So, here’s an idea: If the U.S. Government got into the cryptocurrency game, there might be a way for everyone to get something they want. A government-distributed coin could create wealth for America, by leveraging America as a dominant player in the cryptocurrency game. Or so goes the theory proposed in a blog post by Silicon Valley investor and OpenAI co-chairman Sam Altman.
Sure, the libertarians who flocked to cryptocurrency to avoid governmental oversight might whine for a while, but with more regulations likely to appear over cryptocurrencies and Blockchain technology down the road anyway, getting the government involved in a mutually-beneficial arrangement is far better than regulating decentralized currencies into irrelevance.
Altman’s idea envisions a system where every American, perhaps based on social security numbers, is given a set number of digital coins, which the government would be unable to inflate or otherwise tamper with. But while this could be great for people already familiar with cryptocurrencies, it’s unlikely to scale and be relevant to the entire country, and especially not Altman’s vision of a potential global currency.
Creating a virtual currency and embracing crypto wallets could be a good move for America on a practical level, too — the Federal Reserve allocated over $860M to create paper money in 2018, and that doesn’t even account for how much it costs to create coins, or the money lost because of (or spent enforcing actions against) counterfeit dollars and coins.
But, a few catches, here: One in four Americans still don’t have a smartphone, according to the Pew Research Center. And only 70 percent of Americans have access to broadband. And it’s unlikely that a national cryptocurrency would be able to take off until everyone has cheap and reliable access to both. And that might take other solutions to the vast wealth inequality gap among Americans that a national digital currency was supposed to fix in the first place.
One can already imagine the predatory daytime TV commercials where brokers in big Uncle Sam hats offer to buy hurting peoples’ Americoin in exchange for fast cash. And just like that, the people who would benefit the most from a redistribution of America’s wealth are once more shit out of luck.
These problems don’t mean that a nationally-endorsed cryptocurrency could never work — down the road, it might be a valuable and worthwhile investment for the federal government. But right now, there are too many hurdles in the way of anything like it helping anyone but the people who already have the expertise and capital to invest.