Less than 1 percent of normal money in the usa is physically printed cash. The rest of it is digital and held only on on ledgers within the financial system. If you feel that your existing money was physical and liquid then some research may be in order. It is in fact 99 percent theoretical and very much subject to the tenants of perception.
For example the financial crisis of 2008 is a glaring example of this. Unfortunately since then the system has not shifted since then. Money is still held databases and accounted lists agreed to in longwinded financial reports and audits capped off with a night out at decent restaurant. An annual report published at the end of the year with 50 pages and a few charts and some footnotes reffering to anouther 50 charts. Derivatives in the usa are now valued at 220 trillion where the cash supply is only 1.38 trillion. Bank deposits are at 10 trillion. To prevent bank runs the Fed has recently passed new rules allowing institutions to refuse to release you your cash for up to 10 business days. Something that would not be necessary if our finacial system had trully healed.
There is a misconception that furious money printing is carried out in the literal form, although it does happen, it is mainly comprised of digital creation. The strike of the key creating a billion dollar government bond, a copy and paste, lets make that two.
Our current money is infact digital and this new bitcoin phenomenon is infact something else. The difference between Digital money and Cryptographic currency is a key to understanding what it is and why so many people are taking to it.
All cryptographic money (crypto-currency) has a physical form. You can take the bitcoin, write down its individual fingerprint on a peice of paper, and there it is. This means it can not be copied and pasted. You would simply have two coppies of the same dolar. Spend one and the other would no longer work. While cyptographic might seem more digital, it is actually in a special way more concrete than even a printed note.
It is not only the physical form of a bitcoin which is more tangible than todays normal money, it is also the method of which transactions are recorded. When a bitcoin transaction occurs online or otherwise, the physical money, the tangible code, actually changes hands.
When a normal money transaction occurs, separate ledgers are compared and modified to suit. Two independent ledgers must agree and some third party can verify that these two independent parties are counting correctly. This means that in the existing system there are thousands (probably millions) of ledgers accoss the world which are all supposed to balance against each other. Some of these ledgers are digital some are on paper, some of these are digital but not compatible with other digital ledgers. This makes it all very difficult to know what is going on in the bigger picture.
With bitcoin there is one ledger. This makes it very easy to know whats happening. The bitcoin ledger could even be printed out and stored in one library. I imagine it would take up quite a few shelves but it is possible. You could go to a shelf and find all the transactions for that day. This could not happen in any meaningfull way with the current system. How would you index them?
One counter argument is that the amount of transactions on the current system is so imense this idea of having one ledger printed and stored in one place is obsurd. Even if they where easily available it would simply take to much space. There are huge football field size server farms already in the mid west of the usa trying to store all of this data at pressent and strugling. Data duplication and extraction are key issues there. With various forms of indiscript information stored in these places intellgent computer algorithms are contrived to try to make meaning from financial noise. The term 'meta data' has arrived which is the ultimate embodyment of such digital vagaries.
The thing with crypto-curency is that when they scale up, say if multiple ledgers are required to record all transactions in the world, then at least these ledgers are compatible with eachother. Not only bitcoin but other crypto currencies like litecoin etc. can handle different transaction needs and these can all be anlysed using the same, relativley basic tools. No duplicates occure and all the data is pure. This means that data on what is happening in the financial system can be much more accurate. Figures can be asessed in real time, can be physically verified and are in thier nature mathematicaly real. A vast improvement on pressent day statistics.
This issue with figures is important for all people. The fed is continually anouncing figures on unemployment and consumer spending and thats fine. The problem is that at a later date, normally as part of the next quarters anouncement they are also reviewing previous figures up or down. So in effect the actual numbers are in the fine print published after the fact and contually revised. This means we have very little actual clarit and It is difficult to determine what the real data is. Janete yellen even encourages businesses to do there own figures and not to rely on the data provided by the federal reserve. The real numbers have also fallen into cloud of politicle pressures and language. Remember 'patience' doesn't necessarily mean two quarters. These conditions make it difficult to do business and predict trends. It also means that government policy can not target things well and policy success is ill judged as the data is not solid. With crypto-currency data business, government and consumers a like are empowered with accurate, publically availabe information.
So we can see a destinct difference between what can be called digital money and what is crypto-currency. A mistake i have made in the past. Our current system is infact more digital in many ways than cryto currency. Althought crypto-curencies like Bitcoin have great digital utility, in their nature they are infact less digital and more an embodyment of math. Infact cryptographic coding is a physical mathematical thing, it is something that can be held and will not change. Digital currency which is for all intensive purposes our current system, implies something that can be broken, coppied cracked and hacked. You can hold cash but its value is actually fluid, determined by multiple factors, including the rate at which the fed induces quantitative easing. Crypto currency is infact a solution to these issues.
This mathematical code can not be duplicated as it is unique and interdependent. It is what it is and cannot be duplicated or forged and the quantity is fixed. This is as apposed to the current system, where two ledgers agree to a number and these ledgers are subject to periodic thirdparty scrutiny. The quantity of money in the current system is simply put determined by the interpretation of risk in the market. And it is what people believe it is or what people tell us it should be. How whimsically digital is that?
I argue that the mathematics based system is more tangible than our current monetary system. Fears of over intangible nature of bitcoin are infact quite the opposite. Our current system is emensily intangible and this has lead to problems in the past. Those who want to counter this should be thinking about holding phisical crypto-currency.
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