In my last post, Bitcoin Bashing, I covered what UBS chairman Axel Weber thought on crypto being a currency and today we will delve a little deeper into the modern state money and why I believe fiat has lost, it just hasn't worked it out yet.
The functions and properties of money have long been argued over, however, there are three functions that are well-known and all agree on.
Medium of exchange:
Money avoids the inefficiencies of a barter system when used to intermediate the exchange of goods and services. The reason it works so efficiently is its ability of comparing the values of dissimilar objects.
Measure of value
It is a basis for quoting and bargaining of value. Money acts as a standard measure of trade. It is necessary for developing efficient accounting systems as a unit of account.
Store of value
Money must be able to be reliably stored and retrieved and once retrieved, usable as a medium of exchange. The value of the money must also remain stable over time.
Arguably, inflation on our current money supply reduces its function as a store of value, however that is a discussion for another time. What we are discussing today is the fourth function, the hidden or unspoken function, the function of CONTROL. The Bank Secrecy Act was implemented in 1970 and with that flick of a pen, money was changed forever. It changed into a political tool to control who can receive it, who can send it and ultimately for absolute, utter and total surveillance of all financial transactions worldwide. With this development, all other functions became subordinate to this overruling function of control. Using money as a system of control corrupts the entire foundation of money until it no longer operates as a medium of exchange. Entire countries are being cut off from the world financial system if they do not comply with the best interest of the US and no one is safe whether you are a US citizen or from another country halfway across the world. Money no longer flows freely.
Christian Juebner, an expert of asset forfeiture laws in Australia and a barrister who has worked both for prosecutors and defendants, says the scope of the laws has evolved over time.
“With civil forfeiture…without any charges ever being laid, without any conviction ever being recorded, people still lose their property because the threshold to restrain property is so low, all it requires is reasonable grounds for a suspicion that certain property has been derived from certain prescribed offending.”
But then along comes something new, something that cannot be used as a form of control, cannot be manipulated, that will not be exclusive and will provide a means for anyone to operate outside of their corrupt, over-regulated, system of control. There is a new generation of people that are getting paid in crypto (just look at steemit) and are buying the necessary things to survive, like food and shelter, with crypto. They are completely outside of the system and as more and more vendors accept crypto-currencies the more and more this will become the norm. As the Governments of the world scramble to decide on what to do with crypto, crypto silently but surely becomes stronger and stronger and what do you do with a system that refuses to be controlled? You regulate the entry and exit points, that will be the first form of regulation, but it will ultimately fail. If there is no need to enter crypto, you are paid in it, and there is no need to exit crypto, you can buy what you need to survive with it, then regulation of those exit and entry points well become irrelevant.
In a way, Bitcoin's own success is slowing its acceptance as a daily currency. People believe if they hold onto it, it will make them millionaires, so they don't want to use it to buy a sandwich today when it could buy them a Ferrari in two years and that is where stability comes in. A crypto, in whatever form it looks like, needs to be stable or it won't be used and what we are seeing with bitcoin is anything but stability. As its popularity rises, so does its value and so does the percentage of people wanting to take profit, in turn, causing volatility.
