Something I did not stress about the likelihood of a crypto-currency takeover in my Alphaville post that I should have done, and which cropped up in a Twitter exchange with Joe Weisenthal, relates to the fact that in theory, and even in history, the unit of account and medium of exchange can differ/have differed.So, here, the question I started with was the low likelihood that Bitcoin or similar might take over soon, given the small value of currency in circulation relative to the value of paper US dollars.[100bn compared to 1.4trn].In this 2000 paper by Woodford he explains how the central bank could retain control of monetary policy, even if people stop using central bank money as a medium of exchange or store of value, simply by central bank money remaining the unit of account.Analogy:  if central banks were given the power to define the metre in a textile based economy, then even without being the monopoly supplier of money they could pump up the business cycle by lengthening the metre.

Textile suppliers would have temporarily fixed prices per metre of cloth.[Which amount to amounts of goods they would accept directly, or indirectly, in exchange for a metre of cloth].The lengthening of the metre would pump up demand for cloth [which was now cheaper in terms of goods per old metre!Still with this?] in the same way that an increase in the money supply reduces the real price of fix-price goods in a conventional model economy.We don’t yet broaden out central bank empires to defining the metre, but we could contemplate it one day:  we’d have to include the kilo, litre, and presumably also allow central banks to define the time unit so that the otherwise weightless/dimensionless service economy could be controlled.In Chile, policy actively sought to disentangle the unit of account from the medium of exchange, with the creation of the Unidad de Fomento.This was to try to avoid the costs of endemic inflation in terms of the Chilean Peso.Exchange rates between UDFs [which had no material form – you could not buy UDFs] and Pesos were published daily in the newspapers, which were simply ways of presenting changes in the CPI.

[See Shiller(2002) and also this nice blog post by JP Konig].A similar indexed unit of account concept, the ‘Unidad Reajustable’ exists in Uraguay.And there are other examples too.In the case of crypto-currencies, we are contemplating a switch that from the perspective of the authorities is involuntary, not voluntary like in Chile.But the Chilean experiment shows that the unit of account/medium of exchange separation possible in theory is also possible in practice.ethereum trend priceIf central authorities can will this separation, perhaps markets can coordinate on it too.bitcoin price speculationThat was a long-winded and somewhat contorted way of explaining that it’s at least possible that the take-up of Bitcoin and similar as a medium of exchange mis-states the probability that it becomes a unit of account.bitcoin kurs usd

Control of monetary policy may escape central banks even if Bitcoin never takes over as a medium of exchange;  similarly, if central banks can retain rights to define the unit of account, it might be relaxed – a small seigniorage loss aside – about losing the role of monopoly issuer of the currency.Deposit fiat currency like USD/EUR into Exodus to buy bitcoin.Unfortunately Exodus does not support deposits from fiat currency like the dollar (USD) or euro (EUR).litecoin hard wareThis means that you are not able to purchase bitcoin, dash, ether, or any other cryptocurrency that Exodus supports.ganar bitcoins rapidamenteToday, Exodus only supports cryptocurrency and blockchain assets.ptc for bitcoinWe recommend people use Coinbase to buy bitcoin.If Coinbase is not available in your area or is unavailable to you, you may want to try some of the following exchanges: / (US) / (US) / (global) https://www.bitstamp.net/ (global) / / allow you to buy bitcoin in person, with gift cards, or bank deposits.

/en/ is another option.The digital currency Bitcoin promises all these things.And while it's far from achieving any of them -- its value is unstable and it's rarely used -- some have high hopes."There will be alternatives to the dollar, and this might be one of them," said former U.S.If people start using bitcoins en masse, "it'll go down in history as the destroyer of the dollar," Paul added.It's unlikely that Bitcoin would replace the dollar or other government-controlled currencies.But it could serve as a kind of universal alternative currency that is accepted everywhere around the globe.Concerned about the dollar's inflation?Just move your cash to bitcoins and use them to pay your bills instead.Tired of hefty credit card fees?Bitcoin allows transactions that bypass banks.Even economists who embrace the power of central banks, like University of Michigan professor Miles Kimball, recognize the currency's potential."Bitcoin really shows governments are behind the curve," Kimball said.

"It demonstrates there's a demand for an electronic equivalent of cash."Bitcoin is hardly the first attempt at a digital currency that operates outside of state boundaries.Ebay's (EBAY) PayPal plans to launch a digital interplanetary payment system.There's also growing support for a concept called seasteading, floating cities on international waters where business and innovation aren't held back by laws.Millions of Africans, particularly in Kenya, make payments simply by texting one another.The widely used M-PESA system allows people to bypass banks and electronically transfer cash.Some even use mobile minutes as a form of currency.Digital payments make buying items internationally a smoother process, because exchange rates are gone and there are no cumbersome bank regulations or fees.It also enables people to make payments in areas without bank access or where carrying cash can be dangerous.However, Bitcoin has advantages other digital payment systems don't.Transactions don't require names -- just digital wallet IDs -- which makes them more private than credit cards.

More importantly, the system was designed to produce a slow and steady supply of bitcoins, making it less susceptible to losing value via inflation."That's the holy grail for people who believe in freer markets and currency," said Adam Gurri, a libertarian economics writer in New York.There are no middlemen charging fees to move money between users.You can transfer bitcoins -- even infinitesimally small fractions of one -- directly to others' digital wallets.But don't expect governments and banks to let Bitcoin take over so easily.Financial institutions will lose business if people stop using their payment systems, and central banks like the U.S.Federal Reserve would lose their ability to help slow and speed up economic activity.Paul expects banks to lobby and authorities to crack down."Governments absolutely demand a monopoly on money and credit.They're not going to give it up easily," Paul warned."They will come down hard."Kimball hopes politicians will take a less combative approach, choosing instead to compete.