Can Cryptocurrencies Save Greece?

Greece is continuing talks with its creditors, but is it time for the country that founded western civilisation to take the next step forward and expel central banks and the usury-based fractional reserve banking system? Is it time to have the first cryptocurrency based state economy?
The Greek finance minister, Euclid Tsakalotos, recently warned that there should be "no excuses" for the country not to receive the next instalment of its multi-billion-dollar bailout. He said that the Greek government had "done its part", adding "the ball is very much on the side of our creditors and the IMF".
The International Monetary Fund is an international organization of, "189 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world."[1] Formed in 1944 at the Bretton Woods Conference, which was the same conference in which the US dollar got crowned the world’s new international reserve currency, some accuse the IMF of having less moral motives than it claims to. The IMF has been accused of being a tool used by the US for economic terrorism, and for being an organization that lends fake credibility and morality to the geopolitical stances of the US and other ally states.
In Greece last week, talks between eurozone finance ministers about releasing Greece's next set of loans experienced difficulties. The Greek government is under pressure and reaching a deal at the next meeting in June was now considered urgent. The meeting is aimed at establishing whether or not Greece has done enough to receive a €7.5bn loan plus debt relief. Within the current system, the cash is vitally needed for Greece to avoid defaulting on its debt repayments.
Greece is expected to act in a subordinate manner, making economic reforms and promises in order to please its economic overlord, the IMF, and secure the funds which it needs to stay solvent in this corrupted financial situation. But, does Greek have to surrender its financial and political control, or is there another option?
Some have suggested switching to Bitcoin, or another cryptocurrency in order to save Greece’s ailing economy. Unfortunately, not everyone is in agreement.

In his article Yanis Varoufakis, the greek economist and politician who served as the Greek Minister of Finance from January to July 2015, states that Bitcoin could not be used as a replacement currency in Greece. He argues in his article (which can be found here: http://www.yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-dangerous-fantasy-of-apolitical-money/ ) that there are 2 main reasons why Bitcoin cannot replace the Euro. The two main reasons which he stated are listed below:

The bitcoin social economy is bound to be subject to chronic deflation.
Fear of the “bitcoin aristocracy” manipulating the currency in a manner that enriches them at the expense of financial instability.

These are both valid points with Bitcoin, but neither point is relevant or applicable to all cryptocoins. Let’s take the first point:

The bitcoin social economy is bound to be typified by chronic deflation.

Bitcoin is, by design, limited to 21 million Bitcoins, many of which are not yet in circulation. When all of these bitcoins have been produced, and no more are being produced, the supply of bitcoins will cease to grow while the demand continues to grow, assuming that Bitcoin is a successful currency then. Thus, the value of Bitcoin will continue to grow, and the price of products valued in Bitcoin will become less in number. When currency increases in value, and the value of products decreases when compared to the currency, we have a deflationary situation. This is statistically quite a rare phenomenon to see played out over extended periods of time, due mainly to most governments policies which aim at seeing a 2% per annum inflation rate so that they can continue printing fiat money to line their pockets with.

As the Bitcoin deflation progresses, more and more decimal places can be added to the coin to make up for it’s ever increasing unit value. This adds the insecurity of price instability, but is this so different from the unstable and inflationary nature of fiat currency? I don’t think so. In one system, the fiat system, you have the price of goods and services increasing when measured using units of currency, each year demanding a larger and larger quantity of USD, GBP, etc. In the other system, the deflationary Bitcoin system, you will have the value of goods and services decreasing when measured against the value of a unit of bitcoin. Each year those same goods and services are demanding a lower and lower quantity of Bitcoin. Neither one of these situations is ideal to anyone other than the central banks who get to profit off of the fiat currency inflationary situation. However, as a saver there is a benefit to the deflationary model as you will increase your savings purchasing power as deflation continues.

In an ideal world inflation would run at 0%, offering fiscal stability and predictability to the masses. The governments and banksters are those who benefit from the current inflationary situation, which allows them to print vast quantities of money and have us pay for it. As they print more money, the purchasing power of each unit declines. Therefore, as the central banks print more money, the purchasing power of your bank account declines, This is the shadowy tax of inflation; this is why the US government wants inflation of 2% per annum.

So, if inflation and deflation both have their shortcomings, does it make sense to shun a deflationary currency in favour of an inflationary one? No, especially considering that the world’s current fiat money system is currently being manipulated by central banks around the world who are printing historically unprecedented quantities of fiat money, and devaluing the currency at an equally unprecedented rate. Many believe that stopping this manipulation is of the utmost importance.
A deflationary Bitcoin economy is certainly more attractive to savers, and less attractive to banksters. Surely that is a good thing!

Fear of market manipulation by the “bitcoin aristocracy” who own vast quantities of Bitcoin

Firstly, this worry is nearly redundant when you consider that the current fiat currency system is a system that is highly manipulated and controlled by the “fiat aristocracy”, in particular large and central banks. For the manipulators of our fiat system to claim that we should be fearful of a cryptocurrency system, due to its ability to be manipulated, is similar to a pimp telling a hooker not to work for another pimp as he will sell her body for sex; it is pure hypocrisy!

That said, it is unfavourable for the few in any system to have thousands of times the average wealth of the masses. Surely there is another way…..

Could Greece create their own cryptocoin?

Why not?

Imagine if Greece created its own currency, let’s call it Bit-drachmas after the coins of ancient greece. Assuming that no one was capable of stabilizing the Bit-drachmas to such a level that there would be 0% inflation, which would be very difficult to do, the government could solve the inflation/deflation issue by coding the Bit-drachmas so that it creates, for example, 2% more coins per year. This would allow for an inflation level that is similar to the one aimed for today by the FED and other central banks. Bit-drachmas would no longer be deflationary like their predecessor Bitcoin.

Now imagine if Bit-drachmas were created by the Greek government, but with a decentralized blockchain similar to Bitcoin’s; the government could distribute all Bit-drachmas fairly which would prevent the creation of a “Bit-drachmas aristocracy”, and, at the same time, will allow for a decentralised currency that is completely transparent and unable to be manipulated easily.

The main difficulty of replacing the currency in Greece is figuring out how to share the wealth of the country fairly. It may make sense to keep a percentage for running the government, and share the currency equally between the population. Instead of directly paying the Greek citizens, the money could slowly be given out to the public by their employers who traded their foreign reserve currencies in to the government for the new Bit-drachmas.

To be honest, I’m just thinking out loud! But, it is obvious to me that it makes far more sense for the Greek people to use cryptocurrencies to regain their financial freedom than it does for them to remain economic slaves to the IMF and their other debtors.

A source of information for this article was: http://www.yanisvaroufakis.eu/2013/04/22/bitcoin-and-the-dangerous-fantasy-of-apolitical-money/