Is Bitcoin on the way to changing the global economy?

in #sct5 years ago

So how is all this going to look?
Is Bitcoin on the way to changing the global economy?

In a working paper written by two leading researchers at the National Center for Economic Research in the United States, they try to answer the question. The researchers, Prof. Michael Bordo of Rutgers University and Professor Andrew Levine of Dartmouth University, are trying to think of the models that best satisfy the three basic requirements we have of our money: to facilitate easy trading between people that will maintain its value over time and be stable enough to To quote prices according to their value.

Bordeaux and Levin offer a system of accounts to individuals in the central bank, among whom individuals can transfer the virtual currency. Unlike digital coins such as the Bitcoin, where the coin does not "lie" in any account but carries a code describing its ownership. People will be able to transfer money between them at the touch of a button and simple identity authentication, such as a password or fingerprint. According to the researchers, the use of completely digital currencies, together with central management of accounts, could almost zero the cost of trading, with an emphasis on international trade, with an operating cost that would be significantly lower than the costs of working with cash and current accounts. It should be noted that the use of cash is more common among the weaker strata, such as the poor and small business owners, and today they bear disproportionately the cost of commissions on the use of cash.

Bordeaux and Levin also believe that beyond digital currencies can make monetary policy of countries more effective. Today, central banks seeking to stimulate the economy are lowering interest rates to encourage spending and investment, but the banks are "limited from below" at an interest rate that they can set: for a negative interest rate, people simply prefer to withdraw the money and put it under the ballet. Digital currency will enable the country to lower the interest rate to below zero, and implement a much more flexible monetary policy. The ability to lower the interest rate to any level also casts doubt on the need for constant inflation, a tool central banks like to preserve in order to allow them to play with them in times of boom and bust. If that is the case, and if the digital currency also bears fixed interest not in times of crisis (Bordeaux and Levin offer risk-free interest, such as interest on government bonds), the digital currency can become the most effective tool for preserving value in human history.

What will happen to the black economy?
Along with the great hopes, we must ask: Will we ever want the government to have such power? Today, cash is the refuge of people who seek to maintain anonymity (or tax, of course). Bordeaux and Levin do not have a shred of privacy: the government will know at any given time where you made your last purchase, whether you drank too much and when you went to couples. Even the ability of the central bank, which is currently limited by logistical constraints, to hit our purchasing power almost indefinitely, is alarming to say the least.

And there are those who do not see an extraordinary revolution. "It's just a continuation of the existing system, there's nothing new here," says a monetary consultant at a large commercial bank. "They will have a little easier playing with the interest rate, but it really does not mean they will use it. Central bank governors also know where they live, and know exactly what destructive effect a negative interest rate can have on many in the population. When the finance minister calls the governor angrily and says that his office has hungry pensioners, she too will fold. Besides, if the government does not keep the money stable, what will happen in Israel and happens all over the world will find another 'money'. Yesterday it was chips (to the phone, which kept their value in hyper hyperinflation), tomorrow it will be a gift card for Amazon or anything else. "

For this reason, he believes that digitizing the currency will not lead to a significant increase in tax collection, as many politicians hope. "It may be that some independent taxpayers will now work with receipts, but most of the black economy is illegal anyway, and if you take these people cash they will find new 'money' to work with. The criminals are too smart and their businesses are too profitable to give up. "

"A large and active community"
Daniel Shkolnik, a lecturer and activist in the Israeli Bitcoin community, is not particularly worried about the future of the shekel. "In the end it does not matter, more and more people have unlimited access to the crypto-like models of Bitcoin." According to him, the Bitcoin community in Israel has grown all the time. "There is already a large and active community, the events are always full, and every day another 100-200 people want to join our Facebook group, Bitcoin Israel. We are people of all ages, from soldiers to pensioners, from all backgrounds and from all strata of the population. At the moment there are more men than women, but recently the number of women is rising. "

Although most members of the community came mainly because they sought alternative investments, but over time the ideology and advantages of independence from the state's capriciousness begin to seep: "The founding generation is relatively ideological. Most of the newcomers are looking to make a profit, but once they understand the idea behind Bitcoin, what gives it value and the independence it gives to a person, many of them also adopt a liberal ideology. "

Daniel does not think the state really can compete with the benefits of Bitcoin. "First and foremost, I get full control over my money. In addition, I am also immune to currency manipulation, in a world where the Indian government can decide from day to day that 86 percent of its cash is worthless, and the Chinese government can reduce its purchasing power at least eight times in two years after it has promised citizens the exact opposite. Independence is a piece of property. "

"The blockcane will be much less efficient in a decentralized system, and every state currency will have advanced user identification technologies, just the privacy violation that people have run away from us," he said. I'm sure the state will make a lot more changes, but those who are already strong in the business of the Crypto coins simply have nothing to return for. "

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