I have long been an advocate for a single internet currency, independent of all governments. Looks like I'm not alone.
It's a hard sell though because so much of our lives are tied into the currency of the region that we live. How would you pay your rent online? How would your landlord settle their mortgage repayments?
We tend to believe that the fabric of our society is tied to the currency, and "real-world" money, even if in reality it no more exists than virtual money. In fact in the UK there have been a number of Towns who have printed their own money, and visitors come and buy that currency in preference to the National Currency for use in the town's shops bars and restaurants.
> I have long been an advocate for a single internet currency,
> independent of all governments.
I don't see a single currency as a replacement for government currencies for the simple reason that managing inflation/deflation (including introduction of new money as the population/economy changes), particularly as a way of managing debt and facilitating class mobility are decisions that vary between cultures.
The lack of fiscal control was a common complaint some decades ago against the euro forming, and as another comment points out, the loss of monetary control has exacerbated some European countries' fiscal problems.
Adopting an common internet currency intended to replace global currency will likely fail for this reason, and also because of governments' concerns for the tax/revenue implications.
I totally understand how governance-free currencies appeal to libertarians and hacker-types, but the fact of the matter is that they do not serve society well.
The more theoretical explanation why governance is necessary is roughly as follows. While our living standards are ultimately only concerned with real wealth, the fact of the matter is that our economy is driven by moving nominal wealth around, i.e. it is driven by flows of money. If we ignore issues of fair distribution for a moment, our real living standards depend very much on how much money flows per time as aggregate demand towards buying things.
But flows of money add to and subtract from the stocks of financial assets of individuals. And since every financial asset you own is somebody else's liability, your ability to accumulate net financial assets is limited by others' willingness to incur net financial liabilities.
Now economists like to theorize that those things balance out nicely in equilibria, where the desire to accumulate net assets and the willingness to incur net liabilities somehow are matched by a market. In practice, however, the paradox of thrift occurs.
This is because (a) the real world does not actually work the way that those particular economic models say it does, and (b) even if the real world did work that way, the conclusions rely on assumptions about how uncorrelated the individuals in the market are. Particularly in times of crisis, the behavior of individuals and firms tends to be highly correlated indeed, and you end up in a kind of Prisoners' Dilemma, where nobody wants to be the first person to incur liabilities, but because of that, the flows of money dry out, and because of that, the real living standard decreases.
A governing body can break this kind of symmetric behavior by unilaterally deciding to incur additional liabilities via spending.
Note that I implicitly assumed in my argument that your goal is to provide for the society's real living standards, and I subordinate economics to that goal. I realize that many "sound money" advocates do not think that way, though I've never really understood why.
I recognize that the governing body can also cause a huge amount of trouble, but limiting that trouble is what democracy is for.
It's a hard sell though because so much of our lives are tied into the currency of the region that we live. How would you pay your rent online? How would your landlord settle their mortgage repayments?
We tend to believe that the fabric of our society is tied to the currency, and "real-world" money, even if in reality it no more exists than virtual money. In fact in the UK there have been a number of Towns who have printed their own money, and visitors come and buy that currency in preference to the National Currency for use in the town's shops bars and restaurants.