Quote:
Originally Posted by slang
As legal tender, you’re right. But what about other legal useful possibilities? Maybe.
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Review the origins of 'plastic'. Diner's Club was created in 1949 when its founder paid for a restaurant meal with a cardboard charge card. That is all it was. A new version of 'letter of credit'.
From that was spawned something different - a credit card. The credit card was not just a 'letter of credit'. It was also a bank loan.
And then something different, called a debit card was created maybe twenty years later.
None of this is replacement for currency. It simply expands and enhances a flexible currency.
Unfortunately for Bitcoin, it has not really done much to enhance 'legal' activity. And its speculation does not address another important concept in productive economics - investment.
Where as a stock, bond, or derivative is a speculation to create new products or provide financial stability, Bitcoin speculation is only gambling. Nothing productive is generated (financed) by Bitcoin speculation.
Whereas Diner's Club was created to address a need - addressed a liquidity problem. Bitcoin has not really enhanced the currency.
Other electronic payments systems (ie Apple Pay, Paypal) do enhance the liquidity of currency. We can expect those the be enhanced / innovate / expand into new forms of economic / financial activity.
Too many foolishly see all government as evil. Some governments are. In productive societies, government is always part of a solution. Federal Reserve bank is a perfect example. Countries with the most stable currencies all over the world have Central Banks.
When the Central Bank is run by people who know, well, we all recently learned the value of a Central Bank. In 2007, we were facing symptoms of a second Great Depression. And this time, the Central Bank addressed the problem. Unlike in 1929 when the Central Bank made the problem worse.
We came that close to what would have been unemployment numbers of maybe 20%. Many today do not realize what was meant by the statement back then, "You have eight hours to save the economy." We know it was that bad. Disaster did not happen because our Central Bank, in coordination with others, properly addressed a major liquidity problem. What other 'currency' could address such problems? Even gold could not address that near disaster.
BTW, another factor essential to a stable economy - open markets.