Independance debate in Scotland and UK

[practicaldreamer]

Just a thought - but having listened to the Governor of the Bank of England yesterday, one of the things he mentioned (if I heard him correctly) was that transaction fees (between currencies) are roughly 0.5% of GDP      UK GDP = 2.5 trillion USD
   SNP has stated it wishes to retain GBP in the event of a Yes vote for independance - and as 75% of its exports go to the Rest of the UK presumably the cost of transaction fees had an influence on this.

    I just wondered what the opinion of people on here was regarding Scotlands currency options.

Just for the sake of arguement - and for interest - what would the economy of a country using BTC as its currency look like  a) today   and   b)15 years from now ?

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[whitenight639]

Without an independent currency away from central bankers Scotland or any other country will not be independant.

If Scotland used BTC or any other crypto-currency I imagine it would be like the USA before 1913, with no federal income tax, no central banks devaluing the currency and less government trying to regulate everything and take peoples money by threat of force (taxation).

I may be wrong but other than a little Natural gas I don't think Scotland has many natural resources, So they would have to develop themselves as a place of inovation or a be a manufacturing or financial center to prosper.

[retrend]

It's a shame the independence referendum has came along just a few years before a crypto currency could have possibly offered a viable option for a state.  I had envisaged a government backed crypto as being a possible option for a replacement with the pound.  The £ could still be used for cash.

Thankfully all discussions on this topic are essentially a moot point, as the polls have remained steady at 40% wanting independence and 60% against since forever.

[minor-transgression]

Just to be clear from the outset, the problems with transaction fees
will be several orders of magnitude smaller than the challenges that
two Scottish banks, particularly the RBS will bring.

As a suggestion, Scotland should have its own cryptocurrency.
That, plus bitcoin, the Euro and GBP should be legal tender, and
used as reserve currency.

The reasons for having a separate cryptocurrency are:
a) if you don't you could end up like Greece, unable to adjust your
exchange rate, or adjust monetary policy to deal with stresses
in the economy.
b) you can default. I'd suggest building default into the cryptocurrency
some 50 years in the future. More on that later.

As for the question of transaction fees, it costs Euro 380,000 to
process a block at present, and costs are likely to increase in the
future if bitcoin keeps rising in price. Hence if 1000 transactions are
processed, each heavily subsidised transaction would cost Euro 380
in electricity, which someone has to pay for. So, it makes sense to
keep a local cryptocurrency.

You might also want to adjust expectations for things like Intellectual
Property, and other monopolies, by limiting the extent of external
ownership at some time in the future - say in 50 years time.

You asked what a bitcoin economy might look like. Probably a lot like
one based on gold or silver, with similar problems. There's a thread
on Learning form Imperial Rome if you want to delve deeper. 


 

[nwbitcoin]

As someone who moved to Scotland recently, the whole debate has been very interesting to me - but mostly because so many things I thought about Scotland have been proved to be nonsense.

Edinburgh is the second largest financial centre in the UK. The country makes far more money from its financial centre than it does from oil, but this fact is not widely known. It also is the second largest growing city in the UK creating the most new jobs outside London - mostly in IT, Business services and the energy industry.

The idea of a currency union with the UK is a political idea and is possibly being heavily debated to make it seem like a compromise when they finally decide that they will go for their own currency, a Scottish pound, with parity but no union with the UK pound.  This is the deal the UK has with its other dependencies such as the Isle of Man.  Again, this is not widely known, but the details are here - http://en.wikipedia.org/wiki/Manx_pound

While it would be a nice idea to see Scotland take on Bitcoin - or preferably Nxtcoin due to its green credentials - the GDP of £250Bn is far more than Bitcoin could handle!

Besides, its difficult enough to create a new currency and add it to a working economy - doing it with a crypto currency that hasn't been tested at that scale would be political suicide! ;-)

However, if we were talking about it happening in 20 years time, with plenty of practical experience of crypto, then I would guess the main advantage would be quick and easy international trade - and that would do wonders for that GDP! ;-)

[selavy59]

I think it would be a great idea for Scotland to print its own currency along the lines of the Greenback or the Bradbury Pound. But somehow, I think the banking cartel have got their boots firmly on Alex Salmond's testicles.

Bitcoin is a non starter. It just does not have enough maturity to be considered a true currency - yet.

[davidpbrown]

A currency will reflect the people using it. A nation's currency of choice perhaps should reflect the state of that nation rather than wider interests, otherwise the normal negative feedback that encourages change might be stifled. Avoiding negative feedback, is in large part what's given us an economic crisis and not just a financial one.

Bitcoin will provide a useful option for individuals but I suspect will also necessarily be paralleled by national currencies of choice, in order there is flexibility to adapt to local economic reality.

I wish Scotland well and would be interested to see independence for them, if only that it'll give UK politics a shot in the arm.
However I can't help wonder that they are only a small population ~5 million and it asking a lot then of the fraction of those working ~2.5 million that they provide a high quality of living all round. If they can leverage natural resources, hold on to natural gas and any oil, then perhaps it's sustainable; if they are just a fraction of the mess the UK economy is now, perhaps they will still fair well relative to the rest of the UK but they do have the same albatross of debt to contend with.

Given the value of BTC will rise with wider adoption, putting some money to that now would help as an intermediate support. Not going to happen just yet though, as risk management heavily weighs down the thinking of companies, let alone countries.

[Brangdon]

If Scotland used BTC or any other crypto-currency I imagine it would be like the USA before 1913, with no federal income tax, no central banks devaluing the currency and less government trying to regulate everything and take peoples money by threat of force (taxation).

I don't see why. They could still pass laws requiring companies to declare their income and pay tax on it. They could require records kept, and audit the books. The companies would also be required to declare how much they paid their employees and that would be taxed too. This would still be enforced by threat of force.

The main difference is that the monetary policy would be fixed. They couldn't print more bitcoin as a sneaky way to default on government debt. That would probably be a mixed blessing.

They would need to find something to use for notes and coins.