Bitcoin for Dummies

The last addition to our archives was Denationalisation of Money by Murray Rothbard. This blog post is about how that denationalisation might be closer to happen than you think. The reason is Bitcoin. Cryptocurrency that no central bank can control.

http://www.technologyreview.com/news/424091/what-bitcoin-is-and-why-it-matters/

What do you think about Bitcoins? My two cents are that in addition to its many other great libertarian potentials everyone should consider it as tool to store value, because right now politicians are printing more of  your friendly neighbourhood fiat-money in order to tax your savings away. 

Denationalisation of Money: The Argument Refined - Friedrich A. Hayek

http://library.mises.org/books/Friedrich%20A%20Hayek/Denationalisation%20of%20Money%20The%20Argument%20Refined.pdf

What if the government let anyone use a currency of his or her choosing? What if the government permitted entrepreneurs to innovate in the monetary sector, such as by creating digital currencies or minting commodity money?

This is precisely what F.A. Hayek argues.

By special arrangement with the Institute for Economic Affairs, the Mises Institute is pleased to offer a new printing of F.A. Hayek's most radical case for the complete privatization of money: The Denationalisation of Money. He wrote this near the end of his career, after thinking through all the economic arguments for monetary reform and examining the political viability of various proposals. He shows the essential unviability of government money, and calls for a complete free market in the production and distribution and management of money.

This book is the very core of the Hayekian approach to monetary policy, and the book that drew the world's attention to this radical thinker following his Nobel Prize in economics. The argument is substantively similar to Mises's but rather than a gold standard, Hayek argues for completely abandoning government attempts to reform money. The result would be competitive private currencies that permits the market alone to choose the dominant currency the world over.

In the digital age, his argument takes on new significance, as experimentation in digital currencies continues apace.

What Has Government Done to Our Money? - Murray Rothbard

This is truly a book that every politician should have read. And unfortunately, most of them haven't.

Download the book

The book made huge theoretical advances. He was the first to prove that the government, and only the government, can destroy money on a mass scale, and he showed exactly how they go about this dirty deed. But just as importantly, it is beautifully written. He tells a thrilling story because he loves the subject so much.

The passion that Murray feels for the topic comes through in the prose and transfers to the reader. Readers become excited about the subject, and tell others. Students tell professors. Some, like the great Ron Paul of Texas, have even run for political office after having read it.

Rothbard shows precisely how banks create money out of thin air and how the central bank, backed by government power, allows them to get away with it. He shows how exchange rates and interest rates would work in a true free market. When it comes to describing the end of the gold standard, he is not content to describe the big trends. He names names and ferrets out all the interest groups involved.

Since Rothbard's death, scholars have worked to assess his legacy, and many of them agree that this little book is one of his most important. Though it has sometimes been inauspiciously packaged and is surprisingly short, its argument took huge strides toward explaining that it is impossible to understand public affairs in our time without understanding money and its destruction.