Friday, April 19, 2013

Julian Assange on Bitcoins and Gold

Julian Assange seems to have a pretty sophisticated understanding of money, gold and bitcoins.

Alex Mullins emails:
I was reading a transcript of a talk between Julian Assange and Eric Schmidt of Google where Mr. Assange was talking about the merits of gold as currency.

Here is the link to the transcript:

The relevant portion is about 1/4 the way down the page starting with Assange talking about Bitcoin and Gold:

"And very important, actually. It has a few problems. But its innovations exceed its problems. Now there has been innovations along these lines in many different paths of digital currencies, anonymous, untraceable etc. People have been experimenting with over the past 20 years. The Bitcoin actually has the balance and incentives right, and that is why it is starting to take off. The different combination of these things. No central nodes. It is all point to point. One does not need to trust any central mint. If we look at traditional currencies such as gold, we can see that they have sort of interesting properties that make them valuable as a medium of exchange. Gold is divisible, it is easy to chop up, actually out of all metals it is the easiest to chop up into fine segments. You can test relatively easily whether it is true or whether it is fake. You can take chopped up segments and you can put them back together by melting the gold. So that is what makes it a good medium of exchange and it is also a good medium of value store, because you can take it and put it in the ground and it is not going to decay like apples or steaks. The problems with traditional digital currencies on the internet is that you have to trust the mint not to print too much of it."


Note: It would be pretty tough to get away with printing extra bitcoins, given its structure, the bigger problem is paper money and guys like Ben Bernanke.

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