“Can a bunch of computers that are set up by a bunch of smart people do a better job [than central banks] of managing the vagaries of the world’s money supply?”
That’s the question former US Senator Judd Gregg (R-NH) grappled with in an op-ed published this week by The Hill.
Conventional wisdom says no, Gregg wrote, as it would “defy the logic of time and history” for Bitcoinor another cryptocurrency to challenge national currencies — and the central banks that manage them — for dominance in the marketplace.
Indeed, economists have even referred to the lack of a central bank to manage the money supply as Bitcoin’s “fatal flaw.”
However, Gregg, who served as chairman and ranking member of Senate Budget Committee, suggested that in this case, the “old-school view” may not be correct.
“If people accept that Bitcoin or any of its descendants have value — and if that acceptance becomes the bedrock faith underpinning the marketplace — then it will herald a new era,” he wrote. “The implications of the legitimization of Bitcoin as a currency are truly staggering.”
Central banks, he said, would be “neutered,” as they would be unable to directly manage inflation in domestic economies.
Federal governments, meanwhile, would have a much more difficult selling their debt, making it less practical to run up large deficits.
What has been called “hyperbitcoinization” would happen first in countries with weak economies and a poor history of currency management, while strong currencies like the US dollar would likely “stand as a core element of world commerce” for at least as long as the government operates in a “marginally responsible” fiscal manner.
“But it is also possible to foresee, not too far over the horizon, a world economic structure where currencies like the dollar, the euro and the yen will be challenged by crypto-currencies that obtain generally accepted status,” Gregg adds, noting that it would lead to a “very disruptive” — potentially “traumatic” — phase of monetary history.
This may be true, but as Gregg wrote, the world’s major currencies are almost certain to retain their predominance as long as central banks and national governments behave with at least a modicum of responsibility.
When they cease to behave responsibly is when hyperbitcoinization has the best chance of coming to fruition. This will likely prove to be traumatic and disruptive. However, if federal governments and central banks have left the world economy in such a poor state that their citizens turn flee to Bitcoin or other cryptocurrencies en masse, one imagines that Bitcoin will not be the harbinger of trauma but rather the response to it.
This is why author and scholar Nassim Nicholas Taleb has said that while Bitcoin may or may not be more convenient to use than other payment systems, it is an “insurance policy” against government mismanagement.
Bitcoin’s “mere existence is an insurance policy that will remind governments that the last object establishment could control, namely, the currency, is no longer their monopoly,” Taleb concluded in a recent blog post. “This gives us, the crowd, an insurance policy against an Orwellian future.”
More Bitcoin ATMs are being introduced by LibertyX as interest grows
- The company behind first launching Bitcoin ATMs in the United States, LibertyX to introduce more.
- LibertyX have announced they will add another 90 ATMs to its network.
LibertyX, the firm that launched the first Bitcoin (BTC) automated teller machine (ATM), in the United States, will be adding 90 new machines to its network.
The Boston-based firm will be partnering with independent ATM operator DesertATM, as part of the network expansion, as detailed within a report by global ATM market publication ATMmarketplace on July 18.
DesertATM will be uploading LibertyX on 90 of its Genmega ATMs to facilitate Bitcoin operations. In terms of the new Bitcoin ATM locations, these will be placed at; gas stations such as AMPM, ARCO & Chevron, as well as Family Dollar retail stores, as per the press release notes.
Bitcoin not yet banned in India, regulations around the corner
- The Minister of State to the Ministry of Finance told the upper house of the Indian Parliament, cryptos are not banned yet.
- The Minister, Anurag Singh Thakur, also stressed the need of creating a solution that caters to global regulators.
As per Anurag Singh Thakur, the Minister of State to the Ministry of Finance, holding or trading cryptocurrencies is not banned in India. During an address to the upper house of the Indian Parliament, Thakur stated that the Reserve Bank of India and the Ministry of Finance have issued notices regarding the use of Bitcoin and other similar coins:
“Presently, there is no separate law for dealing with issues relating to cryptocurrencies. Hence, all concerned Departments and law enforcement agencies, such as RBI, Enforcement Directorate and Income Tax authorities, etc. take action as per the relevant existing laws.”
The Minister’s response followed a recent report regarding an alleged crypto blanket ban draft which stated that the government would sentence crypto traders with a ten-year imprisonment.
In a separate letter addressed to the Ministry of Corporate Affairs, Thakur stated that an interministerial committee needs to create a solution that caters to global regulators:
“It is difficult to state a specific timeline to come up with clear recommendations. The Inter-Ministerial Committee (IMC) under the Chairmanship of Secretary, Department of Economic Affairs is examining all issues, including the pros and cons of the introduction of an official digital currency in India. No decision on licensing and authorizing any entity or company to operate such schemes or deal with Bitcoins or any virtual currency has been made as yet.”
Bitcoin price prediction: BTC/USD faces two healthy resistance levels on path back to $11,000
- BTC/USD is currently trading around $10,545.
- The two resistance levels are at $10,575 and $10,700.
BTC/USD had a bearish Friday where the price fell from $10,660 to $10,540. Bitcoin managed to have a bullish start to this Saturday and is currently trading for $10,545. The daily confluence detector shows two moderate-strong resistance levels at $10,575 and $10,700. On the downside, there are two support levels of note at $10,500 and $10,375.
BTC/USD daily confluence detector
The $10,575 resistance level has the 1-week Fibonacci 61.8% retracement level, while the $10,700 has the most substantial resistance level but no confluences has been detected. On the downside, the $10,500 support level has the 100-day simple moving average (SMA 100) and the 1-hour previous low. The $10,375 level possesses the 1-day Fibonacci 38.2% retracement level.