April 30, 2013

The rise and fall of bit coins and why it might leave a lasting legacy

            Friedrich A. Hayek believed that the world was emergent that through spontaneous order, things come to be and that the free market would weed out inefficiencies.  I recently read an article on bit coins on economist.com entitled “Mining digital gold.” The article referred to bit coins as a new craze where libertarians or fanatics are looking for an alternative to government fiat money. I tend to look at it through a different pair of lens than the author; I look at it as the market in search of a more stable and effective means of exchange. Recently we have seen the value of bit coins dramatically increase in price because of all troubles Europe and people are afraid that maybe the currency back by their local government’s may not be worth as much in the near future. Now the chance of bit coins becoming very successful is almost slim to none, this does not means that is hasn’t opened the door to a Pandora’s box of alternative means of exchange. If history has thought us anything is that entrepreneurs will come along and try to compete with different versions or forms of currencies and through the discovery process one or a few will even though take hold. For in the end not even the force of governments cannot extinguish the free market, the most they can do is just merely slow down the process.

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