by David Chen

Cryptocurrency is different from many common forms of electronic currency which are often still considered to be fiat currency and controlled by government bodies.  In normal sense, cryptocurrency is often decentralized therefore it is secure and independent from control of any small number of groups or individuals.  The security and independence are the core values of cryptocurrencies today, such as those of Bitcoin.  Such security and independence are great for international trade with requirements to be border-less, paperless, often happening in the cyber world.  The cryptic nature of cryptocurrency also created pros and cons for this form of money, when widely used in the market circulations:

Pros

• free of political turmoil in any particular countries
• transaction history are transparent and cannot be changed
• money can easily change hands, therefore great for facilitating (international) trade and stimulating GDP growth

Cons

• pron to rejection when countries or organizations decide to refuse its circulation through legal means or propaganda campaign
• mining activities (Bitcoin in particular) consume energy and with logic being too single dimensional, lack of true meaning of “productivity” in the real world

 

Can Transparent Gold avoid its pitfalls?

Answer: Yes (within the boundary and restrictions of Mundellian Trilemma, finding optimal combinations).