Wednesday, January 3, 2018

Bitcoin, the free market in action

Love it or hate it, bitcoin represents a market out of control: Don Pittis - Business - CBC News:

January 3, 2018 - "In many ways, bitcoin is a microcosm of a pure free market. Whether you think that's a good thing or not depends on your own political values....

"[E]ven the most neo-liberal governments really don't like truly free markets..... South Korea ... plans to crack down and end anonymous trading.... The European Union and Britain have announced measures of their own to put controls on virtual currencies.... Russia has said something similar.... Beijing has banned trading outright....

"After all, bitcoin was founded on libertarian principles — the dislike of government involvement in our daily lives, the so-called 'nanny state.' The libertarian view, with a strong following in the tech community, is ... often ... in favour of things like encrypted messaging, with the goal of stopping groups like the U.S. National Security Agency from reading your email.

"In its harshest rendering, those strong free market principals [sic - gd] oppose taxation as a form of theft.... Digital currencies are a celebration of those principles. By design, bitcoin keeps your wealth strictly between you and the global blockchain....

"From a pure free market analysis, bitcoin may be the ideal currency. Rather than basing decisions on government tax laws and other rules that might seem like arbitrary red tape, a person using bitcoin could choose to consider only what's most profitable.

"According to Canadian tax law, people who earn money in bitcoin are required to report the value of that income. As bitcoins rise in value, Canadians are supposed to report those increases as capital gains.... But if those currency units are anonymous, they are hard for the Canada Revenue Agency to track, meaning ... the rest of us will have to pay more for the roads and streetlights that keep our economy functioning....

"Even in the long term, it is hard to see how governments can ever come to terms with a free market currency like bitcoin that robs them of so much power.

"But for those who believe free markets really are the solution to creating a sound and stable economy, there is a first test bitcoin and its ilk must pass to show libertarians are right. To prove their superiority over government-sponsored money, the unregulated digital currency markets must end their wild swings and bitcoin must reach a stable equilibrium price."

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