If You Have an Electronic Currency - You Have No Need For a Central Bank

Hello ATS,

Here is a thought, how would you sell people on all electronic money? I mean people like cash, so how do you find a way to make them accept the end of cash, of paper currency? My thought is that you have to offer people a cookie, a clear benefit that they want. For the past few years we have all been bombarded with talk about how the bankers and central banks are the cause of all of our problems. If you have an all electronic currency then central banks become meaningless except for their regulating of other banks. Wait a second, if currency is all electronic, do you even need banks at all?

The elimination of privately owned central banks, like the Federal Reserve, would mean that much of the nations debt would simply disappear. Ron Paul suggested nationalizing the Federal Reserve and discussed how that would make trillions of dollars that we owe to ourselves go away. Who would then control the electronic money, what about the US Treasury and eventually the United Nations. With an all electronic currency you would need international cooperation or you could not pay each other. The end result is that all currencies would need to be based on the same thing, be it gold, silver, mineral wealth, labor force, infrastructure, whatever. Just some thoughts, peace.

An electronic currency would still be a fiat currency and not money. Unlimited amounts could be and would be created. Throughout human history the only way to limit uncontrolled currency creation is to have it be commodity based. Please go to mises.org for a beginer's class in economics. Money should be a store of wealth. The US dollar has lost over 80% of its value just since 1971. All paper currencies have failed as will all electronic ones.

Look no further --> bitcoin.org...
en.wikipedia.org...

If not heard of before;
I really like the idea of bitcoin, in that it is completely decentralized (as you mentioned no need for a central bank). The great thing about bitcoin is that only so many "coins" can be generated, once all the algorithm's have been solved by people's idle computer time (called bitcoin mining) no more can be introduced to the currency. The upside of this, is that you can't simply "print" electronic currency in the same way that banks or criminals might do.

Bitcoin meets the criteria for everything you mentioned in your post.

I don't ever believe bitcoin will be a replacement for world currencies, although it is a very nice concept for the subject. I'd have to say electronic currency could in fact be the future one day.

reply to post by Monteriano


Dear Monteriano,

Actually, I met with an expert in international banking and she told me that this is exactly what they are looking at. The question that is being worked out is what the currencies will be pegged to and I will bet you that it will not be gold alone. The next question is which organization will be responsible for determining how much of whatever a nation has and sets their currency rating.

reply to post by InsideYourMind


Dear InsideYourMind,

Bitcoin was on my mind when I posted this, I see it sort of as a trial balloon. Peace.

Originally posted by AQuestion
Hello ATS,

Here is a thought, how would you sell people on all electronic money? I mean people like cash, so how do you find a way to make them accept the end of cash, of paper currency? My thought is that you have to offer people a cookie, a clear benefit that they want. For the past few years we have all been bombarded with talk about how the bankers and central banks are the cause of all of our problems. If you have an all electronic currency then central banks become meaningless except for their regulating of other banks. Wait a second, if currency is all electronic, do you even need banks at all?

The elimination of privately owned central banks, like the Federal Reserve, would mean that much of the nations debt would simply disappear. Ron Paul suggested nationalizing the Federal Reserve and discussed how that would make trillions of dollars that we owe to ourselves go away. Who would then control the electronic money, what about the US Treasury and eventually the United Nations. With an all electronic currency you would need international cooperation or you could not pay each other. The end result is that all currencies would need to be based on the same thing, be it gold, silver, mineral wealth, labor force, infrastructure, whatever. Just some thoughts, peace.

That depends....Who'll control the electronic currency?

Bitcoin is one electronic currency.

The issue with bitcoin is that 'all of the wealth' is tied up in the hands of a few, and mining your own bitcoins is ridiculously expensive today.

However, I've been wondering, if I purchased a bitcoin with cash, would I be able to use it to purchase things of the equivalent cash value? If this is true then it already works as needed.

The issue is the current translation value. 1 USD = N bitcoins. 1 USD can buy maybe..I dunno, a candy bar. 1 bitcoin can buy ? candy bars. For all I know nobody is aware of what the exchange rate is.

reply to post by Vandettas


Dear Vandettas,

All electronic currencies would require an international body to set the rates (and no I am not promoting this, I am just bringing it up as an issue).

