Bitcoin and Reserve Currencies

in cryptocurrency •  4 months ago

Currently the US dollar is the most dominant currency in the world. That may be changing soon. With China introducing the oil-backed Yuan and the rise of crypto currency the market is shifting [1]. The situation in Venezuela is quite interesting to follow as they are trying to use gold and oil backed crypto currency in order to stabilize their economy. Immediately after the introduction of this currency, America immediately forbid US based purchases of Venezuelan Cryptocurrency [2]. In my opinion, this signals that Venezuela did something right.

I propose either Bitcoin or something very similar to Bitcoin be used as the global reserve currency for two reasons:

  1. Having the currency based on complex math makes sure it cannot be cheated. Feel free to argue this point, but I stand by it. Anything based on finite resources such as gold or oil is better than what we have today, but gives an unfair advantage to those who have more of these resources than others.

  2. Blockchain based currency provides an audit trail. Commerce between countries SHOULD be public and trackable. This includes so called illicit trade. If the countries economy is partially based on this trade, why not make it publicly trackable? Feel free to argue this point, but I stand by it as well. If there is public outcry from a certain trade, at least it is public and can be argued in the public arena.

[1] https://www.marketwatch.com/story/are-we-entering-the-age-of-the-petro-yuan-2017-11-17

[2] https://www.bloomberg.com/news/articles/2018-03-19/trump-prohibits-u-s-purchases-of-venezuelan-cryptocurrency

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