Posted on 11/07/2013 9:04:05 AM PST by Errant
Having now tripled since August, Bitcoin's break above $300 ($324 highs) raises an important thought experiment - can a digital currency act as a global reserve currency?
It seems yesterday's CNBC discussion that Bitcoin is nothing but a beanie-baby fad just served to feed the beast... on heavy volume after Draghi's comments...
Charles Hugh-Smith, from OfTwoMinds blog, attempts an answer of just that question:
Could Bitcoin (or equivalent) Become a Global Reserve Currency?
Could a non-state issued digital currency like Bitcoin become a global reserve currency? The idea came up in my recent conversation with Max Keiser on the Keiser Report during our discussion of reserve currencies.
The idea is intriguing on a number of levels. In terms of retaining value though thick and thin, the ultimate reserve currency cannot be printed (and thus devalued) with abandon by a government. Gold and silver have served as the ultimate reserve currency, as precious metals can be traded for commodities and services, provide collateral for debt and serve as reliable stores of value.
While many observers believe gold is still the only reliable reserve currency (or if you prefer, the only reliable backing for government-issued paper money), it's a worthy thought experiment to ask if a digital currency could also act as a reserve currency.
(Excerpt) Read more at zerohedge.com ...
As always, some good comments at the bottom of the article. Interesting times...
they reopened a “silk road” so demand is back up..
They'll start a War on Bitcoin soon that will make the war on some drugs look like a Sunday afternoon picnic.
They won't call it Bitcoin, though. They'll call it money-laundering.
The latest big malware threat offers the ransomee the option to pay in Bitcoin. It’s a great way to cover your tracks if you’re worried about your bank or government tracking your spending.
As I told errant here yesterday, I’m a newbie to all this stuff and find it interesting.
Here’s a crazy Australian girl (with bad teeth LOL) blogging on it:
http://allthingsvice.com/about/
maybe we need a FR bitcoin pinglist?
that’s how I bought my VPN using bitcoin. Most if not all filelocker and torrent-related sites use bitcoin. It’s not going to slow down nor is it some fad. But collecting bitcoins is a pain.
I would certainly expect a fight over this, with stiff penalties and perhaps capital punishment in some countries if you are caught with an alternative currency of any kind. You'll probably have to accept some kind of identifier (mark) before you can even buy or sell.
And, I’m continuing to believe that this is just the logical extension of an illogical and preposterous supposition that something like a “Facebook,” or a “Twitter,” or a “Google,” could actually have intrinsic value that could be held in one’s hand.
These things are ‘worth’ something because foolish people with more money than sense continue to value them without any real though put into it.
More likely Draghi spoke, as the chart seems to indicate. Bitcoin is bigger in Europe than in the states, and growing in Asia. Hell, it's a worldwide alternative to state currency monopolies managed by elitist bankers.
Bitcoin may not be a new global reserve currency, but it may show the world that “money” as a store of value, can be anything that is useful and outside the control of politicians.
That could be something like oil or gas ownership certificates, micro-chips, food production certificates - or it may just bring back gold or silver.
WITHOUT A DOUBT - it is the US Dollar (and our Progressive, nanny-state Government that depends on universal acceptance of the dollar and money printing) that has the most to lose.
Crypto-currency is valuable because it takes work to produce them, they are limited, and they offer utility of use that far exceeds anything else. It's a new medium in the age old search for something to use in the exchange of goods a services.
Completely agree.
I will add however the success of any “money” depends upon a number of characteristics it possesses. Ease of use, security, storage, transportability, acceptance, and many others come to mind.
“this crypto-currency invention is turning into a historic worldwide phenomenon with huge consequences for the current establishment banks and governments.”
And at that point, government will declare it economic terrorism, and move against it nationally and internationally. The stroke of a pen could make it as pursued as internet child porn. I cannot see a scenario where they would allow it to become real.
Gold still makes more sense simply because it is much more difficult to confiscate than something the NSA could roll up in an afternoon.
How about a $100,000 fine (in today's dollar), and 10 years in prison?
The next step for libertarians, while denouncing the federal government (and all governments), support the destruction of the nation state (toward a one-world-government) in the name of “freedom”.
In the end (the Godless form) of libertarianism will one side of the same coin as international socialism/Marxism~!
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