{"id":216,"date":"2014-06-19T05:52:00","date_gmt":"2014-06-19T05:52:00","guid":{"rendered":"http:\/\/blog.holytransaction.com\/privatise-pound-replace-it-with-bitcoin\/"},"modified":"2014-06-19T05:52:00","modified_gmt":"2014-06-19T05:52:00","slug":"privatise-pound-replace-it-with-bitcoin","status":"publish","type":"post","link":"https:\/\/holytransaction.com\/blog\/2014\/06\/privatise-pound-replace-it-with-bitcoin.html","title":{"rendered":"Privatise the pound and replace it with bitcoin, says free-market thinktank"},"content":{"rendered":"
\nInstitute
\n of Economic Affairs says governments should allow competition on a
\nlevel playing field between all alternative forms of money.<\/i><\/b><\/div>\n
\n<\/div>\n\n\n\n\n
\"A<\/td>\n<\/tr>\n
\nA man enters a bitcoin conference in New York. Photograph: Mark Lennihan\/AP<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n
\n(TheGuardian<\/a>) UK should privatise the pound and replace it with a
\ncryptocurrency like bitcoin, according to a paper published Wednesday by
\n the free-market Institute of Economic Affairs.<\/div>\n
\nKevin Dowd, a
\nprofessor of finance and economics at Durham University, says that
\nalthough bitcoin isn’t the first example of private money, it is the
\nfirst that governments can’t shut down. Therefore, he says, authorities
\nshould admit that it’s here to stay, and allow competition on a level
\nplaying field between all alternative forms of money.<\/div>\n
\n<\/div>\n
\nThat might
\ninclude allowing taxes to be payed in cryptocurrencies such as bitcoin<\/a>
\nand dogecoin<\/a>, or even fully privatising the pound, selling off the right
\n to mint the currency to the highest bidder.<\/div>\n
\n<\/div>\n
\n“Let’s suppose that
\nbitcoin became a very prominent currency,” Dowd told the Guardian. “[To
\nensure a level playing field], the government itself would accept
\nbitcoin in tax payments. So, in effect, the government should not be
\nfavouring its own currency, or any particular currency, through any of
\nits unique powers. Nor have regulations against them.<\/div>\n
\n<\/div>\n
\n“The natural
\n analogy is with some of the old, bad, monopolies like British Gas or
\nBritish Telecom. Telecom is a very good example: for a long time, we had
\n a government monopoly, which stifled innovation, and the service was
\npoor. Once that got opened up, competition opened, new innovation
\nprospered, and we got all sorts of innovation that we couldn’t possibly
\nanticipate, and we’re a lot better off for it.”<\/div>\n
\n<\/div>\n
\nDowd places
\nbitcoin at the pinnacle of a historical trend of government crackdowns
\non attempts to create private money. The Liberty Dollar, a physical,
\ngold-based private mint, and e-gold, a digital, gold-based e-currency,
\nboth ended up with their creators and proprietors in court, the former
\non charges of counterfeiting, and the latter over allegations of money
\nlaundering.<\/div>\n
\n<\/div>\n
\nBut Dowd argues the charges were
\npolitically-motivated protectionism. “Counterfeit 101 is that you try
\nmake the fake look like the real thing,” he says, “and the whole
\nbusiness model was predicated on saying that [the Liberty Dollar] is
\nsuperior to US currency.”<\/div>\n
\nBecause Bitcoin is decentralised, it’s
\nsignificantly harder to crack down on using the courts \u2013 “you could shut
\n the whole web down, but they can’t do that,” Dowd adds \u2013 and so
\ngovernments can’t stop its rise. If it does become popular, they will
\nhave to deal with it some other way.<\/div>\n
\n<\/div>\n
\nThere’s a lot standing in the
\n way of cryptocurrencies before they reach that success, however. For
\none thing, Dowd writes, “to displace existing state currency they not
\nonly have to perform the basic functions of money at least as well as
\nstate money, they probably also need qualities that transcend the way in
\n which state money works.”<\/div>\n
\n<\/div>\n
\nFor some advocates of bitcoin, as well
\n as for Dowd himself, those qualities come in the form of protection
\nfrom inflation: the cryptocurrency will only ever have 21m coins
\ncreated, ensuring that it will always “hold its value” (though also,
\ncritics claim, rendering the bitcoin economy prone to deflationary
\nslumps).<\/div>\n
\n<\/div>\n
\nFor others, they come from the purely digital nature of the currency. Venture capitalist Marc Andreessen describes it<\/a>
\n as the financial equivalent of the internet, saying “The internet was a
\n new way to transmit data. Bitcoin’s a new way to transmit money. It’s
\ngoing to take a long time. The good news it’s a big opportunity. Money
\nis a very big deal, and so if you can build a new way to deal with
\nmoney, it’s very important and valuable. It just takes time.”<\/div>\n

Open your free digital wallet here<\/a> to store your cryptocurrencies in a safe place.<\/p>\n","protected":false},"excerpt":{"rendered":"

Institute of Economic Affairs says governments should allow competition on a level playing field between all alternative forms of money. A man enters a bitcoin conference in New York. Photograph: Mark Lennihan\/AP (TheGuardian) UK should privatise the pound and replace it with a cryptocurrency like bitcoin, according to a paper published Wednesday by the free-market […]<\/p>\n","protected":false},"author":1,"featured_media":752,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7,37,542,649],"tags":[704,1201,1300],"yoast_head":"\nPrivatise the pound and replace it with bitcoin, says free-market thinktank -<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/holytransaction.com\/blog\/2014\/06\/privatise-pound-replace-it-with-bitcoin.html\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Privatise the pound and replace it with bitcoin, says free-market thinktank\" \/>\n<meta property=\"og:description\" content=\"Institute of Economic Affairs says governments should allow competition on a level playing field between all alternative forms of money. 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