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Hyperbitcoinization: Visions of Bitcoin Fueling the Post Covid-19 Shadow Economy

07/04/2020 by Idelto Editor

With the recent coronavirus spread and its overall effect on the global economy, some people believe the powers that be are preparing a financial reset. During these times, a number of bitcoiners think a bitcoin-induced form of fiat currency demonetization will take place, otherwise known as ‘hyperbitcoinization.’ However, a few speculators believe digital assets in the crypto economy are actually meant to further the underground shadow economy. In a world filled with overbearing politicians and malicious data-collecting corporations, the surveillance state could easily make cryptocurrencies far more valuable by fueling the world’s shadow markets.

Also read: Evidence Shows Politicians and Wall Street CEOs Expected the Market Crash Well Before Covid-19

A Different Kind of Hyperbitcoinization

A number of bitcoiners think that someday, bitcoin could grow so popular that it becomes the most used money in the world. These speculators believe that the protocol will be uncontrollable and eventually be adopted by everyone leading to hyperbitcoinization. But what if bitcoin covers only a fraction of the global economy, and more specifically the black and gray markets that operate beneath the legal system. Adoption of a crypto that fuels the shadow economy would still be a threat to the manipulated fiat system and it could remain uncontrollable. In fact, estimates show that the shadow economy is the second-largest economy in the world. When bitcoin was born in 2009, the Organisation for Economic Co-operation and Development (OECD) predicted that by this year in 2020: “more than two-thirds of the world’s workers will work in the shadow economy.”

The shadow economy or ‘System D’ isn’t just black market trades like drugs, weapons, and items the government has banned. System D participants include any paid workers who don’t report their financial transactions to the government and the funds remain untaxed. Traditionally, the general public has always assumed that the shadow economy exists in regions with fewer laws and in underdeveloped parts of the world. But that’s not the case at all, as underground financial systems exist in countries with a lot of wealth, high taxes, and significant amounts of regulation. The top countries in the world with the biggest shadow economies include places like the United States, Brazil, Italy, Russia, Germany, France, Japan, the United Kingdom, and Spain.

With the coronavirus plaguing the world and industry shutdowns squeezing the economy, some individuals think that governments and central bankers are planning a financial reset. Speculators assume that it’s the perfect time to usher in a “New Deal” similar to the way Wall Street and Franklin D. Roosevelt (FDR) restructured the American monetary system. Governments and central bankers are already pushing a few versions of digital cash and a cashless society, but the systems are centralized and meant to monitor people’s everyday transactions. Under the veil of crisis, nation states could easily reset the financial system right now by creating a cashless system that’s maintained by central bankers and bureaucrats.

Bitcoin and decentralized cryptocurrencies could still experience a smaller form of hyperbitcoinization by people who want to escape the “Green New Deal.” Cryptocurrencies could grow immensely valuable, even though they would only be used within the underground financial system. Digital money like bitcoin could easily be valued for far more than six-figures if entire the shadow economy adopted the decentralized asset.

Cypherpunks Write Code – E-Money & Daemon

The cypherpunks in the ‘90s discussed the rise of a private digital cash system that bolsters market anarchy and a new monetary system. In the 1994 Wired article “E-Money – That’s What I Want,” the editorial describes how the cypherpunks envisioned a brave new world that leverages a digital cash system. “The killer application for electronic networks isn’t video-on-demand,” explained Wired columnist Steven Levy. “It’s going to hit you where it really matters – in your wallet. It’s not only going to revolutionize the net, but it will also change the global economy,” Levy stressed. Back then, no one had heard of Satoshi Nakamoto and people’s concepts of digital cash stemmed from individuals like the renowned cryptographer David Chaum, the founder of Digicash. Other cypherpunks like Tim May and Wei Dai, however, envisioned a world with untraceable digital cash and the concepts of crypto anarchy.

These visionaries, who came well before Nakamoto, predicted systems that not only increased economic efficiency, but also the ability to transact across any border without censorship. Of course, individuals like Tim May forecasted that an underground electronic cash system could make big problems for the nation states. With an untraceable digital asset, it could destroy the benchmark rates of legal tender, increase tax evasion and money laundering, and disrupt the world’s money supply. If digital cash is just as convenient as today’s credit cards but also facilitates private financial transactions, it will likely continue to grow stronger. But unfortunately, it also will be attacked a lot more as well, as a true untraceable electronic cash system that’s not controlled by a single entity would be the nation states’ archnemesis.

