Articles

Bitcoin: Competitive Currency

December 30, 2019


Bitcoin is basically a money like any other
money. You can spend it on things, you can pay people,
except instead of being in physical dollars, where you can hold dollar bills, these coins
exist on computers and you hold the coins on your computer. Because it acts very much like gold, you can
apply many of the same rules, and so one of the ideas is that you don’t need a complex
new system of regulations or a complex new law to be able to govern Bitcoin. You can go with the same old property rules
and the same old procedure rules, uh, that govern other forms of property. So the benefits of competing currencies are
the benefits of any kind of competition. You have more suppliers and so you have lower
prices, essentially, so for money, that means lower transaction costs, for instance, and
you have higher quality. Now, whatever those qualities for money are,
are something to be determined by the market. Maybe, privacy is a quality of money that
we want, or maybe, neutrality between creditors and debtors is a quality we want. It’s essentially allowing the market to satisfy
consumer demand. The Legal Tender Act and legal tender laws
generally around the world act as a kind of monopoly advantage to central bank currency. The downside of competition is, from the government’s
perspective, they’re no longer able to able to effect monetary policy in the way that
they would like to. Now, many would say that the legal tender
laws are necessary, and allow the government to conduct monetary policy. So, in a sense, having a monopoly power is
good for the government. Now, whether you think this is a good thing
or a bad thing is gonna depend on your view of government. Some would have the view that because the
government is all of us, we want to confer a sort of monopoly privilege on the government. And some have the view that the federal government,
at least, is an entity separate from us, and is beholden to all sorts of special interests,
and it’s subject to all sorts of political pressures that don’t necessarily narrow
down to the good of all of society, and so giving them this monopoly is really not great
for society writ large. Many think that the real benefit of Bitcoin
is going to be in settlement across borders, and going to be in places in the developing
world where they don’t have the kind of monetary stability that we have in the U.S. No one has any doubts that something that
cost a dollar yesterday is going to cost a dollar today. But this is not true in developing countries
like Zimbabwe or in, in places like, Argentina, for instance, where they have major currency
problems. So these countries are using Bitcoin as a
store value and they know that it’s gonna fluctuate less, the price of Bitcoin is gonna
fluctuate less, and perhaps it might even appreciate more than their own currency. So, in the developed world, many think that
Bitcoin plays a tangential role, which is one reason why some people say if you were
to repeal legal tender laws with respect to digital currencies, it wouldn’t be that
big of a deal. But it’s really in the developing world,
and in places that don’t have stable political regimes and stable monetary situations that
something like Bitcoin, which isn’t susceptible to political pressures is gonna be able to
thrive.

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5 Comments

  • Reply Bluesky April 9, 2017 at 8:10 pm

    Legal tender laws are unconstitutional. We have a coinage act of 1792

  • Reply Storm Shadow April 9, 2017 at 9:07 pm

    dummies, bitcoin doesn't work in a forest lmfao or in a power outage
    how f*cking stupid are you masses of sheeple?!? f*cks sake… hey I got these invisible magic beans… trust me lol I'll sell them to ya for all your gold and silver
    ; )
    from precious metal coins… to worthless paper reserve notes… to imaginary concept written in 1's and 0's…
    f*cking geniuses lmao X-D

  • Reply spicywatermelon April 9, 2017 at 9:32 pm

    couldn't everybody have infinite also I DON'T OWN A COMPUTER I CAN'T AFFORD ONE.

  • Reply fulltimegeek April 10, 2017 at 1:31 am

    Bitcoin is probably too complicated for most people. I would suggest everyone join STEEMIT and earn money (STEEM) by blogging and commenting. The only thing you invest is your time.

    Why do it for free on Facebook?

  • Reply Jim V August 30, 2017 at 8:25 am

    As Obama said about the dangers involved with the expansion of bitcoin…."it would be like every single person having access to a Swiss bank account which they can access from their pocket" (as if this is a bad thing)

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