There is no free in liberty.


Saturday, August 24, 2013

Is Bitcoin really any different? Not in the long run.


Consider the dollar.

The dollar is theoretically limited  (in reality the dollar, as all national currencies, is subject to over creation, aka printing. This inflationary pressure  is in large part driving the interest in Bitcoin.) as a  currency within the US while the concept of a national currency is only limited by the number of nations on Earth meaning that that there are only as many national currencies as there are nations.

Now to bitcoin.

Unlike the dollar the Bitcoin is very limited in supply.  But what if bytecoin comes along, then gigacoin, followed by googlecoin and so fourth? There seems to be no limit on the number of bitcoin imitators possible.

While there might be a limited number of bitcoins within the subset of Bitcoin, the concept of Bitcoin is unlimited.  This stands in contrast to the world's various national currencies which are limited to the number of nations in existence.

Competition will utterly devalue Bitcoin unless it is adopted by particular nations  to the exclusion of its competitors, however that is not to say that other nations will not adopt one or more of Bitcoin's competitors to the exclusion of Bitcoin .. they most certainly would.

And how is that materially different from our current international system of free floating national currencies?


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