The techno-thriller “Daemon” written by novelist Daniel Suarez describes a system that is similar to decentralized cryptocurrencies like bitcoin. In the novel, an individual publishes a new type of software that creates a cyber-space fueled shadow economy. Essentially, system users are rewarded for developing “decentralized hubs” and peer-to-peer networks by leveraging the Daemon. The very same thing could happen to bitcoin and the crypto economy to where the poor, middle class and even the rich can participate in hiding money from big brother’s watchful eyes. In the novel Daemon, Suarez tells the readers about online web markets that are hidden from the general public and operatives leveraging the financial system to exchange important data. 12 years before Daemon was published, the cypherpunk Eric Hughes also envisioned “anonymous systems.”

“We the Cypherpunks are dedicated to building anonymous systems,” Hughes wrote in 1993. “We are defending our privacy with cryptography, with anonymous mail forwarding systems, with digital signatures, and with electronic money,” he added. Hughe’s continued:

Cypherpunks write code. We know that someone has to write software to defend privacy, and since we can’t get privacy unless we all do, we’re going to write it. We publish our code so that our fellow Cypherpunks may practice and play with it. Our code is free for all to use, worldwide. We don’t much care if you don’t approve of the software we write. We know that software can’t be destroyed and that a widely dispersed system can’t be shut down.

Shadow Market Money Could Be the ‘Ultimate Expression of Intentionality’

Of course, a number of people begging governments to approve cryptocurrencies like bitcoin and who hope the status quo adopts a strong digital currency, really don’t want the shadow market associated with the technology. Despite what they think, crypto transactions are still being used to skip taxes today and pay for things on the darknet. For instance, a report published in 2018 finds that illegal activity stemming from BTC transactions accounted for 44% of all transactions. It’s quite possible that bitcoin and cryptocurrencies won’t serve the white markets and traditional bankers and a slew of bitcoiners will be fine with that type of result. In 2015, the founder of Defense Distributed (DD), Cody Wilson told me in an interview how he would probably celebrate bitcoin being driven underground.

“Without a big expression of intentionality to what is considered not the polite things to do with bitcoin — specifically money laundering, specifically private access to your coin, holding your own keys,” Cody stressed during our interview. “Without projects that express these principles, you have nothing of what you want with a revolution. This leaves me to proclaim that most people involved with bitcoin were not serious about that in the first place.”

What do you think about a shadow economy hyperbitcoinization event? Let us know in the comments section below.

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Russian Official: Cryptocurrency Bill Completed — Effects on Payments, Exchanges, Miners

04/04/2020 by Idelto Editor

The chairman of the Russian State Duma Committee on Financial Markets has confirmed that the bill which provides the regulatory framework for cryptocurrencies in Russia has been completed. The official explained key features of the bill, including how cryptocurrency exchanges and miners will be regulated. However, the bill’s adoption has been delayed due to the coronavirus pandemic.

Also read: IMF Declares Global Recession, 80 Countries Request Help, Trillions of Dollars Needed

Work on Russia’s Cryptocurrency Regulation Completed

Anatoly Aksakov, Chairman of the State Duma Committee on Financial Markets, has confirmed that work on the law “On Digital Financial Assets” has been completed, Russian media RBC reported this week. Aksakov, who is also the deputy of the State Duma of the Federal Assembly of the Russian Federation, has been overseeing the drafting of the bill.

The chairman explained that the bill provides the definition of cryptocurrencies and prohibits their use as a means of payment, elaborating:

We came to the conclusion that it is necessary to define these tools but to prohibit their use as a means of payment. The law will define digital financial assets, the procedure for their issue and circulation. It will also include the issue and circulation of digital assets secured by goods.

While noting that cryptocurrency mining is not mentioned in the bill, Aksakov stressed that it “is a type of business that produces value,” so it should be taxed. In addition, he clarified that the new law will not interfere with crypto exchanges if they do not violate any directives, but their activities will be regulated.

Impact of Coronavirus Outbreak on Russian Crypto Bill

While work on the bill to regulate cryptocurrencies in Russia is done, Aksakov explained that its adoption has been delayed due to the coronavirus pandemic, “probably until the end of spring.” The official indicated that “Because of the coronavirus, all legislative processes have slowed down, the focus of attention has switched to priority measures to combat the pandemic,” the publication conveyed.

