Bitcoin Really Is an Existential Threat to the Modern Liberal State
By Evan Soltas - Apr 5, 2013, Bloomberg
So far, Bitcoin is not a big deal. Its total value in circulation was $1.4 billion as of this week. That's equivalent to the currency stock of a small nation -- somewhere between Iceland and Uruguay -- and just one-thousandth of the total value of U.S. dollars in circulation. The volume of transactions in Bitcoin is growing only slowly, relative to the massive increase in demand for the currency: This discrepancy is strong evidence that Bitcoin’s rise is a speculative bubble.
Nonetheless, Bitcoin raises some interesting questions. One is whether it might undermine the modern state -- which, for many of its libertarian-anarchist advocates, is the whole idea.
Technology enabled governments to grow more powerful and more centralized in the 19th and 20th centuries, as Tyler Cowen, an economist at George Mason University, has argued. The intriguing possibility is that technologies of the 21st century -- such as Bitcoin -- might push the other way.
Physical cash is used in a rapidly shrinking share of transactions: 27 percent in 2011, 23 percent by 2017, and so on, according to Javelin Strategy & Research, a financial-services research firm. The central banks of Sweden and Nigeria have both declared goals of a cashless economy. In Europe, the volume of non-cash transactions is forecasted to rise by 7 percent per year, despite economic stagnation.
(More here.)
So far, Bitcoin is not a big deal. Its total value in circulation was $1.4 billion as of this week. That's equivalent to the currency stock of a small nation -- somewhere between Iceland and Uruguay -- and just one-thousandth of the total value of U.S. dollars in circulation. The volume of transactions in Bitcoin is growing only slowly, relative to the massive increase in demand for the currency: This discrepancy is strong evidence that Bitcoin’s rise is a speculative bubble.
Nonetheless, Bitcoin raises some interesting questions. One is whether it might undermine the modern state -- which, for many of its libertarian-anarchist advocates, is the whole idea.
Technology enabled governments to grow more powerful and more centralized in the 19th and 20th centuries, as Tyler Cowen, an economist at George Mason University, has argued. The intriguing possibility is that technologies of the 21st century -- such as Bitcoin -- might push the other way.
Physical cash is used in a rapidly shrinking share of transactions: 27 percent in 2011, 23 percent by 2017, and so on, according to Javelin Strategy & Research, a financial-services research firm. The central banks of Sweden and Nigeria have both declared goals of a cashless economy. In Europe, the volume of non-cash transactions is forecasted to rise by 7 percent per year, despite economic stagnation.
(More here.)
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