What is money except an agreed medium of exchange between two parties. Bitcoin seems to answer a huge question at a critical time in history; why does currency need to be sovereign?
The internet and current computing power means that computing control is really more democratic and universal and need not have government involved with my money if the software and infrastructure is there to allow me to bypass them. This may not be of top concern in a first world country with rule of law and sound banks; however in a country undergoing the Arab Spring where the currency is devaluing with no cheap safe haven bitcoin becomes a timely answer.
In Greece where the default is being delayed as the underlying structural problems are not addressed the chance to decouple from the Euro default and convert to bitcoin would seem a very viable option. Such actions would cause an increase in inflation and interest rates in the EU and indeed globally. In turn a rush to bitcoin could ensue as the hedge against this inflation.
As I write this commentary I am one of the first 35,000 members to bitcoin. The study of internet bubbles and their expedited growth could culminate in bitcoin because it is bigger than music, larger than a social site and more important than search engines; it is the reinvention of money.
As bitcoin is designed to be inherently deflationary it allows the crisis of the debt ceiling as the tipping point to allow the replacement of sovereign currency. Money is an agreed upon medium and is premised on trust. Whether trust really exists, with fractional banking allowing for the financial mess as it exists, is a matter to be measured by the exponential flow of global currencies into the bitcoin.
This process would remove sovereign government's direct ability to tax without consent. This means as well that without economic cooperation from participation with sovereign currency the political power of the central state may be greatly diminished. It would seem difficult for the Peoples' Republic of China to have their Army commit human rights abuses in the absence of being able to pay their soldiers as their currency has devalued to worthlessness. This could have implications globally for armaments, health and education as well as free trade and rule of law.
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