Professor of the University of South Carolina and Bank of Canada consultant Warren Weber presented a 37-page report on bitcoin ( read about what is bitcoin ), in which a hypothetical version of the transition of the world economy was calculated to the fact that bitcoin has become the world’s main currency.
Professor Webber believes that by adopting bitcoin as the main currency, the financial system will become more stable, but national central banks and governments, however, will lose valuable tools for influencing the economy. Therefore, they will actively discourage the implementation of the bitcoin standard.
Warren Webber in his study makes a thorough comparison bitcoin with the gold standard. There are two main similarities: lack of control by the authorities and a limited amount of gold and bitcoins.
Recall that the algorithm limits the number of bitcoins to 21 million digital coins. If bitcoin becomes the world reserve currency, then the currency will lose a significant share of its self-worth as money. Thus, bitcoin is able to return to the world economy to the gold standard that existed in the world financial system before the 1970s.
The creation of paper money will remain one of the last opportunities of central banks to somehow influence monetary policy, but if bitcoin becomes a standard of money, this opportunity will gradually come to naught.
Webber believes that bitcoin can be especially useful for the economy in two ways. The speed of appearance of new bitcoin can be considered constant, and the forecast of prices for goods and services will be incredibly easy. Another advantage is that bitcoin does not require special investment in it at the state level to protect against fluctuations in the exchange rate.
If bitcoin becomes the new “gold standard”
, these significant resources can be used more efficiently.
However, Professor Webber logically came to a sad conclusion: the bitcoins standard is unlikely to be implemented, as central banks and governments will struggle to withstand this process. With the introduction of the bitcoin standard, their ability to influence the economy will be greatly reduced, just as the issue income (income from the pre-printing of new banknotes) will go away.
The loss of these opportunities is too painful and critical for the state, and, accordingly, to take bitcoin transactions as a reserve world currency, maximum obstacles and barriers will always be created.
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