Politicians and central bankers of every country are responsible for maintaining the stability and integrity of their country’s currency. Unfortunately the people in charge of maintaining currency do not always act in the best interests of the people that they are meant to represent. Historically politicians and central bankers are often short-sighted. Politicians may be unwilling to make spending cuts that could offend their constituent base. Central Bankers frequently put more money into circulation to solve short-term issues associated with deflation instead of letting markets operate freely. This behavior may create instability in fiat money (government issued currency.) Bitcoin might be the 21th century solution to that problem. Bitcon is a digital currency that is not issued by any government; it only exists in cyberspace. Bitcoins can be bought and sold anonymously anywhere in the world. New Bitcoins are created by at a fixed rate by an algorithm, not a central banker. There are currently about 11 million bitcoins in circulation and the total number of bitcoins will be capped out at around 21 million. Bitcoins are primarily used to pay for online gambling, goods and services in countries that do not have Visa or Mastercard (eg. Cuba and Iran), illicit goods, and also to launder money. Expect Bitcoins to come under more government scrutiny as politicians realize that the currency could undermine the financial sovereignty of national governments.
This interview was recorded by Reason TV
This debate happened on Al Jazeera television.