Saturday, May 4, 2013

Mon(k)ey Business

I have been following the whole "economic" situation for a long time, as should anyone who cares about their future: Bitcoin is the most recent development. You can read more about it here from WIRED. A very good article and carefully thought out.
What I don't see written anywhere is what seems to me to be an obvious problem with Bitcoin or any other virtual currency that is "secured" by an encrypted number: computing power is always increasing, so if your money is kept secure by an encryption, eventually those with enough Megaflop muscle will be able to hack it, and fake it. 
On the other hand, if that distant event  can be kept as far into the future as possible,  we can probably expect  some sort of VC (virtual currency) to take over from the present mess simply because there are so many parasites and gamblers sucking value out of the world's currencies that it will be necessary just so people can survive.
None of that will solve the basic problem though: the problem of humans wanting to gamble - or worse still, wanting to get money for nothing. Even providing employment for everyone won't fix that, no, what is needed is a trade system that cannot be speculated upon. The alternative is to provide a speculation system that is disconnected somehow from the real economy (consumery) so that the loonies can gamble all they like without wrecking nations or currencies.
Well, that's a nice idea. Not sure how you would do that.
If you think I'm cynical about economics, you should see what Max Keiser has to say.
Search "Keiser report" on Youtube. 

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