Thursday, June 13, 2013

Why Bitcoin is the Future, Whether it Survives or Not

Why Bitcoin is the Future, Whether it Survives or Not:
Writing in The Wall Street
Journal, Bob Gelfond of MQS Management (and a donor to Reason Foundation, the nonprofit that
publishes this website) talks up how Bitcoin ("an electronic
version of gold") represents the future:
The attraction of the Bitcoin is not
just the anonymity it provides to users (an anonymity that the U.S.
government has alleged some users have employed for money
laundering). Bitcoin is also secure against traditional forms of
counterfeiting. More important, the Bitcoin is designed to be
scarce and thus immune to inflation. There is a limit to the number
of Bitcoins—21 million—that is determined by a transparent rule and
not by the whim of a central banker....
It is likely that other digital alternatives to currency will
emerge, each one competing in the market to satisfy the needs of
users. The possibilities are limited only by the imagination. Here
is one:
Cloud-computing companies could issue certificates convertible
into an hour of premium computing. Prices for other services could
be quoted in terms of these certificates. The analogy is to
traditional gold-backed currency, which was redeemable into
physical gold at the option of the owner....
It is impossible to predict what kinds of money a truly free
market will create in an increasingly digitized world. But we can
be confident in predicting that just as markets improve the quality
of all products, they will do the same for money.

Read the whole thing here
Mercatus Center scholar Jerry Brito talks about Bitcoin,
including the recent speculative bubble that jacked up its price
despite the steady, pre-determined increase in its supply mentioned