Bitcoin has theory and history on its side

Bitcoin-coins

The Bitcoin phenomenon has now reached the mainstream media where it met with a reception that ranged from sceptical to outright hostile. The recent volatility in the price of bitcoins and the issues surrounding Bitcoin-exchange Mt. Gox have led to additional negative publicity. In my view, Bitcoin as a monetary concept is potentially a work of genius, and even if Bitcoin were to fail in its present incarnation – a scenario that I cannot exclude but that I consider exceedingly unlikely – the concept itself is too powerful to … [Read more...]

I am back! – An update.

Paper Money Collapse Second Edition

Turns out my ‘final’ blog was not so final after all. Yes, it is true. I am coming out of blogger retirement. It has only been a few months since I called it quits but here I am again. Why did I change my mind? First, I received a lot of very nice feedback from people who enjoyed my blogs and encouraged me to keep writing. It was great to see that some people really liked what I had to say and had a genuine interest in my views. Second, it was fun and I missed it. I simply enjoy blogging and writing, and I remain passionate … [Read more...]

Could Bitcoin be the money of the future?

A physical Bitcoin-coin

The crypto-currency Bitcoin is still merely a speck on the global monetary landscape. It is young, experimental, and for all we know, it may ultimately fail to break into the monetary mainstream. However, on a conceptual level I am willing to call it a work of genius and arguably the most exciting development in the field of money for more than 130 years. Let’s say since the start of the Classical Gold Standard in 1879. Does this sound like hyperbole? Well, let me explain. The Decline and Fall of Capitalist Money The 20th … [Read more...]

The death of banks – and the future of money

Dodo

UK Chancellor George Osborne and Bank of England Governor Mervin King last week announced another round of fiscal and monetary stimulus measures, including steps to ease the funding for banks and allow them to extend more loans. If these measures were hoped to instil confidence they must be classified as a failure. We have lived through quite a few years of unprecedented and fairly persistent monetary accommodation and occasional rounds of QE by now, and I doubt that yet another dose of the same medicine will cause great … [Read more...]

What gives money value, and is fractional-reserve banking fraud?

Falling 100-dollar bills

I thought I should address a couple of points that I consider to be misconceptions and that frequently come up in discussions with the audience or other speakers when I present my views on the fundamental problems with fiat money. I am not always in a position to correct these misconceptions right then. They are often woven into questions on other points and I have to leave them uncommented as not to disrupt the flow of the debate. My book is, I believe, quite clear on these points, so I could simply refer people to Paper … [Read more...]

The second crisis of socialism

Communist Propaganda Poster

 The world is facing the worst financial crisis since at least the 1930s "if not ever," the Governor of the Bank of England said last week when he explained to an increasingly sceptical and weary public the Bank's decision to print yet more fiat money and use it to buy yet more government bonds. I doubt that his words or his actions will do much to restore confidence. And they will not mean an end to this crisis. What type of crisis is this? This is a financial crisis for sure. Its root causes are firmly located in money, … [Read more...]

Bitcoin, gold and the demise of fiat money

Falling 100-dollar bills

I am intrigued by the Bitcoin experiment - the attempt to launch a virtual currency as an alternative to the current global patchwork of local state fiat monies. Bitcoin has recently been hotly debated in the online community and among libertarians, and has now aroused the interest of the mainstream media and the political establishment.  Bitcoin's challenges seem to be mainly operational - related to computer and internet security and cryptography, which is of paramount importance to the Bitcoin project. These are areas in … [Read more...]