This is the third and final article in a series about blockchain-enabled “smart contracts” and their ability to address retail fraud.
Bitcoin and Blockchain
Imagine if every time you bought a sandwich for a few dollars, the IRS forced you to treat as capital gains or losses any change in value of those dollars on the foreign exchange market since the time you earned them. That’s the way the U.S. government treats two legitimate forms of currency: gold and cryptocurrencies.
The high price of bitcoin serves as a reminder of its rigid supply, which might ultimately be its undoing.
This is the first in a series of three articles about blockchain-enabled “smart contracts” and their ability to address retail fraud.
If widespread use of Bitcoin or another cryptocurrency is truly in our future, some series of events will have to disrupt the status quo. Broadly speaking, I see two possibilities, which I’ll call the revolutionary and evolutionary approaches.
On October 3, the Committee for Monetary Research and Education held a dinner in New York City featuring four distinguished speakers on the topic of blockchain technology versus fiat currency.
What would happen if Bitcoin’s and Ethereum’s biggest competitor in the cryptocurrency space was the U.S. Federal Reserve? A new report issued by the Bank for International Settlements (BIS) considers whether central banks should issue their own cryptocurrencies.
A company is trying to bring the calming influence of gold to the Wild West frontier of cryptocurrencies
A monetary standard based on Bitcoin, a digital currency, would act something like the gold standard in making price levels more predictable and stabilizing exchange rates but would likely be undone by politicians and central bankers.
When governments try to ban the free exchange of goods and services, markets tend to make them look silly.
The rise of blockchain technology and associated cryptocurrencies is creating both exciting funding opportunities for young companies and potential regulatory battlegrounds.
Smart contracts are highly useful in many cases where contracting parties lack a strong ex post enforcement mechanism (like a court system) and need to pre-commit to not defrauding or otherwise taking advantage of each other when executing a contract.