Bitcoin has had many supporters and many critics as it exploded in popularity and news over the past year. CoinDesk has featured Milton Friedman’s predictions today about a decentralized currency and how it will be part of the future in a global economy.
Consider the numbers of 25,000 merchants now accepting Bitcoin transactions. It makes sense to a merchant whether it is Overstock.com or Doctors now accepting the peer-to-peer currency because it offers low transaction costs and privacy.
The cost for a merchant to offer credit cards is 2-3% although some may be higher due to accepting American Express and some can maintain a much lower fee due to large volume. A merchant fee is determined not only by volume but average ticket size and the mix of the type of credit cards when processed for the purchase. Nobel Laureate, Robert Shiller, speaks out on a stable inflation-adjusted currency but he does not eliminate the massive fees and third parties in his suggestions.
Friedman was accurate in his vision for the future when he saw that on the Internet one could transfer an amount of money from A to B with minimal costs. Currently a transfer of money from New York to Eastern Europe or Miami Beach to South America can cost $100 for the transfer of the transaction. Bitcoin will to do the same for a fraction of the fee for whatever it costs the sender to buy a bitcoin currency.
Mi Casa Home Health Care began accepting Bitcoin in January 2014 because it allows families from out of the country to pay invoices without worrying about the fees associated with exchanging their currency for USD, according to Racquel Ricci, Administrator in Albuquerque, New Mexico in an interview to be released soon in a future article.
There were $478 billion global transactions in 2012. Internet theft came to Bitcoin in the Silk Road and Silk Road 2.0 websites which the FBI have taken down in arrests and confiscation of bitcoins held by the thieves. Friedman when speaking of a peer-to-peer currency said, ‘of course, it has its negative side. It means the gangsters, the people who are engaged in illegal transactions, will also have an easier way to carry on their business.
Still, as Nobel Laureate Robert Shiller states that even a $100 bill is easily counterfeited. There will always be theft and thieves on and off the Internet.
Friedman was against what he termed ‘collectivism’ or governments and stated that, ‘I think that the Internet is going to be one of the major forces for reducing the role of government.’ Although he died in 2006, he saw a day when the Federal Reserve Board be reduced or disappear due to the ability to de-centralize monetary exchanges.
He thought of transactions as transacting without a third party, ‘The one thing that’s missing, but that will soon be developed, is a reliable e-cash, a method whereby on the Internet you can transfer funds from A to B, without A knowing B or B knowing A.’
In Friedman’s vision to the future of providing for a reliable method on the Internet to transfer a reliable monetary currency is carried on in part by his grandson, Patri Friedman. He is an activist, software engineer and political economist who in 2008 co-founded Seasteading Institute with technology entrepreneur, investor, philanthropist and founder of Pay Pal, Peter Thiel.
The vision for Seasteading Institute is to enable seasteading floating cities which will allow the next generation of pioneers to peacefully test new ideas for government. The most successful can then inspire change in governments around the world.
It seems that Milton Friedman, one of the major economists of the twentieth century has left a legacy to lead the world into the future of monetary exchange and a new concept for living in total.
To find more about Bitcoin see the list below in the Author’s suggestions and view the video atop this article on Milton Friedman and his monetary ideas that have shaped today's free market ideas.
Twitter: Victoria Wagner@victoriaross888