Exchanging banks worldwide set the rates by trading
You cannot compare Bitcoin to the Internet because the Internet has no financial aspect, whereas BTC is paired with fiats. Bitcoin behaves more like gold. And the world cannot go backward. Read this carefully http://mentalfloss.com/article/12715/why-did-us-abandon-gold-standard
WHY DID THE U.S. ABANDON THE GOLD STANDARD?
To help combat the Great Depression. Faced with mounting unemployment and spiraling deflation in the early 1930s, the U.S. government found it could do little to stimulate the economy. To deter people from cashing in deposits and depleting the gold supply, the U.S. and other governments had to keep interest rates high, but that made it too expensive for people and businesses to borrow. So in 1933, President Franklin D. Roosevelt cut the dollar’s ties with gold, allowing the government to pump money into the economy and lower interest rates. “Most economists now agree 90 percent of the reason why the U.S. got out of the Great Depression was the break with gold,” said Liaquat Ahamed, author of the book Lords of Finance. The U.S. continued to allow foreign governments to exchange dollars for gold until 1971, when President Richard Nixon abruptly ended the practice to stop dollar-flush foreigners from sapping U.S. gold reserves.
You cannot compare Bitcoin to the Internet because the Internet has no financial aspect
I completely disagree. Both bitcoin and the internet are protocols. They both were considered as ‘fads’ in their earlier years. Like the internet, bitcoin has massive amounts of venture capital being invested into building up businesses and ecosystems that use bitcoin. Bitcoin had a HUGE crash just like the dotcom bubble.
Holy cow that looks familiar!
The Great Depression is not a good argument against the gold standard because there has only ever been a single great depression. Additionally there is no solid consensus on the cause either. I acknowledged that the gold standard might have been a cause, but I need more proof. The Austrian school of economics makes FAR more sense to me. But when 99% of the world believes inflation is good (i refuse to believe that) it’s hard to find unbiased opinions…
We had a team of researchers send us their concept of an “iGDP” pegged currency. The paper is available here if you’re interested: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2542541
We define iGDP, the gross domestic product (GDP) aggregated via a valuation of all finished goods and services produced within a country using a universal numeraire we refer to as iCurrency. We propose 4 criteria for iCurrency:
- it is not a currency issued (or backed) by any government;
- it is valued based solely on supply and demand;
- it is easily transferred across regions and globally accepted as a payment method;
- it is algorithmic, with no human intervention. Using the iCurrency concept as a universal numeraire makes iGDP less prone to: 1) erratic FX rate fluctuations; 2) possible government manipulation; and 3) comparative advantage intervention policies.
We further ponder the benefits of employing iCurrency as a universal world currency, which could enable more precise estimations of global inflation, global output, global productivity, global labor gains, and other global
macroeconomic indicators, and improve overall measurements of our global economy.
Wow, now that sounds appealing and interesting. For Nu too.
A currency without human intervention is possible if human behavior is deterministic and gets mechanical, e.g. upon AI augmentation and control, but this is not in the plans of the majority.
Could you buy the Internet? No. You buy Internet-based companies. These companies’ stocks can fluctuate in value. They’re not currencies.
Yes. And bitcoin is even not a company (dao) nor a protocol. It s an economic-technical hybrid protocol at best. It s rather a flawed economic system.
If people could instantly send Google stock to any other person in the world instantly and for a penny, yes it would be used as a currency.
Not if the Google stock drops 20% or gain 20% the next day after you sent. Also, if you’re a merchant, you have to adjust your merchandise’s prices daily or even hourly - not efficient at all.