to an extent
There is a Fixed money supply (Decimilization replaces new printing) Similar to fractional reserve banking but only if required
 And at some point one could argue that bitcoin will become  one of the major world currencys for online purchases at some future point.
At the time of this post bitcoin has an exchange rate like any other currency 1 bitcoin is worth $40 dollars USD
Very interesting stuff.
Hope that was simple enough to understand, now to the details

It's  brilliant in conception the only problems is that if governments get afraid of not controlling currency anymore and make it illegal thats the risk of the currency.
Or banks since its competition they do not want since it takes away from their fees for holding your cash :)
As for the security aspect basically its the processing power of all PC's ever connected to the network which encrypts the currency
The currency is in fact a high level encryption (It takes a computer engineer to explain it and a High lv computer person to understand it :)
Lets say it would take all the processing power of all computers on this system up to this point being replaced by 1 Computer or series of computers outprocessing the total growth of all the network to break it :)
And if that occured their would be no benefit as the bitcoins would be abandoned meaning no incentive to do so
The only weakpoint is if you lose your wallet or someone steals your bitcode key aka knows your wallet number they can take your cash, or a new currency comes along that is superior to bitcoin and replaces it
Why you might need multiple wallets and security :)
That said every lost wallet makes the currency stronger due to the possibility of deflationary effects. Although this is compensated for due to bitcoins going down to Satoshis basicially
1 bitcoin can go be broken down into many decimal points.
Meaning even at some future point where many bitcoins have been lost it is still possible to trade even with just 1 bitcoin.

Thats where mining comes in you can use your lazy PC to make some money when your not using it
Just uses electricity really no other cost lol and bandwidth I guess but most people don't cap their bandwidth idea is similar to Seti@home

Another interesting site is Kickstarter
With supply and demand and you particpate in projects
This is how movies may be made in the future
There will be a demand for a movie people will make it :D
And hopefully their won't be too much copyright on it all
Best case no more Hollywood trash Films :)

Thats my random post for today
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