I’ve been thinking of cryptos a lot lately. It’s better than thinking about all this war crap, which is exhausting (you know the kid who does something that makes mommy and daddy laugh, so they do it like 5 more times in a row even though it has long ceased to provoke the original reaction? that’s these Syrian insurgents and the staged chemical attacks).
Overall, I find that cryptos suffer from many flaws that money has always had. By the way, these flaws are what led the world to adopt the current fiat system.
In the past, kings have had to use their authority to demand that taxes be paid in the national currency, in order for demand for that currency to exist.
Gold is great, but cryptos aren’t gold – they’re like a new fiat. Even so, gold’s benefits have also been gold’s weaknesses. Manipulation of gold stocks was used to manipulate the economy so that bankers could leverage their stocks into expanding their total assets. This is precisely a situation which would merit a competitive marketplace for money.
On the other hand, money is valuable as demand for it exists. In general, people demand money commodities because they perceive them to have the quality of being money. That is, habit is a huge factor in defining what people demand money and currency wise.
The problem with cryptos is volatility. They are reliable as “stores of value”, but only inasmuch as people perceive that value is stored in that particular “coin”. Once you talk about financing, then there’s going to be an inherent tension between “valuable” crypto and “cheap” crypto. Although, I suppose a gold/silver dichotomy could emerge over time where you have the rich man’s and poor man’s currencies.
Amazon, Alphabet, or Apple are companies which could uplift a crypto and create a perception of demand. But man, is that what we want? Do we want our cryptos to have value because “the king” is only accepting tax in that coin (i.e.: Amazon credits to pay for all amazon goods and services)?
Nevertheless, I think there’s a substitute here. Using crypto technology, one could create an asset-backed paradigm. There are a number of ways to do this. I suspect that success in this arena would immediately devalue “fiat” cryptos.
I suspect that the evolution of economic progress could someday be grouped into the following eras: barter -> commodity money -> nationalist fiat -> asset-backed cryptos (ABC). That is, ABC would be an entirely new economic paradigm. Not barter, but more attuned to real economic conditions than even commodity money. Both economic science and accounting practice would have to fundamentally change. It could just be the golden ticket to a libertarian future, in that it would “break” the Marx-observed relationship between capital ownership and power – which relationship, I believe, is the source of the nationalist/statist phenomenon (bourgeois “crony capitalist” as the prototype for fascist economics, which is inclusive of New Deal, Leninism, etc. – I’m saying that commodity money was like forcing people to stay in a single market when they might have broken out of into parallel, alternative markets).
