“The great trouble is that money wasn’t allowed to develop. After two or three hundred years of the use of coins, governments stopped any further developments. We were not allowed to experiment on it, so money hasn’t been improved, it has rather become worse in the course of time. Menger, and before him Hume and Mandeville, named law, language, and money as the three paradigms of spontaneously occurring institutions. Now fortunately, law and language have been allowed to develop. Money was frozen in its most primitive form. What we have had since was mostly government abuses of money.”
– F. A. Hayek
Hayek’s prophetic envisions have somewhat come to fruition through the hysteric rise in the use of digitally decentralized currency, yet the pathway towards a complete denationalisation of all currencies as Hayek initially desired remains a fantasy. All major financial institutions and businesses still operate monetary transactions through the most primitive form of money, and while it is true that a few organisations have implemented bitcoin ( and/or some other digital currency) functionality, it is realistically only done for the novelty effect.
With that said, what are the Pros and Cons of Bitcoin?
1. Protection From Payment Fraud
Bitcoins are are crypto-currency and thus cannot be counterfeited or reversed arbitrarily by the sender
2. Elimination of identity theft
This is due to the application of unique transaction ID’s
3. No intermediary fees or 3rd party entities, every transaction is voluntary and done on the basis of trust.
4. Lower fees.
1. In it’s current state there is a tremendous lack of security
2. Limited scalability and applications
3. It’s incredible volatility hinders integration and investment from businesses.
Conclusion, more time is needed to embrace the true benefits of a decentralised currency.