I would say that demand for anonymous money coupled with first mover advantage seems to prop up bitcoin.
One long run scenario is this -
Almost all of the current developed nations that are not resource rich will have issues with their currency. In the absence of strong democratic will (a commodity in great shortage), growing budget deficits due to an aging population will result in the invisible tax, inflation, being used for effective relief. Nobody knows how long the resource exporter nations will continue the dance of accepting currency that isn’t backed by something solid or effectively limited (like bitcoin).
What will really change bitcoin’s fate is some small nations using it as a currency (post-revolution, maybe) Then, a money laundering crackdown in the US and EU would not be able to halt it.
What will really change bitcoin’s fate is some small nations using it as a currency
I am unpersuaded by your argument that that any nation would do that (because nations that cannot make a credible commitment to good monetary policy can just peg their currency to the dollar). Much more likely IMHO that some wealthy actor like Tehran or the Chavez administration will increase the appeal of accepting and holding bitcoins by offering to swap bitcoins for, e.g., heating oil as a way of sticking it to the US government.
I would say that demand for anonymous money coupled with first mover advantage seems to prop up bitcoin.
One long run scenario is this -
Almost all of the current developed nations that are not resource rich will have issues with their currency. In the absence of strong democratic will (a commodity in great shortage), growing budget deficits due to an aging population will result in the invisible tax, inflation, being used for effective relief. Nobody knows how long the resource exporter nations will continue the dance of accepting currency that isn’t backed by something solid or effectively limited (like bitcoin).
What will really change bitcoin’s fate is some small nations using it as a currency (post-revolution, maybe) Then, a money laundering crackdown in the US and EU would not be able to halt it.
I am unpersuaded by your argument that that any nation would do that (because nations that cannot make a credible commitment to good monetary policy can just peg their currency to the dollar). Much more likely IMHO that some wealthy actor like Tehran or the Chavez administration will increase the appeal of accepting and holding bitcoins by offering to swap bitcoins for, e.g., heating oil as a way of sticking it to the US government.
When I think of your scenario, I find it much more plausible than mine. Thanks, Richard. I update my belief.