Crypto and Digital Currencies - a Matter of Trust?

Posted on: 07/09/2019

Crypto Currencies - Bitcoin being the most famous one - have been around for years.

For all the publicity about all things crypto , there are almost certainly less than 30 million users on the planet, which is less than 0.5% of the worlds population.

Those who support Crypto Currencies speak to the fact they are decentralised and are therefore not subject to the control of governments or the central banks which do their bidding.

Those who are against Crypto Currencies regard them as primarily a vehicle for speculation, rather than a method of payment. They also worry about the ability of criminals to use Crypto Currencies to launder the proceeds of their nefarious activities.

For a long time, Crypto Currencies had the stage to themselves, as the poster-child of radical payment modernisers.

Now, however, we are being told that there is a better alternative - Digital Currencies.

Enter Facebook. They are in the process of launching, with commercial partners, their own Digital Currency - Libra.

Libra will, we are told, be better than Crypto Currencies because it will be be underpinned by balances of Fiat Currency - cash, the good old £ (or $). Crypto Currencies are, on the other hand, supported only by the confidence of prospective buyers.

In contemplating the underpinning of Libra by Fiat Currency, it is perhaps as well to recall that Fiat Currencies were themselves once underpinned by precious metals. However, that underpinning was eventually temporarily removed, never to return.

How long would it be before the the commercial organisations sponsoring Libra quietly phased out the Fiat Currency underpinning - forever? 

Why bother about all of this, you might well ask?

The truth is that for most of the worlds population - for example, the 99% who don't own Bitcoin - there would be no reason to worry were it not for the fact that the most active promoters of both Crypto and Digital Currencies want them to replace Fiat Currency entirely.

In other words, they crave "cashless societies", in every corner of our planet.

For my part, I like the substance of hard cash, solidly in my possession. I have no desire to hold what wealth I have in a crypto wallet or in a digital account at Facebook.

In the end, the cash in my pocket, while not giving me perfect control - Fiat Currency can devalue, for a number of reasons - allows me

* close management of my spending

* to decide how I pay, giving me Payment Choice

* the ability to buy without the authorisation of a third party

* privacy, without monitoring by either government or commercial organisation

* freedom from the power of anyone to simply switch off my access to funds

You may have total faith in all things crypto and digital. You may have no concerns about the extra power such payment innovations give those who may want to control you. You may trust both governments and commercial organisations to always respect your individual interests and rights. 

You may - BUT I NEVER WILL. 



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