I don't like cash. "Money" for me are numbers on bank accounts or on paypal, and those "numbers" somehow virtually float in cyberspace and change owners. Hardly ever do i use cash. That's just me. Money for me is something "virtual" and it only becomes real once i buy something from those "numbers" on the account, like food or a new computer etc. I think the concept of cash is very outdated.

reply to post by flexy123


Dear flexy123,

I will therefore assume, and allow you to correct me, that the ease of use is more important than the privacy of use. Please let me explain. If I can give you cash, nobody needs to know; but, every transaction that is electronic is recorded and traceable. Many will comment that if you have nothing to hide what does it matter and my answer is, why do I need to have everything I do tracked? If I have nothing to hide then why should anyone be monitoring me?

reply to post by AQuestion

Here is a thought, how would you sell people on all electronic money? I mean people like cash, so how do you find a way to make them accept the end of cash, of paper currency?

Currency is either some form of coin minted with a precious metal so that the actual value of the currency is directly tied to the price of the precious metal, or it is a form of fiat currency where the value of the note is a promissory note where the note can be exchanged for the actual thing of worth, i.e. gold or silver, or even worse, is not backed by anything other than mysticism.

The U.S. dollar is currently backed by mysticism. That is to say you cannot take the "note" you possess and redeem it for any commodity that backs that "note" because there is no commodity backing the note.

Fiat paper currency not backed by wealth is a step away from paper currency backed by wealth. Electronic currency not backed by wealth is yet another step away from wealth based currency.

Money, all money, is not the thing of wealth itself. Money is merely symbolic of wealth. Wealth is property. Property can be real estate, precious metals, intellectual property, or labor. A ditch digger does not create wealth - if such a thing is possible - by collecting money. That ditch diggers wealth exists in his, or her, ability to effectively dig ditches, and to negotiate the best possible contract for digging those ditches. That is wealth, and money is not wealth.

The ditch digger will struggle to create wealth because they are dependent upon a service, or labor, that can only function when the digger is functioning and no wealth can be created while that ditch digger is asleep. Those who genuinely amass wealth are doing so because their efforts extend beyond their waking hours and they are generating wealth even when they sleep.

In my view, the question is not how can we convince people to accept electronic currency, but why would we want to?

On a side note, I recently saw a Chase Bank commercial where several people are at a restaurant done eating their meal and the check has been presented to one of the several diners. That diner uses her cell phone to calculate the individual cost for everyone, and once calculated announces: "Everyone owes $37.50 each." Everyone but one man reach for their cell phones and begin punching keys as the one man pulls out his wallet to produce cash.

The others who are using their cell phones have all simultaneously, and astonishingly, quite robotically reached for their cell phones and are using that device to transfer funds to the woman who calculated the individual costs (presumably, but they could all be transferring the funds to the restaurant - that detail is not made clear), but the one individual man with the wallet of cash appears to be embarrassed for being an individual distinct from the rest. A woman sitting next to him recognizes his shame of being an individual (okay admittedly the marketing wants us to understand he is ashamed for being "behind the times") and shows him how he too can robotically use his cell phone to electronically transfer funds and surrender his rugged individuality to the collective.

It is an astonishing commercial to me in that it presents everything I suggest it does and does so seemingly unaware of the profound disgust so many hold for banks such as Chase and their bogus attitudes toward people.

reply to post by Jean Paul Zodeaux


Dear Jean Paul Zodeaux,

I really enjoyed reading about the commercial. I imagine an electronic currency which is actually backed by something. Recently, Greece issued bonds which are backed up by their national assets. They had to because nobody would accept their fiat currency or promises. Still, all electronic backed up by something (gold, whatever) is still electronic currency and that allows government to take away everything you own with a keystroke. Peace.

reply to post by Vandettas

That depends....Who'll control the electronic currency?

As for Bitcoins, bitcoin.org... is the main community of developers involved. There was some risk of Bitcoins getting labelled as a terrorist organisation due to the ability for completely anonymous financial transactions. While there is still a high level of encryption and security going on, some progress towards international banking and accounting standards are getting implemented.

Due to it's open source nature you can take the code and start you own currency if you want. The security comes with its brute force encryption and you are are going to need a lot of computing resources to make a sturdy economy.

reply to post by sea4ever

The issue is the current translation value.

This is where I go to check the current values mtgox.com...

The did sit at around 1 USD when getting started, have been as high as 30 USD and fell back down to 3USD. Now they are sitting around 6 USD.