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  • vonmiser vonmiser Jun 10, 2011 1:20 PM Flag

    Creation of a currency

    Here is a post I made a few days ago in which I said what I think about Bitcoins and why I don't think they would work any better than paper:

    Batshwing asked:

    >>So let me put this to you three (I hope others will join too) as a
    >>question: What is the actual difference then between Bitcoins'
    >>value as money versus gold if we assume that neither's supply can
    >>be expanded at will and neither is based on borrowing.

    And I started my reply with:

    >These assumptions are in practice unenforceable, but for the sake
    >of the discussion here are some differences: ...

    Now, here is how you interpreted my stand:

    Hapiwondrer said:

    >Otherwise it seems impossible to discuss your Topic of “Creation of
    >a currency” simply because you apparently are unable to accept the
    >notion that banknotes are fraudulent, whether they are bits or
    >bark, and persist in attempting to convince others that they are
    >not. Whether this springs from an effort to propagandize what many
    >of us consider an absurd fraud, paper or electronic currencies, or
    >whether you actually haven’t arrived at the conclusion that they
    >are, is unknown. Only you can make that “perfectly clear”.

    So, I will demonstrate how one can clearly answer the two yes/no questions that I asked you (three times):

    1. I do not believe that a bimetallic currency standard is a workable solution, and

    2. I do not believe that any economy can function competitively in the present world if ALL trade is conducted with physical gold (or silver, or copper).

    See ... it was just a yes/no thing.

    Just so you know the history of discussions on this board, a lot of energy has been spent by many of us (over a period of years) discussing the issue of a practical but less fraud-prone form of money than what we have now. The conclusion some, or maybe even most of us reached is that the system would probably be good enough for practical use if gold were used as a backing and freely convertible at all times. "Freely convertible" means that there would be no emergencies during which it is not convertible, that its "appreciation" would not be taxable, that it would be acceptable as a form of payment in exactly the same way as paper is nowadays, etc. In simple terms, a true dual currency system.

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