Satoshi wrote in his white paper:
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.”
This harks back to the origin of money – which was an entirely people-based creation. During barter there was no role for government, nor later, when initial money was created by the people.
Much later, the government violently attacked and grabbed this money-making power from the people.
And so it continued for thousands of years.
Now, finally, Bitcoin’s rise is the market’s way of saying it doesn’t trust any government.
Also read: The Indian Tesla Will Have Two Wheels
Governments have been an unmitigated evil for the most part, confiscating common people’s wealth for thousands of years and splurging this hard earned wealth on the utterly useless “projects” of idiotic self-glorifying “politicians”.
Now the people are voting with their feet – and governments across the world will soon be on their knees: and then, they will, as usual, become very vicious and violent,
I suspect a major battle of wills is now brewing – and governments will be forced – after a very long battle – to retreat from their socialist projects.
I do notice that socialist “economists” like Stiglitz and crony capitalists like JP Morgan are entering this battle in a big way – as they realise that this is a historical shift in power, and their cosy lives – based on bilking the common man, will soon come to an end.
Before long, start expecting central banks to blow their tops. According to them, it is OK for them to print endless amounts of worthless paper and give it “value”, but it is not OK for markets to do so. That theory is now being challenged in a very big way.
By 2018, cryptocurrencies would have probably reached a trillion dollars in capitalisation. That will be simply intolerable for governments worldwide – but the problem is that in this case they can do next to nothing about the situation, except to unleash a lot of violence. And then the question will be: how much violence can governments unleash?
Now, note that I have already written about the need for sensible regulation of cryptocurrency, but essentially, this is a self-regulating thing, and there is no role for government.
Governments need to accept the reality that there will now be competing forms of currency that it can no longer control, and that it should focus on getting its taxes in various sensible ways, without trying to destroy this highly efficient people-to-people currency/asset.
The author, Sanjeev Sabhlok, is a retired Indian Administrative Service (IAS) officer. His work focuses on bringing essential governance reforms to India.
This article was first published on Sanjeev’s website, Sabhlok City.
Tweet at Sanjeev: @sabhlok