Why Bitcoin Could Be Good For National Economies
There is a lot of talk about Bitcoin and crypto-currencies from a lot of different people. Many of them placard this technology as the new disruptive innovation that will allow humanity to escape centralized systems of control. Many of them discard it as a hype and soon-to-fail attempt to fool people into giving them their money. No point of view I have seen has really thought about or discussed how this technology can be used to subsidize national economies; not currencies, entire economies.
The United States Dollar is a national currency that is used as the primary currency in the United States. It is the currency used by both the general public, the US government, and many nations around the world. It is a fiat currency, meaning it is not backed by anything other than the word of the US Government that all debts will be paid. The government prints money at a somewhat constant inflation rate and taxes the people to return dollars back to the government’s central bank in order to curb the necessity to print more money faster. The value of the dollar drops with inflation when money is printed, which causes the people with the currency to have less buying power. This is proven by the 96% loss on the buying power of the dollar since 1913. Conversely, if the dollar underwent deflation, or the amount of dollars was limited to a specific ceiling, there would be more people with less dollars, the only form of money available to the general public. It would cause the nation’s economy to fail, which was predicted by Franklin D Roosevelt. Everyone would get poor before the the prices of things came down to match the deflation in monetary flow.
The solution to this economic conundrum is, as pointed out often by multiple Federal Reserve Chairmen, to continue inflation at a slow rate. With constant inflation, the dollars value is constantly, but slowly lost.
With the availability and use of open-source, self-regulating, crypto-currencies a new economic theory is being created. One that sends most older monetary theories on the way of the Dodo bird. Since the US Dollar is the currency that the United States government uses, the currency, and the amount of debt is based on the amount of dollars created.Allowing competitive currencies to exist within commerce and the general public in the United States would allow a larger, less damaging, national economy than an economy strapped to its government’s fiat currency would or could.
From the consumer standpoint, if the number of consumers using cryptocurrencies is greater than the number of consumers using fiat currency, then that would mean that in the sale of a car, or an airplane, only the taxes would have to be paid in dollars, which gives the consumer more dollars to spend, and more boats sold in crypto-currencies.
From the merchants viewpoint, it would allow for more boat sales. As our new currencies gain in value, consumers are able to make purchases of larger value items using crypto-currencies they mined or purchased at a much cheaper price or cost. A consumer who bought Bitcoin at $30 can buy $620 worth of value currently. No Dollars need to be used to exchange the Bitcoin for a $620 boat. The boat maker will have to take a % of the Bitcoin , sell it to pay for taxes. With the rest of that Bitcoin , he could pay his costs, employees, and take the rest as profit. He would then become a consumer using crypto-currencies and buy things he needs with his left-over Bitcoin or save it for a time when it is worth more in value, or convert it to a newer crypto-currency that is going to be more valuable in the future if there is a currently unidentified problem with Bitcoin .
Community pools to mint Bitcoins have been a great profit if considered on a nationwide basis. The traders and the participants of the crypto transactions are encouraged to join with the best hardware and the e-resources available in the market at affordable options. Companies like CoinMiningDirect are now supporting the supplies at affordable deals. However, they can always check out blogs like CoinMiningDirect Reddit reviews for references.
Detaching the currency the public uses from the governments currency allows the government to be more flexible with it’s own currency. The government can spend more money, or deflate without destroying the national economy, because the people of the country won’t be constantly using, hoarding, and constantly inflating the dollar. The dollar would then be used for more government transactions and they would have a lot more dollars at the current value, because the general public is using crypto-currency to make transactions and only paying the taxes in dollars.