The bill “On Digital Financial Assets” was first submitted to the State Duma in March 2018. Aksakov said several times in the past that the bill was ready. However, he later explained that due to irreconcilable disagreements in the government regarding this new type of asset, the bill was repeatedly amended and its adoption subsequently delayed. The central bank, for example, has opposed its legalization.

What do you think of the Russian crypto bill? Let us know in the comments section below.

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Gold Investors Are Terrified Central Banks Might Dump Bullion During the Economic Crisis

03/04/2020 by Idelto Editor

Despite what gold bug Peter Schiff says, economists are uncertain that gold will shine during the current coronavirus crisis. While gold and other precious metals have seen decent gains in the last few weeks, a few investors are terrified that central banks will use their flight-to-safety assets in order to save their economies. Data shows that the U.S. owns the biggest stockpile of gold reserves and the Federal Reserve could very well unload the bullion in times of extreme financial stress.

Also read: Homeowners Can’t Pay: US Lenders Prepare for Catastrophic Real Estate Market

Central Banks Might Need to Sell Gold, Which Could Crush the Price Long-Term

Just like digital assets like bitcoin, investors are curious about gold and whether or not the metal will rise much higher during the financial meltdown. For over a millennia, gold has been considered a safe-haven asset and the yellow metal is far more scarce than the unlimited fiat central banks create regularly. Despite the scarcity, economists understand that central banks are the largest holders of gold and there’s a great possibility they could dump on the market at any time. In 2019, central banks worldwide purchased the most tonnage of gold in more than 50 years.

Interestingly, in the midst of the coronavirus outbreak, Russia’s central bank surprisingly stopped buying gold and gave no official reason. Russia was not the only country to curb gold purchasing as Kazakhstan, and Uzbekistan brought gold purchases to a grinding halt. Speculators assume central banks are simply using gold for its flight-to-safety purpose and they will have to sell the bullion when economies get crushed.

Statistics show that the U.S. is the largest holder of gold reserves with 8,965 tons to-date. This is followed by Germany (3,709t), the International Monetary Fund (3,101t), Italy (2,702t), France (2,684t), Russia (2,504t), China (2,159t), Switzerland (1,146t), Japan (842t), India (686t), Netherlands (674t), and the European Union (556t).

Financial columnist David Fickling explains in a recent editorial that investors should not “expect a crisis to be good for gold.” “It might be argued that the current crisis is precisely the sort of emergency that proves the enduring value of gold for a central bank, as an asset with no counterparty risk that can be sold in an exchange for any currency if things get tight,” Fickling wrote on April 1. Fickling continued:

It’s worth reflecting that the surging price of gold is increasing the share of bullion in most central banks’ reserves right now, in some cases to the point where they need to think about selling.

Retail Investors Forced to Pay Higher Premiums for Small Bars and Coins

Further, even though investors might want to get some gold to hold onto as a safe haven asset, financial news outlets are reporting on gold dealers explaining there are “big shortages of small bars and coins.” Small bars and coins are popular among retail consumers and people looking to grab some are paying “well above the per-ounce prices being quoted on financial markets.”

“People want to buy, not to sell gold,” detailed Mark O’Byrne, the founder of the firm Goldcore. “We have a buyers’ waiting list and we emailed our clients seeing who wished to sell their gold. At this time there are roughly only one or two sellers for every 99 buyers,” O’Byrne added.

In fact, retail premiums for gold “have exploded,” remarked Markus Krall, CEO of Degussa, a German-based precious metals dealer for retail investors. Krall said that the price of bullion at certain shops can be 10-15% above spot prices. Furthermore, Ronan Manly, an analyst at Singapore dealer Bullionstar told the press that Kilobars distributed by Argor-Heraeus SA are selling for 6% above spot. Even though there’s a shortage of small bars and coins, gold bugs like Peter Schiff still think that the yellow metal will surely skyrocket in the near future. Thanks to the stimulus plans across the world, gold proponents have always said that gold will be the best store of value. Many other gold proponents agree with Schiff and Bob Haberkorn, senior commodities broker with RJO Futures feels the same way.

“With all of the stimulus money, interest rates at zero, loss of jobs and multiple battles on the economic front, I can’t see how gold is not higher next week,” Haberkorn told Kitco on Thursday.

The Benefits of Bitcoin: Portable, Harder to Confiscate, and a Superior Rate of Issuance

While analysts and wealth managers ponder if gold will be a safe haven asset during the current crisis many believe digital assets like bitcoin will be king. There are various reasons why bitcoiners think crypto is better than gold and one of the biggest is the fact that bitcoin is much harder to confiscate. Gold investors are often reminded of when the U.S. stole everyone’s gold in the 1930s, back when President Franklin D. Roosevelt (FDR) outlawed the yellow metal. Bitcoin is far more portable than gold, as traveling with the metal could weigh hundreds of pounds, which often leads to storing it with a third party.

