With the stroke of a pen, President Donald Trump may have just accomplished what most observers thought impossible: he’s made the Petro relevant.
Bitcoin and Blockchain
In the ideal world, you invent something wonderful, the world celebrates and starts using it. You get rich. We can dream, can’t we?
Wyoming has a thin population base, astonishing natural beauty, and a wonderful crew of politicians and regulators who believe in independence, innovation, and technological progress. Thanks to some wise activism from knowledgeable people in the space, the legislature just passed a series of bills that will make Wyoming something of a safe space for crypto.
There are two important differences between modern cryptocurrencies and the competitive monies F.A. Hayek envisioned.
It is absolutely essential to understand the distributed model even to have a first-level conception of what cryptocurrency really is. It is not a proprietary product. It is not a company. It is not even a brand. It is a technology. It is a technology that, by design and structure, doesn’t have an owner – or, more accurately, it is owned by anyone and everyone. It is a distributed ledger. The purpose of it is to carefully delineate ownership claims and provide a chronological and immunity audit trail of changes in ownership rights. Bitcoin is a token that provides evidence of authority and access to make changes in the ledger, and thereby absorbs and reflects the value of the services provided by the ledger itself.
Many people disagree with government regulation of cryptocurrencies and initial coin offerings (ICOs), but one could do a lot worse than Switzerland’s financial regulator, Swiss Financial Market Supervisory Authority (FINMA).
Ever since the invention of cryptocurrency, people have asked whether governments will just create their own to compete directly with private issuance. Many governments have talked about doing so. In the greatest of ironies, it was Venezuela (socialist “paradise” of hunger, poverty, and massive emigration) that has made the most public attempt with the pre-sale of a new token called the Petro. It was a fiasco.
Liberty Street Economics, the New York Fed’s blog, recently did a question-and-answer session with Fed economists Michael Lee and Antoine Martin about cryptocurrencies. It’s a largely neutral and factual interview, but the economists do make one provocative comment: “Cryptocurrencies arguably solve the problem of making payments in a trustless environment, but it is not obvious that this is a problem that needs solving, at least in the United States and other advanced economies.”
The parable of top-down socialism vs. bottom-up Bitcoin tempts one to adopt a general theory of the relationship between ideas and social change. It might be the case that bad ideas come from the top down and good ideas from the bottom-up, as a general expectation and principle. That seems to cover most use cases, until the point comes when liberal intellectuals become hugely influential in academia. We’ll wait a long time for that to be the case.
We’ve worked to counter the negative opinions of people at once-mighty institutions like the Bank for International Settlements and on. And the research you read here truly matters. AIER is not just another Medium account; it is one of the world’s most respected voices in economics. We have both the credibility and longevity.
To win this battle requires both theory and practice. The sustainability of this revolution depends on both. So please pull out those wallets and donate today. The AIER needs you. Crypto needs you. The future of freedom needs you.
Blockchain technology won't truly be pervasive until people gain enough intuitive understanding of the technology to trust it. That could be a slow process.
It only takes a quick glance at recent news to know Bitcoin is volatile; its fluctuations in price have made headlines for months now. But exactly how volatile is it relative to commonly used currencies, and how does that affect this cryptocurrency’s ability to actually be a usable medium of exchange?