Why Bitcoins Lack Currency to be 'Money'

Milton Friedman, in his book Money Mischief, reported the well-known story of the monetary system of a small island in Micronesia. At the end of the 19th century, the inhabitants used stone wheels as a medium of exchange and as a store of wealth. The colonial government imposed "fees" on disobedient district chiefs by painting black crosses on these stone wheels, thus "confiscating" them. This induced the locals to change their ways and work harder, paving roads they were previously reluctant to pave, in order to have these marks erased and get their wealth back. Friedman concludes that this example illustrates how important appearance, belief and myth become in monetary matters.

-Article by Reuven Brenner

Read full article: Asia Times, February 14, 2014