In the long term, the dollar is doomed. It was probably already doomed, having lost over 96 percent of its value since the Federal Reserve was created. A dollar today is worth less than 4 cents compared to a dollar before government policy began its destruction.
I’ve been observing and listening to what people around me are saying concerning recent events. It’s been interesting.
As we enter a new year, the running battle between the world’s governments and the world-changing technology known as “cryptocurrency” continues. As 2019 drew to an end, Swiss president Ueli Maurer asserted that Facebook’s digital currency (not a real cryptocurrency), Libra, has failed “because central banks will not accept the basket of currencies underpinning it.” Politicians want to regulate — or, if possible, kill — cryptocurrency.
Libra will not be a true cryptocurrency like Bitcoin or Ether. Neither its creation nor its transactions will be decentralized and distributed, let alone easily made anonymous. A “blockchain” is just a particular kind of ledger for keeping track of transactions. It does not, in and of itself, a cryptocurrency make.
Cryptocurrency seizes control of money from governments and puts it in the hands of people. With improvements in its privacy aspects, that’s only going to become more true. In short, cryptocurrency fuels freedom.
The International Monetary Fund refers to cryptocurrency only once in its 215-page World Economic Outlook for October 2018, but that reference is telling: “Continued rapid growth of crypto assets could create new vulnerabilities in the international financial system.”
If you thought the perpetual whining from law enforcement about encryption was about fighting terrorism, think again. It’s mostly about the money. Like other mobsters, politicians and their accomplices hate the idea of their rackets coming to an end.
In 2016, after a court slapped down the attempts of Kamala Harris (D-CA), then attorney general of her state and now a US Senator, to prosecute Backpage for “pimping,” I suggested that merely dismissing the charges was not enough. I am still of that opinion.
In economics, theorists will tell you “public goods” like lighthouses can’t ever be supplied by private, profit-seeking ventures. Meanwhile, right outside their window there are private lighthouses, provided in ways too varied and ingenious for the academic mind to comprehend, and too skin-in-the-game trial-and-error intuitive for the entrepreneur to even know how to explicitly describe.
The idea of digital gold is to take all the amazing attributes of gold and add the one thing it’s missing: portability. That’s what the “digital” part means. The magic of bitcoin is that it found a way to maintain all the very best properties of money found in gold and add to them the greatest portability of any money in existence with instant, near free global transactions.