Tom Worthington wrote: > An Australian dollar is not much different to a Bitcoin: it is only worth whatever someone will exchange it for.
No. This might be kind of true for the individual at a particular moment but it is not true from a system perspective, or over time. Australian dollars are required to pay tax in Australia which gives it a pretty solid baseline value as long as there is taxed economic activity in Australia. Furthermore, the supply of the currency is managed to stabilise it's value. You can't pay your tax in Bitcoin. You can exchange your Bitcoin for as many Australian dollars as you happen to be able to get at the time and pay your tax with that. This is pretty much like selling your shares in Blue Sky Prospecting NL to pay your tax. Furthermore, there is a big and potentially enormous economic effort devoted to maintaining the Australian dollar at the value it had last year (less a small but managed inflation component.) The value of Bitcoins is essentially in the hands of speculators. > Apparently there is a Bitcoin ATM somewhere in the Canberra Center. I went looking for it, but could not find it. Virtualised? >Governments are not the only ones issuing currency. Private banks issue their own banknotes in Scotland and Northern Ireland Banknotes were originally issued by private banks as a kind of commodified letter-of-credit. This function was taken over governments for different historical reasons over time but underlying rationale was to have the stability of the financial system transcend the health of individual institutions. The local currencies of Scotland and Northern Ireland are anachronisms that exist for political reasons like a lot of stuff in the UK (and elsewhere come to think of it.) These currencies are a bit weird but they are essentially under the UK central bank control, have fixed one-for-one exchange rates, and would be guaranteed by the UK government if say a financial disaster struck the Royal Bank of Scotland, so are pretty much only nominally separate currencies. Even the Scottish separatists support an ongoing currency union with England. The value of Bitcoin could half or double next week and no government would take any action. They might give you a told-you-so leer but that's about it. This is not true of any GX currency. Or a Scottish pound. Jim _______________________________________________ Link mailing list [email protected] http://mailman.anu.edu.au/mailman/listinfo/link
