Answer by Ron Paul, Former Congressman from Texas, on Quora.
Bitcoin is a very interesting subject because for many years in Congress, I was a champion of legalizing competition in currencies.
We have a terrible monetary system today. We have a government that purposely counterfeits and debases the currencies and I believe that the alternative would be a competition. That means that anything that wants to substitute for the American dollar should be permitted. There should be no prohibitions; there should not be a monopoly and a cartel running our monetary system because it so often benefits the privileged few. We certainly saw this in the bailing out of the financial system where the wealthy bankers got bailed out it in this recent and severe recession. I am a strong believer in competition. Bitcoin is an introduction to that.
Though I don’t personally believe that Bitcoin is true money, it should be perfectly legal and there should be no restrictions on it, there should be no taxes on it. The people who operate Bitcoin would, of course, be prohibited from committing fraud but the people should be able to have competition whether it is a basket of commodities or crypto-currencies – it should be perfectly legal. For this to operate, we need to have freedom from government intervention when it comes to the Internet. I am concerned that the government ultimately wants to curtail the Internet and there have been attempts to do so.
The internet is the salvation for those of us who believe in liberty because it is an alternative way of getting around the system not only in the spreading of our ideas in this instance but in in terms of getting around the monetary system on the whole if they do permit crypto-currencies and other forms of transactions. So, this is something that we should all be concerned about whether we endorse it or not.
What we should all argue for is the use of freedom rather than having a monetary system with regulation domination that is run by a cartel and the special interests – that is the kind of system we have today. We want a system that truly challenges the government in their ability to take care of the very wealthy at the expense of the middle class and the poor.
This question originally appeared on Quora: Why does Ron Paul think Bitcoin does not fit the definition of money?.
(ht Forbes)
whole lot of crazy talk and bad economics supporting opinion.
ReplyDeleteJW: Troll.
DeletePut your money where your mouth is Jerry. What's the value of YOUR portfolio?
DeleteBetter step it up jw. You've lost your fastball and you're not offering specific counterpoints. At this point id probably ban you since you ate no more than a pestering child. Maybe change your name and troll/ r/liberal as an ancap over on reddit. it's like shooting fish in a barrel.and since you'll always be right, as an ancap v. Liberal, you won't paint yourself into a corner like you did here early on.
DeleteCouldn't agree more.
ReplyDeleteJW: not a troll, sorry
ReplyDeleteRon Paul was for a bit a hero but the deterioration of his intellect was too much for me
he, as is the case for most commentators on bitcoin, has no understanding of it - in any way - technological, economic or whatever
he believes that only gold is money because he can not see past its apparent "intrinsic" value
he, like Krugman, though at opposite ends of the spectrum, thinks bitcoin is not money because it is not as good as gold
both are wrong for the same reason
they do not really understand that ultimately all forms of money give way to more widely accepted forms and that though occasionally new contenders to what money might become come and go, often in spectacular fashion, all new forms start out on shaky ground - some less and some more
bitcoin is indeed a contender to what the future of money might become
saying it is not money by assuming a future is to be nothing less than foolish and worthlessly opinionated
it can only be that some time in the future we look back and can either say
bitcoin was a failed contender to what money eventually became
or
money started out as shells, then gold, then paper, then bits, then bitcoin
who can say?
p
Ron Paul doesn't think only gold is money. How could you make such a grievous error after reading this post?
Delete"he, like Krugman, though at opposite ends of the spectrum, thinks bitcoin is not money because it is not as good as gold"
Now you're just trying to be wrong.
see this
http://www.economicpolicyjournal.com/2013/10/is-bitcoin-money-what-economists-have.html
"he believes that only gold is money because he can not see past its apparent "intrinsic" value"
DeletePlease link to one quote from Ron Paul where he says or infers this. Stop making things up.
Funny, I use bitcoins everyday as money.
ReplyDeleteYou sure you don't mean "currency"?
DeleteI use it as money:
Deletehttps://en.wikipedia.org/wiki/Money
Although Bitcoins can currently be used as a limited medium of exchange, I'm not sure how long they will last as a store of value.
ReplyDelete"I'm not sure how long they will last as a store of value."
Delete- So far they're doing a better job at it than the dollar. Since inception the dollar has consistently lost value. Bitcoin has gained value.
Bitcoin is not money because it lacks any known sovereign, and thus is unable to provide seigniorage.
ReplyDeleteThe age of credit produced awesome investment gains for those invested in fiat money and fiat wealth such as stocks and real estate, and produce some global economic growth, via central bank investment inflationism, more specifically through the three dynamos of creditism, globalism and corporatism, which saw the Federal Reserve’s balance sheet inflate from $900bn to $4.5 TN in just six years.
The age of credit presented the opportunity to grow wealth by investing in fiat assets such as stocks, bonds, and real estate. In the age of the failure of credit, wealth can only be preserved by purchasing and taking possession of and safely storing gold bullion; those who own gold are economically sovereign and together with emerging regional fascist leaders possess seigniorage.
This week, that is the week ending April 17, 2014, Gold, $GOLD, traded lower to $1,293 on a higher US Dollar, $USD, UUP. The Gold ETF, GLD, is in a area of strong resistance, and being a currency as well as a commodity, traded lower with the commodity currencies the Australian Dollar, FXA, the Brazilian Real, BZF, as well as the Emerging Market Currencies, CEW.
The chart of the Gold ETF, GLD, shows that it entered an Elliott Wave 3 of 3 Up in January 2014. Short Side Of Long posts Gold Has Outperformed Other Asset Classes In First Quarter 2014. ETF Daily News reports Phantom Gold Inventories: has the Comex already defaulted?. It’s hard to justify an investment in Gold Miners, such as AEM, with a forward PE of 37.
Perhaps one might enjoy my article Greece And The European Small Cap Dividends Begin To Lead The Eurozone Stocks Lower On The Failure Of Credit ... http://tinyurl.com/m5ru6lj