Mr Bitcoin by Dagada Mpho;

Author:Dagada, Mpho; [Неизв.]
Language: eng
Format: epub, pdf
ISBN: 9781431427239
Publisher: Independent Publishers Group
Published: 2017-11-30T20:00:00+00:00

We are now living in an age where change is more rapid, more unpredictable than ever before.

In the 20th century, countries such as France, the UK and the US came off the gold standard. Their currencies rose or fell in value depending on circumstances. The US still has an enormous amount of gold stashed underground in Fort Knox, but the precious metal is not there to back up the US dollar. No – because we are in an era where the currencies of the world are based on trust. They are known as ‘fiat’ currencies, from a Latin expression meaning roughly: ‘Let it be’. A R20 note is actually a worthless piece of paper, but it’s accepted gladly all over South Africa, and will buy you a hot drink in any cafe. Because people believe in it, trust it, and use it as a medium of exchange and a store of value. A rand is reliable as a note, a coin, or a number in a bank’s online ledger.

But with fiat paper currencies came the danger that some cash-strapped governments would rashly print more paper money than their economies are worth. In such cases, disaster always follows. It happened in Weimar Germany after World War I and in Brazil during the 1960s. Fortunes vanished into thin air as those currencies crashed. Punch in a date in the not too distant past. And the magic TV will show me, Mpho Dagada, listening to the sad tale of a Zimbabwean who sold her house in Bulawayo and emigrated to Joburg, to get away from Mugabe’s enforcers. She tells me how the proceeds of the house sale went into a blocked bank account which she wasn’t allowed to touch. Then Robert Gabriel Mugabe needed money to pay his debts, and like Henry VIII, he inflated the Zim dollar.

Bob didn’t need to mess around with copper and silver – he simply revved up the government printing press and produced astronomic numbers of banknotes, with a face value which was well in excess of the whole country’s worth. Soon the Mugabe regime was on a hyperinflation treadmill, printing trillion dollar notes which would buy only half a dozen eggs. Fortunes were destroyed. In the end, the Zimbabwean economy went over to using the Rand and the US dollar, to stop the inflation.

Investors can no longer taste, eat, smell or fondle their currency, now in the form of fragile paper. But fiat currencies are reaching the end of their usefulness. Something that dates back to the mid-1700s is well past its sell-by date in the online age of today. The world is always evolving, and the old ways linger on as obstacles to progress. Across the centuries, this has always been the case. But Humankind has always got smart and found new solutions to keep the wheels of the economy turning. In early centuries, inventors met the challenges of a rapidly changing world with such brilliant ideas as coinage, the gold standard and paper currency. But the online world is leaving these worn-out concepts behind in the 21st century.

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