Gold Investors Are Terrified Central Banks Might Dump Bullion During the Economic Crisis — Bitcoin.com has numerous resources available for anyone to get started learning about and using cryptocurrencies like BCH, BTC, and ETH. Our comprehensive website has a local peer-to-peer marketplace, an exchange, a fantastic gaming platform, a mining pool, cloud contracts and so much more. Check out our guides, resources, and services today.

Additionally, bitcoiners are more confident in the BTC supply and there’s no central banks to dump on the market. Moreover, BTC’s rate of issuance continues to outshine gold as 3,300 tons of new gold or $200 billion is mined every year. There’s a myriad of reasons why bitcoin and cryptocurrency assets are built for economic calamities such as the one we are experiencing today. If you are interested in learning more about bitcoin then check out our guides and educational resources today.

What do you think about gold during the economic crisis? Let us know in the comments below.

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Regulatory Roundup: Crypto Regulations Advance Despite Global Crisis, Cash Shortages, Bank Closures

25/03/2020 by Idelto Editor

In this roundup, we cover crypto regulatory developments amid the global crisis effected by the coronavirus outbreak, bank closures, interest rate cuts, and plunging stock markets. Through it all, governments worldwide are still focusing on cryptocurrency regulation, including the U.S., South Korea, India, and Russia.

Also read: Bitcoin Legal in India — Exchanges Resume INR Banking Service After Supreme Court Verdict Allows Cryptocurrency

US: Proposal to Issue Two $1 Trillion Coins, Covid-19 Responses, State Cryptocurrency Bills

Governments worldwide are in a panic mode as the number of covid-19 cases has skyrocketed, bringing many industries to a standstill. In the U.S., the Federal Reserve has slashed interest rates to 0% and launched unlimited QE, but the moves have failed to impress the markets so far. Some financial institutions, facing cash shortages, are imposing withdrawal limits, which threatens the risk of a bank run.

An attempt to solve the economic problem was proposed by U.S. Rep. Rashida Tlaib, who wants the U.S. Treasury to mint two trillion-dollar platinum coins. Her new “Automatic Boost Act” claims it will not add any debt to anyone thanks to the ideas behind Modern Monetary Theory. Some supporters of this theory believe that it can attract crypto proponents, as news.Bitcoin.com explained.

Several U.S. states have independently pushed ahead with their own crypto bills. The state of Illinois has advanced a bill to allow its Treasury to seize cryptocurrencies left unclaimed at custodians after five years. The state of Hawaii is looking for cryptocurrency companies to join its first regulatory sandbox for digital currency, launched on March 17. Applicants can apply until May 1.

In Rhode Island, House Bill 7989, entitled “Rhode Island Economic Growth Blockchain Act,” was introduced on March 11. The bill “Establishes an economic growth blockchain act, set regulations for the sale of hemp, regulate virtual and digital assets and establish depository banks for these purposes,” its summary details. On the federal level, Rep. Paul Gosar introduced the Crypto-Currency Act of 2020 on March 9 while under a coronavirus self-quarantine.

Meanwhile, the New York State Department of Financial Services is requiring each regulated institution, including crypto companies, to submit a response describing their plans to address the operational and financial risk posed by the covid-19 outbreak. They have 30 days from March 10 to submit their responses.

South Korean Government Approves Regulatory Framework for Cryptocurrencies

Amid the coronavirus outbreak, the South Korean government approved a revision to the Act on Reporting and Using Specified Financial Transaction Information at a cabinet meeting on March 17, the Financial Services Commission (FSC) announced. The bill passed National Assembly on March 5, as news.Bitcoin.com reported.

The FSC explained that cryptocurrency businesses will be required to report their transactions to the Korea Financial Intelligence Unit (KOFIU). They will be subject to basic AML requirements, including customer due diligence and suspicious transaction reporting. They also must “follow additional obligations such as keeping separate transaction details for users,” maintain separate transaction details for users, ensure that only real-name accounts are used for crypto trading, and obtain approval from the FSC and KISA (Korea Internet & Security Agency) to offer services in the country.

