I’ve heard Max Keiser and even James Corbett (the latter of whom I deem highly reliable as a source of judiciously parsed information) advocate ‘Bitcoin’ as an ‘alternative currency’ for those who would like to opt out of the national and global fiat currency grid and into a network of commercial exchange free from the debaucheries and corruptions perpetrated on us all by the effectively ‘private’ central bank cartels that currently lord it over all of us.
There is only one problem with Keiser’s and Corbett’s well-intentioned advice: Bitcoin, as it currently exists, is not and cannot be an alternative currency.
The reason is quite simple: in order to avail themselves of Bitcoins, people have to ‘purchase’ Bitcoins with an ‘existing currency,’ and in particular, a U.S. dollar equivalent.
Consequently, because of this ‘peg,’ regardless of whether it is fixed or floating (and even though ‘Bitcoin’ in practice is actually a ‘commoditized’ medium of exchange whose ‘real market value’ is subject to the actual vagaries of demand from among buying ‘customers’ or ‘consumers’ who speculate with an eye to future values denominated in ‘dollars,’ that is to say, even though ‘Bitcoin’ is ‘in fact’ and ‘in practice’ not at all a ‘currency’ whose ‘value’ is ‘pegged’ to the ‘real’ value of another ‘currency’ in a market of ‘currencies’) – ‘Bitcoin’ is at most an ‘abstract’ commodity whose value remains rooted in, and is therefore a direct expression of, the existing network of national or global fiat currencies.
‘Bitcoin,’ in other words, is not and cannot be an ‘alternative currency’ if its ‘value’ on the open market is primarily determined by, derived from, or measured in terms of any of the currently existing ‘currencies.’ For as such, it is nothing but an extension of these very currencies, and even worse, nothing but a ‘speculative’ expression of these currencies, a Greater Fool Scheme destined to collapse at the very moment that the broader public or pool of ‘speculators in Bitcoins’ ceases to buy or convert its fiat denominations into Bitcoins.
If ‘Bitcoin’ was a ‘true’ alternative ‘currency,’ the basis of its issuance would be units of ‘goods and services,’ the principal of equivalence of which would be an approximation of the ‘labor time’ required to produce each unit of a real world ‘good’ or ‘service.’ Each ‘Bitcoin’ as a unit of currency would enter into ‘circulation’ as a unit of ‘credit’ for the purpose of requisitioning ‘materials and labor’ for the purpose of producing another ‘cycle’ or ‘set’ of ‘materials and labor’ that would be offered up for purchase to a consumer base also availed of ‘credited’ Bitcoins that had been likewise issued as ‘credit’ for the purpose of requisitioning ‘materials and labor’ for the purpose of trade, and so on. In this fashion, because the trade equivalence value of a ‘Bitcoin’ would inhere in actual units of real world ‘goods and services,’ the currency would be neither fictitious nor subject to appropriation by cartelization, since the issuance would be in the form of ‘credit’ for ‘real world production and trade.’ Furthermore, the community or trade network that would consent to using ‘Bitcoins’ as its medium of trade would have to democratically agree to the terms of ‘issuance’ and the rate of interest of that issuance, if any.
The foregoing paragraph sums up in general terms the minimum requirements for anything approaching what ‘we’ might deem as an alternative to the existing systems of currencies in the world today. The root of the problem with existing systems of ‘fiat currencies’ is that they are in effect ‘private,’ as opposed to ‘public’ (or ‘democratically controlled’), systems of currency issuance.
In my opinion, those who suggest that ‘Bitcoin,’ as it is currently ‘issued into circulation,’ is a genuine alternative to the existing pool of fiat currencies, whether knowingly or not, are both complicit in perpetuating the fraud of ‘privately issued money’ and seriously misleading an unsuspecting and gullible public.