Thats true on the current value, but if currency wasnt fiat the gold price today would be 1000 times higher, wars will still happen but they would need someone to loan them the money instead of just printing it.
If bitcoin was in use as sole currency it would mean that its value only goes up which is totally opposite of the fiat currencys. So today 1k bitcoin buys you a house and in 10 years time it still buys you a house. While dollars halves its value in 10 years because of inflation and money printing.
All the gold that has ever been mined in history up until this point in history is estimated at 171,300 tons. Pricing at 1500 US dollars per troy ounce as of April 2013, is estimated at 8 trillion dollars. The price for that same ounce in 1913 (just before the federal reserve was created, the dollar lost 96-98% of it's value since then)
was 20 bucks.
So going off of that, 8 trillion dollars in 1913 money when the US dollar was at it's strongest, would've been $339,976,905,609.19 billion at that time.
Here's an article from reuters saying that the war cost more than 1.7 trillion (that's leaving out benefits to be paid out to veterans totaling 490 billion but estimated to grow to 6 trillion in the next four decades).
Let's round up to 2 trillion. Going off of that number, 2 trillion in 1913 would've been $83,182,442,623.02 billion dollars, or a
quarter of all gold that's been mined in human history. (Here's the inflation calculator I used to get those figures so you can test them:
Link)
You're right, it would cost less in more powerful dollars and they
could still fund it.
But instead of being able to endlessly print off money, they'd have to raise taxes.
Insanely.
If the war has cost 2 trillion so far and it's stretched out over 10 years, that's 200 billion per year. With the current population of the US (
317 million) that'd be 630 dollars per person,
per day.
Which means they would have to go door to door with a dollar sign embroidered sack,
every single day, asking for 630 from every single man, woman and
child in the continental United States of America.
I think I'd pretty quickly declare my neutrality and move to Switzerland with that in mind.
Sorry if I seem to be making this overly political, this isn't really about the war in Iraq. This is about war in general. 1913 was the year that the federal reserve bank came into being and was allowed to just print fake money that wasn't backed by anything. World war 1 (for the US), began on July 28th, 1914, the very next year.
What would typically happen before this insane printing of fake money able to finance endless wars, was that the warring countries would just fight each other into a stalemate until they had no more resources left to continue it. With the development of fiat currency, that allowed them the ability to just wage war permanently if they were so inclined.
Even in Roman times, Rome was able to keep fighting their endless wars because they just kept melting down their gold coins and diluting them.
Near the end of the Roman empire, their currency had been devalued by 98%.
Kind of an eerie parallel.
You can't do that with Bitcoin. It has a set amount of coins in existence, or that ever will exist. You can't keep devaluing them. And since they can keep being traded in smaller and smaller increments, you don't have to worry about them all getting destroyed and having no currency anymore.
0.00000001 BTC is the smallest increment that Bitcoin can go to. So that will
never realistically be a problem.
Being unable to print out endless money is one of the big reasons why banks, governments and other assorted entrenched financial interests are scared to death of what a technology like Bitcoin represents. Printing money won't be possible.
That's a whole lot of political power and political favors that go straight out the window. If I were involved with the financial industry in a high level capaity, you'd be
damn sure that Bitcoin would have my attention.
When they talk about
"competing" with Bitcoin, they don't actually mean they're going to have fair, free market capitalistic competition that's decided by the consumer. What the banks mean is that they're going to go straight to the government and start lobbying to put restrictions on BTC/crypto-currency technology.
From what I read and what I personally think, the US won't go the route of China and ban Bitcoin outright. People are too aware of Bitcoin now, and their window for doing that under the radar pretty much passed. They still could, but people would blatantly see what they were doing.
Most likely, they'll just keep trying to link Bitcoin to the funding of terrorism. To being the main currency used to purchase drugs and weapons, and being the sole form of currency used by child molesters all over the world and until the end of time. So they'll try to keep getting more and more regulations passed to limit the usefulness of Bitcoin, so it gets to a point where no one wants to bother using it because it's such a pain in the a$$.
You can see this by the
Bitcoin licensing they just did in New York, and stuff like this
sting operation that went down to bust a guy trying to trade bitcoins in person.
To use the analogy of Stefan Molyneux (the one speaking in the video I posted), instead of taking a sledgehammer to the engine and breaking it to pieces, the government/financial sector will just stand back and keep throwing little bits of sand into it. And bit by bit, it'll start to break down until most people will find it so difficult and cumbersome to use, they'll just say "Well, Bitcoin was interesting idea
in theroy...but it just didn't work out."
I think that's the real danger from the government/financial sector going forward. I'll again echo what Molyneux spoke and say that it seems like most BTC users aren't getting just how mind-bogglingly massive the entrenched interests we're going up against are. Anyway, that's my 2
cents.
For anyone who doesn't fully understand Bitcoin wanting to get a clear, concise picture of what Bitcoin actually is, here's a video that's pretty good at explaining the whole thing:
