In a newly-published interview with Fortune’s Tory Newmyer, Rand Paul (R-Kentucky) says that there’s a key element missing from bitcoin: the fact that it isn’t backed by something else that holds value.
In this particular case, Paul — the son of Ron Paul — thinks bitcoin should be backed by stocks. Here’s what he said when Newmyer asked him whether or not his campaign was looking into accepting contributions in the form of the digital currency:
[blockquote style=”2″]And actually my theory, if I were setting it up, I’d make it exchangeable for stock. And then it’d have real value. And I’d have it pegged, and I’d have a basket of 10 big retailers. Because I read [Marc] Andreessen’s article a couple months ago. What fascinated me about it was those 2 to 3% margins. If you multiply that out for all of Wal-Mart and they don’t have to use Visa anymore, I’m guessing the people who have to be worried here are Visa and MasterCard. I think it would work, but I think, because I’m sort of a believer in currency having value, if you’re going to create a currency, have it backed up by — you know, Hayek used to talk about a basket of commodities? You could have a basket of stocks, and have some exchangeability, because it’s hard for people like me who are a bit tangible. But you could have an average of stocks, I’m wondering if that’s the next permutation.[/blockquote]
Paul likes the idea of bitcoin in principal, which is no surprise as he follows the Austrian school of economic thought.
But could Paul’s plan be one worth looking into? Many in the community would argue that bitcoin, in its current form, is just fine.
What do you think about Rand Paul’s thoughts on the matter? Does he make a point at all or do you think it’s nonsense?