Topic: Economic foundation of Bitcoin from the perspective of Denationalization of Mone - page 2. (Read 293 times)

I think that the author's denationalization means that Bitcoin replaces legal currency. The current state is that sovereign countries will not abolish banks. As individuals, Bitcoin is more like an investment behavior. I don’t think currency denationalization will play a key role in the development of Bitcoin. The three main factors that promote the development of Bitcoin are: developers, users, and mining pools. Although developers can determine the technical architecture of the Bitcoin network, it is difficult to influence Bitcoin price trends. The main promoters of the recent hot ICO are some veteran bitcoin users, but the rapid rebound of bitcoin prices shows that the key factor that really drives bitcoin's stock price is the major mining pools of bitcoin. All in all, Bitcoin is completely decentralized, not controlled by the government, let alone regulated by the existing banking system.

Yes, this is our status quo, we are forced to accept it, and we are forced to use it. But when Bitcoin was born, Bitcoin gave us new choices. The government cannot control Bitcoin, nor can it eliminate it. When we choose Bitcoin, we not only get the freedom of wealth, we also get the freedom of thought.

We did not take it for granted - we were forced to accept it, forced to use it. And lack of economic education (there is no economic education in school - guess why. Why we have religion, art in school and not economy? Why no one teach us how interest rates affect loan installment? Because it is easier to manipulate population that dont know how money works)

No one will abolish the central banks. No on will stop governments from issue and control the money of a nation:

Mayer Amschel Rothschild: "Permit me to issue and control the money of a nation, and I care not who makes its laws!"

my view.
companies/communitys come and go/change. make and lose money..
so yea having them loyalty card 'credits' may seem good now. but no guarantee they will be a thing in 2-100 years

governments are (in best case) advocates voted in by the citizens. so they represent the citizens. and a government would always exist longer than any company would

governments should monitor and regulate the general citizen 'money' to ensure there is always something people can use as a general medium of exchange recognised nationally and stable(wishful thinking) but governments should not stop companies/communities from having their own optional extra choices of other currencies
EG whether it be grocery store loyalty token accounts
EG whether it be community tokens
EG whether it be national tokens
EG international medium of exchange to hedge against fiat remittance markets

replacing government regulated currencies. and just have a single crypto that all citizens are pegged to. is not a free option. it becomes the only option. which in of itself would become its own problem

being a second option a free option. solves more problems than it would create being the 'single world currency'

I think in the early days of money, when we used shells, paper money, copper money, there had to be a central mechanism for that. Otherwise the monetary system will not develop.

Of course, money becomes a toy made by centralized institutions, and it is also a necessary requirement of state centralization. With the advent of bitcoin, a decentralized peer-to-peer electronic cash system, we can fully envision a decentralized, degovernment monetary system that is more efficient and fairer.

Although I think bitcoin will have a good development in the future, I have not yet thought about the specific development. There may be many difficulties to overcome, but I believe that one day bitcoin will win over fiat currency.

We take it for granted that currency should be issued by the government not by any private institution. But when Bitcoin was created and accepted by more and more people, it occurred to us that it's not an exclusive right for government to launch currency and money can also be electronic and digitized. When increasing number of people began to realize that, our minds got liberated. A well-known Austrian economist Hayek elaborated this economic foundation in Denationalization of Money, published in 1974. I believe many of you here must have read it. He inspires us to understand the role of Bitcoin in the era and the economic foundation for Bitcoin to perform its monetary function.

I strongly recommend this book because it can systematically explain some basic knowledge in economics and give you more confidence and strength. Friedrich August von Hayek, an outstanding British economist and political philosopher born in Austria, the winner of the Nobel Prize in Economics in 1974, is widely regarded as one of the most important members of the Austrian school of economics, one of the most influential economists and social thinkers in the 20th century. He adheres to free marketing and his theory is verified when Bitcoin was created and extensively employed in the payment system of human society.

In 1976, Hayek published his last economics work---Denationalization of Money where he overturned the orthodox concept of currency system: since free competition is the most efficient in the general commodity and service market, why can't it be introduce to currency field? He put forward a revolutionary proposal: abolish the central bank's monopoly on currency creation, private currency and free competition are permitted. In this competition process, the best currency will appear.

Hayek concluded from theory and a detailed investigation and analysis of history that free competition of currency can prevent the recurrence of severe inflation and deflation, which are still plaguing our world today. Free competition of currency can also deal with cyclical depressions and unemployment, deep-rooted diseases in the current world economic system.

In the long run, we always have an illusion that institutions like government, of democracy or monarchy, will act in accordance with the general interests. If that's true, it should be reliable to hand over the currency to the government. But the fact is that the those institutions cannot control inflation, and the fiat we have is rapidly depreciating every year. No country can maintain the purchasing power of its currency at the previous level. Government's owning currency equals to the trend of its devaluation.

Hayek broke the illusion. He believes it impossible for the government to work for the general good. In his view, we should not be too obsessive about the government's credit since the efficiency of competition is much higher than that of government administrative monopoly, competition will select currencies with long-term stable value. Therefore, the superstition of currency’s nationalization strengthened by Keynesianism should be dispelled, private competitive currencies are allowed and the function of the government is to provide a legal and supervision framework for orderly competition of private currencies.

Compared with the Austrian liberal school of economics, the Keynesian school left a whole generation of economists advocating fiscal intervention. The administrative intervention of the major governments has never stopped. Whenever crisis strike, like covid-19, printing machine are starting anew to devalue fiat faster and faster. It seems that the government has solved the temporary economic difficulties, it is actually seeding fatal dangers to the entire economic system. The bull market of Bitcoin in 2021 was carried out on the basis of the government's depreciatory legal tender.

Then we can clearly feel the value of Bitcoin as a free currency. It has established a brand new system controlled by mathematics and algorithm. Fair, open, and transparent to everyone in that no one can interfere, tamper with or control Bitcoin. Bitcoin has built up a free currency system that is equal to all everyone. All governments must operate under the uniform rules of Bitcoin, and no one can cheat. Greater monetary power implies absolute obedience to Bitcoin rules.

That’s the new order Bitcoin brings to humans, which is bound to evolve into a novel human civilization. What’s your point?