[Cryptography] Krugman blockchain currency skepticism

[Bill Frantz]

OK, I can't resist any longer. Let's look at some payment and 
store of value systems:

Gold metal: Terrible for electronic payment. Likely to be 
accepted anywhere fiat currencies are weak. Can be converted to 
fiat currencies where they are strong, but the transaction may 
have to be reported. If you become a refugee, gold can be 
carried with you. Can be stolen at gunpoint. Resistant to 
environmental disasters like fire and disk crashes. Relatively 
stable in value over the long term. Doesn't earn interest. The 
gold standard. :-)

Dollar, Euro, Pound Sterling (well regarded fiat currencies): 
Can be used with electronic payment systems. Likely to be 
accepted anywhere. Easy to convert to other currencies, but 
transactions may have to be reported. If you become a refugee, 
notes are transportable and accounts can be accessed if not 
frozen. (Pick a good jurisdiction for that account.) Notes can 
be stolen at gunpoint, accounts can be protected from that 
attack. Notes are not resistant to fire. Relatively stable in 
value over the long term, but a bit less than gold. Accounts can 
earn interest. What world commerce runs on.

Bitcoin: Can be used for electronic payments. Not accepted 
everywhere. Can be transferred to other bitcoin users, but the 
transaction is recorded in the blockchain, leaving a record. Can 
be converted to fiat currencies for wide acceptance everywhere, 
but fiat currencies may have to be reported. If you become a 
refugee, transport is limited by the electronic devices you can 
take with you. Such devices can be stolen at gunpoint. You 
decide what your policy is on unlocking the device at gunpoint. 
Fire resistance depends on what you need to access your 
bitcoins. Wildly changing value over the recent short term and 
no long-term track record. Can't earn interest, but may increase 
in value like any commodity. Not widely used in commerce.

Eggs (from the Economist Buttonwood column 7/21/2018 on 
hyperinflation in Venezuela): Not usable for electronic payment. 
Generally accepted for payment in Venezuela. Can be sold as a 
commodity in most locations and converted to other currencies. 
Not normally tracked by governments. Hard boiling recommended 
should you become a refugee to improve transportability. 
Destroyed by fire, but small fires may help them make a good 
meal. Relatively stable value over the long term, but individual 
eggs spoil in a matter of weeks to months. Can't earn interest. 
Used in commerce in limited locations suffering hyperinflation. 
Can directly provide human nourishment.

Cheers - Bill

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