Alex Millar is a candidate for parliament in Vancouver East.

The value of money is based on confidence. And confidence is a function of network size.

Of course, US dollars have a huge network. They’re accepted by merchants around the world, and featured in the biggest Hollywood movies. The dollar’s network instills confidence… and confidence creates demand. Demand leads to higher value, and higher value increases demand. It’s a positive feedback loop that grows stronger over time.

This makes Americans fortunate. Their central banks can create new money, for free, without devaluing their dollar.

By contrast, more obscure moneys are no good outside their country of origin. Good luck spending a Malaysian Ringgit outside Malaysia, or a Ghanian Cedi outside of Ghana. Small countries can’t create much new money without suffering devaluation, which is what happened in Zimbabwe, Ecuador, Venezuela, Argentina, and other countries.

As of 2000, twenty-nine countries have lost so much confidence (and value) in their money that they have simply surrendered their ability to create money; they have adopted the US dollar as their national currency.

It’s depressing. Not only can big countries, such as the USA and China, and currency unions such as the Eurozone, create money for free, but they can use that money to buy the resources of smaller countries. Canada’s natural resources such as land, water, fish, wood, and oil are being bought by American conglomerates. Vancouver houses are being bought by Chinese Yuan. And our best talent is being hired by foreign companies.

Putting an extra tax on foreign buyers of Vancouver real estate is like putting a band-aid on a geyser.

The world’s state of money is unfair. It’s increasing inequality between nations. This, in turn, is one of the root causes of the current migrant crisis (along with war and climate change.) People want to live in rich nations.

As Canadians, we are lucky. We live in the world’s 11th largest economy. But still, we are fighting a losing battle. The positive feedback loop enjoyed by big networks indicate that it is very likely there will be one dominant currency in the future, and it is not going to be the loonie.

Something needs to be done to tackle the root of the problem.

Currently, the US dollar is the front-runner. But despite its huge network advantage, has been outperformed in six of the last seven years by bitcoin: the first decentralized digital money.

Price of One Bitcoin in US dollars (Log Scale)

This is good news. The emergence of a money that is not controlled by one country means anybody can contribute to restoring equality between nations, to reducing the flow of resources from poor to rich nations, and to calming the migrant crisis. It even means that countries can better tackle international problems by creating contracts in a neutral currency.

And it means that anyone can be part of the solution. It’s as easy as exchanging government money for bitcoin.

Bitcoin is less than seven years old. It is accepted in few places and its value is volatile. I’m running for parliament in Vancouver East to legitimize bitcoin. I will draft a law that allows Canadians to pay taxes in either dollars or bitcoin.

On October 19th, vote for D Alex Millar