Incoming from Detlev Schlichter. He is back blogging. His second recent posting, the one after the one that just says he’s back, is about Bitcoin. He thinks that the Bitcoin principle, so to speak, even if maybe not Bitcoin itself, has a future:
Central bankers of the world, be afraid, be very afraid!
My own sense is that, just as Schlichter says, the world’s rulers are now stuck in a monetary prison of their own making, from which they cannot now extricate themselves. Quite a few of them understand approximately what is wrong with their current policies, even as many others of these people have no clue. Many others favour the current state of the banking system, because it enriches them even as it impoverishes most others. But even those banker/politicians who do understand what harm they are now inflicting upon the world and would like to stop, don’t know how to. It is one thing to be in a prison and to know that you are in a prison, quite another to escape from the prison.
To switch metaphors from the prison to the hospital, the world’s banking system is now alive rather than dead, but not in the sense that the patient is up and about, playing beach volleyball with its children like a tampon advert woman. It is alive merely in the sense that a terminally ill patient, lying in a hospital bed after a horribly intrusive death-postponing operation, sinking slowly rather than fast, is also alive rather than dead.
Only outside monetary influences, such as Bitcoin or such as variations on the Bitcoin theme, will bring back a world of true money.
The fact that, if you put some of your wealth into Bitcoin, you just might lose damn near the lot is a feature not a bug. Government guarantees that you won’t lose out no matter how unwise your decisions may prove to be are the problem, not the solution.
Schlichter spends quite a lot of his piece denouncing a certain Mark T. Williams, a finance professor at Boston University’s School of Management, but he ends his piece by quoting him again…
If not controlled and tightly regulated, Bitcoin – a decentralized, untraceable, highly volatile and nationless currency – has the potential to undermine this longstanding bond between sovereign and its currency.
… and agreeing with him! That’s a feature rather than a bug.
Welcome back to the blogosphere, Herr Schlichter.
LATER: And as I should have added, I am hosting a talk tomorrow evening about Bitcoin etc., given by Dominic Frisby (that’s Dominic’s thoughts on the recent Bitcoin disaster/price plummet (which Bruce Hoult explained here)). There is not a lot of room left for more would-be attenders, but there is, as of now, some.
Our current currency system is fiat money, money that’s money because the government declares it so by fiat. Bitcoin, for all its techiness and shady characters using it, has value because their uses value it.
In the old days, gold and silver coins were the main currency. If the government who coined it went down, the coin retained its value; you could at worst melt it down for its metallic content. That made metallic currency largely immune to the monetary and fiscal polices of the day.
You can’t melt down a Bitcoin. However, it’s has value because its users think it has value, becoming currency by market decree rather than government decree. That’s scary for central bankers who like to be able to pull the strings on their currency.
From now on I will not comment on anything to do with Bitcoin on this site.
The state of the banking systems these days reminds me a bit of the death of Marshal Tito in Yugoslavia, no one really wanted the brute when he was alive except those who did well out of him, but all were afraid of what would happen after he passed on, and they kept him alive (so they said) hacking the gangrenous bits off as best they could until they realised that no more could be done, and then the fuse was lit for the Yugoslav wars of the 1990s (albeit with other variables in the equation). No one stood on the fuse in time, and up it all went.
Look at the photo of the Ukrainian protestor on this page. Try and do *that* with any other kind of money.
Thank you, Paul!
You are a poor liar, Paul.
Surely, the big banks are too stupid to emulate any good features of Bitcoin.
Ha, ha, ha.
The hawks are currently watching the gerbil with unblinking eyes.
I fail to see why. Granted that fiat money systems can and eventually will be destroyed when the sponsoring government prints enough of the stuff, I should think that buying and hoarding gold or silver coins (at least if you have somewhere to keep them where the state can’t steal them) would be much more productive than gambling on Bitcoin.
Perhaps a few years from now, we’ll have real, robust, anonymous digital money. But I doubt it. After all, it would be much simpler, and effectively the same thing (and proven technology!) to bring back the numbered accounts that used to be available in Switzerland and Austria, but any country that tried to re-legalize those today would be placed under sanctions at least.
jdgalt,
A numbered account denominated in which fiat currency?
Just curious.
Without tight regulation….
Because 1 oz. gold=16 oz. silver
Because the dollar represents it’s equivalent in gold stored by da’ gub’mint.
Because the Mexican Peso, Italian Lira, and Greek Drachma.
Because, no matter what, 1 US dollar will purchase 2.8(I think) EC “worth” of stuff on island nations.
Oh, wait.
(see, I did all that without even HINTING at the NAZI economic model)
Robert Fisher – I scanned the address that you linked to and found that this person has received a total of 325 bitcoin donations totalling 6.1834BTC or around €2,760 at today’s price, all but the first of which were sent on or after 27th Feb, the day the article you linked to was published. If his picture only appears online in one location, that’s one hell of a response from a single blog post.
Try doing *that* with any other kind of money.