Financial institutions will be required to conduct customer due diligence on the crypto-asset business operators they deal with, checking whether these companies report their business to KOFIU and maintain customer deposits in a separate account. “The revision bill will take effect one year after promulgation, and the current crypto-asset business operators will be given a six-month transition period to report to the KOFIU,” the FSC emphasized, adding:

This revision act will place Korea’s legal framework on crypto assets more in line with international standards set forth by the Financial Action Task Force (FATF) and strengthen its AML/CFT regime.

India Working on Crypto Regulation, Waiting on April Supreme Court Hearing

The Indian government has reportedly revealed that it is also working on a regulatory framework for cryptocurrency. It is discussing the matter with the Reserve Bank of India (RBI) for the central bank to regulate cryptocurrency. Crypto exchanges may come under the purview of the Securities and Exchange Board of India (SEBI). The government is waiting for the supreme court to hear a cryptocurrency case on April 27 before it makes the final decision on the cryptocurrency regulation. Recently, Minister of State for Finance and Corporate Affairs Anurag Thakur informed Lok Sabha, the lower house of India’s parliament, that the Ministry of Corporate Affairs had inspected some bitcoin businesses through the Registrar of Companies.

The central bank, however, is reportedly planning to file a review petition after the supreme court quashed its circular which banned regulated financial institutions from providing services to crypto businesses. The RBI is worried that the anonymous nature of cryptocurrencies may undermine the Indian banking system. After the historic ruling by the supreme court earlier this month, crypto exchanges started resuming INR services and several global companies have indicated that they are expanding into India and investing in local startups.

Venezuela Shuts Down Banking System, Residents Seek Refuge in Cryptocurrencies

Venezuela’s president, Nicolas Maduro, has shut down the nation’s banking system and ordered his entire country to self-quarantine, news.Bitcoin.com reported last week. The regulator Sudeban sent out a circular to all the financial institutions in the country on March 15, stating:

All activities involving direct attention to customers, users and the general public through agencies, branches, offices and administrative headquarters throughout the country will be indefinitely suspended.

The economic events in Venezuela have driven some residents to find refuge in cryptocurrencies and peer-to-peer markets.

Russian Central Bank Reaffirms Its Stance on Cryptocurrencies

Alexey Guznov, Director of the Legal Department of the Bank of Russia, provided an update on the bill for the regulation of cryptocurrencies in an interview with Interfax news agency, published on March 16. The bill on digital financial assets was adopted on first reading almost two years ago. Since then, its text has been modified and undergone significant changes.

“The position of the central bank remains unchanged,” Guznov said. “We believe that there are big risks in the legalization of cryptocurrency circulation, both from the point of view of financial stability and the system of combating money laundering, and from the point of view of protecting consumer rights .. We are opposed to the fact that there are institutions that organize the release of cryptocurrency and facilitate its circulation.” The director added, “But if a person who owns, conditionally, bitcoins, completes his transaction in a jurisdiction that does not prohibit this, we are unlikely to be able to limit it.”

The central bank has so far been skeptical about cryptocurrencies. Bank of Russia Governor Elvira Nabiullina has voiced her opinion several times that cryptocurrencies should not be legal in Russia. She also does not believe that Russia needs to have its own national digital currency.

What do you think of the regulatory developments covered in this roundup? Let us know in the comments section below.

The post Regulatory Roundup: Crypto Regulations Advance Despite Global Crisis, Cash Shortages, Bank Closures appeared first on Bitcoin News.

Liquid Gold vs Digital Gold: Why Bitcoin Beats Oil in the Current Climate

23/03/2020 by Idelto Editor

Extreme volatility. Sudden loss of value. A purported store of value. An economic hedge. An alternative to gold. On the face of it, bitcoin and oil have a lot in common. Both markets have been buffeted by the covid-19 economic downturn, but while bitcoin has stabilized, oil keeps plummeting. What does “digital gold” have that its liquid counterpart does not?

Also read: Can’t Lock Down Bitcoin: Trump Ponders Halting Stock Trading, Grounding US Passenger Flights

Oil Keeps on Slipping

The oil market has been buffeted by three calamities that have conspired to create a genuine black swan event:

Intense competition: From the relentlessly expanding U.S. shale industry to the endless oil wells of the Saudis, oil has never been more plentiful.
Falling demand: Even before the coronavirus kicked in, oil demand was dropping. The travel ban and global quarantine have severely exacerbated this.
Price warfare: Saudi Arabia and Russia have long colluded to maintain healthy oil prices. Then they fell out at the start of March and oil lost 30% in a day, with worse to come.

