*Ping*
“a young, plugged-in VC”
Viet Cong?
I’m waiting for true digital anonymity. It will be the end of the nation state.
Bit coin will never be anything. Because, countries can’t exist if they don’t control the currency. Bit coin people always argue that bitcoin has more merits than the dollar and other currencies. But that does not matter. Whether it has merit or not is not important.
When there is liquidity and widely accepted value, bitcoin will be something. But just like gold, if that were to happen, countries will just buy up most of the bitcoins. Then bitcoins will be no different than dollars.
But the important point is that there is no reason why one currency is truer than another. The question is, which currency do people believe in. The answer is, the currency they can use. If they can get paid in a currency and then walk to a store and buy something, pay rent, save it in a bank then its valuable. If not, at best its a new form of S&H green stamps.
Ping.
Here’s a little joke that those who have studied monetary history, monetary policy, and especially the history of America’s very own central bank known as the Federal Reserve may appreciate:
What’s worse than a fiat currency?
A fiat currency that is digitally maintained and used so that whoever controls the digital medium can shut down the currency with the press of a button.
Fun stuff.
How you gonna keep them on the tax plantation once they’ve seen the block chain?
Money is simply an efficient mechanism for barter between parties. If people put their faith in fractional reserve banking systems over-leveraged to the hilt with a small percentage backing it and the promises that governments will backstop any crashes, then crypto-currencies are not that much different. It just annoys the banking class that they don’t get to control it and lose their first mover advantage on creating debt/wealth by adding electronic zeroes.
For the skeptics in the crowd, the crypto-currencies are right out of the sci-fi books and are here to stay. Anytime a group of people decide to place their faith in one for more efficient transactions, they now know how to do it. It will be like stamping out pirating on the internet. The best bet is to embrace it and regulate it.