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The rules of the chain are arbitrary. Variables can be controlled by government officials. The state could could cut out payment processors and collect taxes on
by smokeyj 9y ago
The rules of the chain are arbitrary. Variables can be controlled by government officials. The state could could cut out payment processors and collect taxes on every transaction. This tech could also become a tool for mass surveillance and oppression which I'm sure Venezuela is much more interested in. But I think the blockchain experiment has shown we overvalue the role of currency in facilitating trade.
Here's what changed. Trade is a function of information bandwidth. Traditionally you needed a medium of exchange because you can't trade crude oil for a sandwich quickly enough to be useful. But if the merchant could accept oil certificates and convert it to an alternative certificate at checkout, any in-demand certificate could be money.
- turc1656 9y ago"But if the merchant could accept oil certificates and convert it to an alternative certificate at checkout, any in-demand certificate could be money." This is true and, in fact, used to be the case in the US with how the banking system was originally set up. In the old days each individual bank would issue certificates ("notes") as claims against their own deposits. Currently all our notes are Federal Reserve Notes which are from the central banking authority. But back then, every bank issued their own notes.
- smokeyj 9y agoWhat distressed countries like Venezuela lack is trust, making the prospect of a responsible central bank a pipe dream. I see asset backed certificates being more capable of facilitating trade than unsecured IOUs. Reduce the level of trust required to trade, trade goes up. In that aspect Petro coin will be very interesting. I'm smelling a regime change in Venezuela's near future.