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Thoughts on a Country Adopting a Bitcoin-Like Currency

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A few months ago, a Latin American advisory group asked me to comment on the Digital Sucre and the potential impact of a country adopting a digital or crypto currency as legal tender.  It never occurred to me that I should post the surface-scratching responses I came up with, until American Banker‘s Bailey Reutzel asked the question (here).  With the upcoming release of AuroraCoin in Iceland, and the adoption of a bitcoin clone by the Oglala Lakota Native American nation, this seems to be a good time to poke the discussion.  So here go my two cents in the hope that a few extra thoughts will be triggered.

In concept, is bitcoin more a currency or a payments system?

Bitcoin is both.  In addition, and most importantly and fundamentally, it’s also a protocol on top of which additionally functionality can be built.  The fact that Bitcoin (with a capital B) is multiple things at once is what creates most of the confusion about it.  Bitcoin is a sophisticated globally distributed asset register that, at this moment in time, is mostly being used to register value in USD or other fiat currencies.  Hence the fact that it’s Continue reading

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