IMF Chief: ‘Massive Disruption’ from Cryptocurrencies Will Give Fiat Currency a ‘Run for Its Money’

Cryptocurrency sentiment is running scared, which from a contrarian perspective is more bullish than most suspect. Google searches for Bitcoin information have hit the highest level in the past six months.

That’s an indication that the lower prices are now sparking renewed interest in Bitcoin.

It’s still questionable whether or not we’ve seen a final low for this year’s pullback but we’re likely very close now.

This has been a year when most cryptocurrency coins and people have been beaten down.

But that hasn’t prevented Patrick Byrne, the CEO of Overstock, from announcing a major change for his company. He intends to sell off his online retail business and go 100% crypto by investing in tZero and other blockchain-oriented startups.

Byrne’s crypto opinion is strong. He recently stated that the current financial system is a “big Keynesian magic money tree Ponzi scheme.”

His company has been accepting Bitcoin and many other coins for payment and he has vowed to invest 50% of the company’s profits in cryptocurrencies.

The significant drop in prices this year it has made it less profitable for miners. But lower prices has created more incentives to find ways to decrease the cost of mining.

A lot of the worry about crypto mining operations is the amount of power used and how it could negatively affect the environment.

As the market usually does, it’s solving the problem on its own without government interference.

The first thing that’s been happening is that less profitable miners have been closing their doors. Many simply can’t afford to continue mining at a loss.

But this has concentrated mining operations in China, which were already a concern for many.

In search of cheaper power, we’re seeing a growing business in renewable energy sources to support crypto mining. And these operations are around the world. Iceland has its thermal energy sources.

Now Paraguay is working to entice the development of the largest Bitcoin mining operation in the world.

Paraguay, which is squeezed between Argentina to its south and Bolivia and Brazil to its north, produces all of its electricity requirements from hydroelectric dams.

It produces so much that it sells 80% of its total capacity to its neighbors.

Paraguay is now offering significantly lower electricity prices and abundant land to help Blockchain Technology Foundation, referred to as Commons Foundation, relocate from South Korea.

Paraguay’s plan is to launch its “Golden Goose” project and create the largest cryptocurrency mining outfit in the world. It intends to offer electricity rates that will be 80% cheaper than what Commons Foundation is paying in South Korea.

Even during a crushing bear market we continue to see these kinds of structural developments that will make Bitcoin and other cryptocurrencies stronger in the long run.

The market is addressing environmental concerns at the same time by improving their efficiencies and driving costs lower.

The concerns about concentrated mining power in China, and the reliability of its government, are being mitigated. Global cryptocurrency mining operations are making it more difficult for any government to shut it down.

The structural integrity of cryptocurrencies is getting stronger and globally more diverse. This year’s bear market has been a time of building and preparing for the next cyclical bull market.

What’s interesting about Paraguay’s efforts is that they intend to fund the development of their Golden Goose project using the ICO model. They will call it an “initial exchange offering” and token holders are promised 30% of mining profits and 70% of exchange profits.

These profits will be paid in MicroBitcoin (MBC).

MBC is valued at $0.00023 per coin and currently trades but its market cap positions it at 1808 out of 2075 coins. MBC is not a coin I would recommend at this time.

However, it is one that I will be watching over time, especially as news develops.

Paraguay’s government is even thinking about changing its constitution to change the tax treatment of cryptocurrencies. This is significant since it would recognize the existence and legal status of cryptocurrencies.

So the Golden Goose project is fascinating on a few different levels, all of which are positive for cryptocurrencies.

Bitcoin and other cryptocurrencies have now become enough of a threat to central bankers to get them reacting. The International Monetary Fund (IMF) is considered the central bank for central banks and it is leading the effort to create its own digital currency.

Christine Lagarde, the IMF’s current managing director, now warns other central bank leaders that she thinks “we are about to see massive disruptions” from cryptocurrencies. She recently said cryptocurrencies may give traditional currencies “a run for their money.”

Lagarde, and many other central bank leaders, thus are considering creating their own cryptocurrencies as a way to maintain control over the use of digital currencies.

Central bankers around the world are attempting to get people into digital currencies and get rid of cash.

If you can’t beat ’em

Conspiracy theorists see an evil intent here, since it would place all of our financial records (income, spending, taxes, etc.) at the government’s disposal. At the very least we would certainly lose our financial privacy.

Crypto hodlers believe Bitcoin and privacy coins (Zcash, Dash, Monero, Verge) will only get stronger in response to central banks’ effort to take over our financial lives. It will be interesting to see how this all plays out in the near future.

One of the other interesting developments with the IMF and central banks’ efforts to create their own cryptocurrency regimes is that it completely destroys one of their key arguments against crypto.

One of the strong arguments against cryptocurrencies is that they enable unlawful use by the black market, drug cartels, and terrorists.

Arguments against cryptocurrencies have become harder to defend and now central bankers are feeling threatened. They’re figuring out that “if you can’t beat ‘em, join ‘em.”

It’s a strong endorsement for both blockchain technology and cryptocurrencies themselves. But you can bet that people such as Nouriel Roubini (aka, Dr. Doom) will continue to disparage their use.

Crypto adoption continues though. Ohio legitimized the use of cryptocurrencies by allowing companies to pay their taxes in Bitcoin. Arizona, Georgia, and Illinois are considering similar proposals.

Ohio’s next step will be to allow citizens to pay their taxes with Bitcoin.

Step by step, we’re seeing the legitimization of Bitcoin and the continued development of the technology and infrastructure.

Click HERE for more cryptocurrency analysis from Keene Little, editor of Crypto Wealth Protocol…