How Should We View Cryptocurrencies?

[Cryptocurrency Roundtable]

How Should We View Cryptocurrency?

Moderator: Sung-no Choi (Vice President, Center for Free Enterprise (CFE))

Discussant: Jaewook Ahn (Professor, Kyung Hee University)

Discussant: Yiseok Kim (Director, Market Economy Research Institute)

Q: Cryptocurrencies using blockchain technology are at the center of controversy. The very term “cryptocurrency” already contains the word “currency.” Some believe they can be recognized as a form of money with characteristics different from fiat currency, while others argue they cannot be regarded as money at all. What is your position?

Q: Compared with money based on gold or goods, and money that depends on the government’s power to issue currency, cryptocurrencies seem to have both relative strengths and limitations. Cryptocurrencies exist on the basis of blockchain technology. How do they differ from existing forms of money?

Q: In the mining process, cryptocurrencies raise the issue of decentralization. Fiat currency creates inflation problems through seigniorage because the government monopolizes the power to issue money. By contrast, cryptocurrencies have decentralization as an essential core characteristic. However, many cryptocurrencies are also showing concentration in mining and ownership. What does decentralization mean in the context of money?

Q: Liberal thinkers, including Mises, have long engaged in extensive discussion about money. In particular, cryptocurrencies are often assessed as a form of money that most faithfully reflects the ideas of liberals. They are receiving special attention because they may avoid the inflation trap inherent in fiat currency. What attributes of cryptocurrencies align especially well with liberal thought?

Q: Following Bitcoin and Ethereum, cryptocurrencies are evolving in a variety of ways. They seem likely to develop gradually into forms more faithful to the role of money. What needs to be improved and developed for them to become a currency used by many people?

Q: China has at one point imposed regulations on cryptocurrencies by shutting down exchanges and banning mining. The South Korean government has also regulated banks’ virtual accounts used to access exchanges. At the same time, some countries are creating legal foundations for the development of cryptocurrencies and incorporating them into the exchange system. What kind of institutional approach is needed for cryptocurrencies?

Q: Governments around the world are showing signs of trying to impose taxes on cryptocurrencies. Depending on how cryptocurrencies are defined, they may or may not be subject to taxation. Is it necessary to impose taxes on cryptocurrencies?

Q: Much has changed in the internet era, and just as smartphones transformed many things after 2010, blockchain-based cryptocurrencies are likely to bring about major changes in the future. In what areas will these changes produce major benefits for consumers and transform the world?

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Original title: 암호화폐를 어떻게 볼 것인가?

Author: Center for Free Enterprise (CFE)

Date: 2018-02-05

Source: https://www.cfe.org/bbs/bbsDetail.php?cid=seminar&pn=7&idx=22914