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Buying Bitcoin with Credit Card - Defeating the Purpose

Liz Louw
4 December 2017

Over the past month we have seen an odd, and rather alarming, twist in the motives behind the public’s adoption of bitcoin. A first trend was highlighted when the volume of Google searches for the phrase “buy Bitcoin” overtook that of “buy gold” for the first time. While this swing is reasonable when considering the comparative accessibility of the two assets, the second trend hints at a cause for concern - a spike in Google searches for “Buy bitcoin with credit card”.

The decentralised, equity-based Bitcoin economy offers users a chance to free themselves from the slavery of a credit-based economy. And yet, here we are… Though searches for this phrase make up only about 3 percent of all bitcoin searches, I think it is necessary to explain why we believe that Bitcoin can bring economic freedom to everyone. And that credit purchases defeat the purpose of this promise.

Enslaved by Credit - A Story from South Africa

In May this year, we published a narrative by Vee Tardrew, Head of Marketing here at Bitstocks, reflecting on her deeply personal journey with Bitcoin:

“..the (blockchain) technology was impressively ground-breaking, but it was the philosophical aspect that intrigued me most.

Michael guided my education through a world I accepted existed, but one I had not felt compelled to fully understand. A world in which governments used economic power to manipulate nations, financial frameworks to line their pockets, and monetary policy and regulation to keep people wholly indebted and enslaved to the system.

A world, which I was, regrettably, all too familiar with.

Modern slaves are not in chains, they are in debt.

You see, I had been sinking deeper and deeper into the vicious cycle of debt and interest. A series of unfortunate personal events resulted in some rather unwise financial decisions, all made with the best intentions of attempting to continue providing for my family and dependents.”

Global Debt Likely to Trigger an Economic Collapse

While Vee’s story tells of personal journey of freeing herself from the powerful chains of debt, it is fairly representative of the global picture of the international debt statistics, on both individual and national levels. The Economist warns that the debt clock is ticking:

“Every second, it seems, someone in the world takes on more debt. ...the rising total is important for two reasons. First, when debt rises faster than economic output (as it has been doing in recent years), higher government debt implies more state interference in the economy and higher taxes in the future. Second, debt must be rolled over at regular intervals. This creates a recurring popularity test for individual governments, rather as reality TV show contestants face a public phone vote every week. Fail that vote, as various euro-zone governments have done, and the country (and its neighbours) can be plunged into crisis.”

JPMorgan, an American multinational banking and financial services holding company, has cautioned that another financial crash, “the great liquidity crisis”, could be right around the corner as the debt bubble is bound to collapse.  

And back in the UK, the Bank of England move of increasing interest rates for the first time in a decade early this November, is foreboding. Multiple voices have admonished Britons to prepare for some tough financial times ahead.

Bitcoin’s Economic Potential

The opportunity in bitcoin is that it can serve as a hedge, and an alternative to the debt-based economy. In a talk on “What is true Bitcoin and its future potential?", Dr. Craig S Wright explains that Bitcoin is more than a cryptocurrency as it follows an entire different economy than the mainstream economy.

“The last 10,000 years was based on a credit-based economy. With bitcoin, the world can be transformed to follow an equity-based economy. Instead of ‘owning’ something that someone else really owns, whether it is a credit card or a house, you split your house into a thousand shares or a million, and you raise money by owning equity in your own home. This way there is no more housing crisis. Imagine this, if you owned 10,000 shares out of a 100,000 in your current home, and there is a massive downturn in the economy. The price of your house could go down by 20%. Most people in America would lose their homes if that happened today. If you had an equity-based system on the other hand, you would still own the same number of shares.”

Prepare for Higher Interest Rates and a Global Debt Bubble Collapse

Does the picture of living a debt-free, equity-based life appeal to you? Let Vee’s story instruct you: the road ahead is tougher than you can imagine, but well worth it.

Are you a debt-free saver or investor? It is time to prepare your portfolio for a debt-triggered economic crisis that could lead to interest rate rises and unproductive economies. A cryptocurrency investment can be a valuable hedge against turbulences in traditional markets. If you would like to explore this avenue, we invite you to consider the Bitstocks’ Market Advisory Service to ensure that your nest egg is constantly being monitored by cryptocurrency experts.

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