This week is all about cryptocurrencies. In the US, crypto platform Coinbase is listing. Bitcoin is hitting regular new highs (around $64,000 now) as is ether (up 6% on Wednesday alone). And the idea that these new currencies are here to stay is gaining ground. They might be. But before you rush out to buy too much of them (John and I both have smallish holdings – we like to hedge our opinions) bear in mind that while the tech behind digital currencies is new, the existence of private currencies operating parallel to those issued by national authorities is not.
Take the tokens that circulated in 17th century London. Post-civil war – and the removal of the Royal Prerogative to mint base-metal coins – there was a shortage of state-issued small-denomination coinage available (not good for trade!). Market forces stepped in (of course!). Shopkeepers and innkeepers commissioned “moneyers” to produce personalised coins, then used these to issue change. By 1672 some 4,000 separate coins were thought to have been struck and passed around in London. They worked: as long as all merchants trusted that the merchant named on the coin was good to eventually redeem the coin for goods, that it was not state issued was not a problem. Unless, of course, you were the king, Charles II: he reckoned that private currencies took a bite out his “royal authority” and banned the lot. You may think this quaint little story of pewter tokens representing the odd half pint of beer has no bearing on your bitcoin holding. You may be right. But if you think of a cryptocurrency as a representation of value that skips a state-sponsored middle man, that can be produced by anyone and – if it has the trust of a critical mass of people – that can be used for trade by anyone, what is the real difference? Perhaps it’s just the fact that not all modern authorities are quite as confident in their power as Charles II. Yet.
For more on how money might evolve in a world where we attribute purchasing power to computer code, see China’s new digital currency. China’s government has a bit more of the Charles about it than most of the West: it might be first to suggest that its citizens should use the state-sponsored centralised digital yuan over any decentralised cryptos.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
On to a genuine modern development. I’m slightly nervous of the alternative meat sector (I worry about the health impacts of highly-processed “plant-based” meats) but in this week's magazine Jim Mellon and Anthony Chow make a compelling case for “cellular agriculture” as the best hope for the future of food – and, crucially, for animal welfare.
As podcast guest Peter Spiller of the Capital Gearing Trust tells me this week, when money supply is growing fast and people are confident, risk asset prices mostly rise (short term at least). But we still reckon that with prices where they are, if you are buying you are better to buy at the less costly end of the market – perhaps stick with the UK (only Italy and South Korea are cheaper). Finally, as we move into the part of the pandemic when we start to get a sense of who are the lockdown wrecked and who are the lockdown winners, it’s worth remembering who’s done best this year – American CEOs. Their average pay is up by a million bucks-odd a head and they seem to have spent even more time than usual going on holiday by private jet. Nice work if you can get it.
-
8 of the best properties for sale with equestrian facilitiesThe best properties for sale with equestrian facilities – from a Georgian manor in Ceredigion, Wales, to a period farmhouse with an equine swimming pool in Banbury, Oxfordshire
-
Energy bills to rise by 1.2% in January 2025Energy bills are set to rise 1.2% in the New Year when the latest energy price cap comes into play, Ofgem has confirmed
-
Should you invest in Trainline?Ticket seller Trainline offers a useful service – and good prospects for investors
-
Investing in a dangerous world: key takeaways from the MoneyWeek SummitIf you couldn’t get a ticket to MoneyWeek’s summit, here’s an overview of what you missed
-
DCC: a top-notch company going cheapDCC has a stellar long-term record and promising prospects. It has been unfairly marked down
-
How investors can use options to navigate a turbulent worldExplainer Options can be a useful solution for investors to protect and grow their wealth in volatile times.
-
Invest in Hilton Foods: a tasty UK food supplierHilton Foods is a keenly priced opportunity in an unglamorous sector
-
HSBC stocks jump – is its cost-cutting plan already paying off?HSBC's reorganisation has left questions unanswered, but otherwise the banking sector is in robust health
-
Will bitcoin be banned?Bitcoin is often touted as a hedge against inflation, but it's a threat to the whole scammy system
-
Lock in an 11% yield with SabreTips Sabre, a best-in-class company is undervalued due to low profits in the motor insurance industry. Should you invest?