This latter incident has had a profound effect on oil’s downward trajectory. As energy expert Gregory Brew observes, “If it so desires, Saudi Arabia can rapidly increase production and flood the market on a scale that other producers cannot match.”

The TRC could step in to control runaway US production amidst a global economic depression and a persistent supply glut.

It’s 1931-1933 all over again https://t.co/5xGwFCMtZj

— Gregory Brew (@gbrew24) March 19, 2020

US Starts Stockpiling Oil

The U.S. Department of Energy has begun buying up cheap oil for its Strategic Petroleum Reserve, but is only able to physically add 2 million barrels a day, and in four months it will reach capacity. Texas, meanwhile, is considering halting oil production for the foreseeable future, with depressed prices making it impractical to sell the commodity at a loss. West Texas Intermediate (WTI) oil, the U.S. benchmark, is under $20, while Brent is trading for $27. There is likely more pain to come, with Paul Sankey, managing director at Mizuho Securities, telling Fox Business that “Oil prices can go negative.” By this, he means that the cost of extracting and storing it can exceed its market price.

Something similar can occur with bitcoin, when the cost of mining a coin exceeds its market value. In such cases, neither bitcoin or oil suffer from a “death spiral,” however, because there are always entities who can continue to extract it profitably, ensuring a constant supply is maintained. The world consumes 100 million barrels of oil a day and has the capacity to store 1.5 billion barrels. Once those reserves are full, if demand for oil hasn’t picked up, there will be no option but to wind down production in facilities that are operating at a loss.

Bitcoin and Oil: Commodities with a Lot in Common

The commodity that bitcoin is most frequently compared to is gold, yet it also bears a number of similarities with oil. Aside from the digital/physical duality, there are several ways in which bitcoin and oil overlap. Oil is prone to being hoarded by whales, who have the buying power to move the markets. And both assets have been hit hard in 2020, following long periods of stability in which they were assumed to maintain store of value qualities. In the last week, however, oil and bitcoin have diverged, with the former maintaining its downward trajectory, while BTC has regained ground.

Abundance vs Scarcity

Bitcoin is scarce. Oil is plentiful. Both resources will run out eventually, but circulating bitcoin can be reused i.e bought and sold on the open market, ensuring that everyone who wants it can acquire it. Only a fraction of all oil can be recycled, resulting in continuous extraction just to match ongoing demand. Saudi Arabia and Russia have an “abundance” of oil and can depress prices for as long as they like, should the pair remain locked in a price war. Bitcoin, on the other hand, is not so easily manipulated and certainly not for so long.

Regional vs Borderless

The extraction of oil is closely linked to key global regions; the Middle East, Russia, the North Sea, North and South America. Bitcoin, in comparison, is borderless. While its extraction can also be linked to certain hotspots – China, Iran, North America, Scandinavia – bitcoin can be mined anywhere. As such, it is less susceptible to geo-political conflicts, cartels, and price wars.

Compact vs Cumbersome

Just as bitcoin miners can hoard coins in the hope of selling them at a higher price in the future, oil producers can stockpile. The difficulty is that oil requires vast warehouses and tanks to store, whereas all of the bitcoin in existence can be stored on an SD card the size of your thumbnail. The only pipeline bitcoin needs to flow is the data pipes of the internet.

Bitcoin for Oil: The Ultimate Trade?

Bitcoin and oil have always inhabited separate domains. But what if the pair were to become trading partners, with bitcoin being used as settlement for oil? The notion isn’t as outlandish as it may seem. Venezuela’s launch of the petro digital currency was an attempt to move away from the petrodollar, and the hegemony it hands the U.S. The much-maligned petro has failed to gain traction, but bitcoin remains a tantalizing possibility for nations looking to avoid sullying their hands with USD.

Gabor Gurbacs, director of digital asset strategies at VanEck, believes that any country deeply invested in energy should be looking closely at bitcoin, saying: “While for now the petrodollar system remains dominant and the U.S. dollar outperforms other currencies, sovereign nations are increasingly searching for alternatives,” while acknowledging that because “bitcoin is a relatively young asset … it’s not a full-fledged store of value yet.”

Should a vacancy for a petrodollar replacement become available, bitcoin is ready to answer that call. In the meantime, it remains a safer haven than oil.

Do you think bitcoin is a better store of value than oil and other commodities at the moment? Let us know in the comments section below.

Images courtesy of Shutterstock and Mati Greenspan.

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