Bitcoin and other cryptocurrencies are old news at this point. In 2017, bitcoin reached the level of the “world’s greatest bubble” (greater than the 17th-century Dutch tulip mania or the 18th-century South Sea Bubble). It crashed spectacularly starting in December 2017, from $19,000 per coin to $3,200 per coin over the course of the next 12 months, an 83% collapse. Other coins fell in lockstep.

Bitcoin may be discredited, but the blockchain is not. The blockchain is the technology that provides a secure and irrevocable record of transactions conducted on it. These transactions can be in any coin or in other forms of property such as shares, bonds or real estate titles.

This new reality has raised the issue of whether governments and central banks could put their existing currencies on a secure blockchain. Such currencies could include the U.S. dollar or even entirely new currencies created by Russia or China and backed by gold.

As shown in this article, the possibility of a blockchain-based U.S. dollar has come to the attention of economists who favor the elimination of cash with or without a blockchain. The leader among these economists is Kenneth Rogoff of Harvard. Rogoff wants to eliminate cash in order to limit the freedom of Americans to live their lives as they see fit.

Elimination of cash would provide a digital record of every deposit, withdrawal, expenditure or gift of every American on a 24/7 basis. Rogoff has not had any success in this effort to limit individual freedom. Now he’s trying to jump on the blockchain bandwagon as another means to eliminate cash.

He praises the benefits of blockchain in terms of accuracy, security and recordkeeping (overrated in my view) while promoting fears of what would happen if China got a blockchain currency first.

As usual with academics such as Rogoff, they don’t think things through. Forced migration to blockchain dollars would cause Americans to move to gold and silver as a way to maintain freedom from 24/7 digital surveillance. (Some gold and silver is a good idea anyway.)

Hopefully, Rogoff’s “blockchain dollar” idea will fail just as surely as his “no cash” idea and Americans will be left alone to live their lives without Big Brother in their wallets.

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