by George Hess
Within the mainstream media and economic journals, Bitcoin and other alternative currencies have become synonymous with fake money, price instability, and speculative investment. To some extent, these media outlets are correct. Bitcoin has no inherent value; it is very similar to the dollar bill and all fiat currencies in that regard. It is worth little more than the memory it occupies or the paper it is printed on. It does not have intrinsic value like gold or silver. What gives bitcoin and other currencies value is confidence, or people’s willingness to use the currency for transaction. Furthermore, Bitcoin has had a rapidly fluctuating price and is a very volatile market laden with speculation. So while the mainstream media has adequately discussed the basic qualities of Bitcoin and the recent alternative currencies market, it has failed to perceive Bitcoin’s wider implications.
Bitcoin is freedom. Bitcoin is a currency completely outside of government control. It breaks the rules. It is non-taxable, immune to inflation, and completely decentralized. What does this mean? All transactions with Bitcoin must be voluntary. It breaks down the government’s ability to quickly and forcibly levy funds. Imagine for a moment a world where bitcoin is the universally accepted form of currency. Governments can no longer tax in the same way that they could with physically currency. Because all transactions are voluntary, they must petition the people for funds. What does that mean? It means an incredibly accountable government, one that can no longer indiscriminately wage war, or redistribute wealth without the express consent of its citizens. Poor results prompt the withdrawal of funds. Morally reprehensible actions also prompt the withdrawal of funds. The government would then be accountable in the same way that businesses are accountable, and can be boycotted.