Bill Still - Gold Backed Cryptos?

Are gold-backed cryptos the answer? G. Edward Griffin thinks so.






Imagine a world in which you can buy anything in secret. No banks. No fees. No worries inflation will make today's money worth less tomorrow.

The digital currency Bitcoin promises all these things. And while it's far from achieving any of them -- its value is unstable and it's rarely used -- some have high hopes.

"There will be alternatives to the dollar, and this might be one of them," said former U.S. congressman Ron Paul. If people start using bitcoins en masse, "it'll go down in history as the destroyer of the dollar," Paul added.

It's unlikely that Bitcoin would replace the dollar or other government-controlled currencies. But it could serve as a kind of universal alternative currency that is accepted everywhere around the globe. Concerned about the dollar's inflation? Just move your cash to bitcoins and use them to pay your bills instead. Tired of hefty credit card fees? Bitcoin allows transactions that bypass banks.

Related: What is Bitcoin?

Even economists who embrace the power of central banks, like University of Michigan professor Miles Kimball, recognize the currency's potential.

"Bitcoin really shows governments are behind the curve," Kimball said. "It demonstrates there's a demand for an electronic equivalent of cash."

Digital payments make buying items internationally a smoother process, because exchange rates are gone and there are no cumbersome bank regulations or fees. It also enables people to make payments in areas without bank access or where carrying cash can be dangerous.
How I make money mining bitcoins

Related: Bitcoin worth $9M buried in garbage dump

But don't expect governments and banks to let Bitcoin take over so easily. Financial institutions will lose business if people stop using their payment systems, and central banks like the U.S. Federal Reserve would lose their ability to help slow and speed up economic activity. Paul expects banks to lobby and authorities to crack down

"I suppose they could just try to crush Bitcoin, but that's the wrong way to do it," Kimball said. "Governments should be creating their own version of Bitcoin. They should be ashamed they haven't."

"In order for currencies to be 'exchangeable' they have to be backed by something," is the remarkably ironic initial comment from none other than debaser-of-the-entirely-fiat-dollar Alan Greenspan when asked about the "bubble in bitcoin," by Bloomberg TV's Trish Regan.

Unable to "identify the intrinsic" backing of Bitcoin (or see bubbles in equity, credit, real estate, or greater fools) Greenspan is, apparently, capable of identifying Bitcoin "as a bubble," because "there is no fundamental means of "repaying' it by any means that is universally accepted." The farcical double-speak continues as the Maestro does a great job of making Bitcoin (which Ron Paul earlier noted could be the "destroyer of the dollar") look even better than the readily-printed fiat we meddle with every day. "when we were on the gold standard, [currencies] had intrinisc value which made people willing to exchange their goods and services with no question." "Alternatively, when we went into "currencies", it was the "backing" of the issuer of the currencies... whose "great credit-standing meant his checks could circulate as money.""

So either its backed by real physical metal with intrinsic value -- or the promise of someone...(increasingly politicians of course) with good credit (or a big army)?" fiat currency

So coming soon the BuffettCoin or MuskCoin (oh wait reputation), or the GatesCoin?

1 comment:

  1. Don't back currency (crypto or otherwise) but actually use gold and silver as money in the form of coins and allocated storage with a credit system like Peter Schiff has done.

    ReplyDelete

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