Monitor | The fatal flaw with internet currency

Ever since the outbreak of the financial crisis in 2008, discontents have been searching for an alternative to the current international monetary system, with its reliance on the US dollar.

Some have fixed on the yuan as a substitute for the greenback. Yet, although China's leaders like the idea in principle, in practice they have been cautious about allowing greater international use of their currency.

In any case, to hard-core critics of the existing financial architecture, the yuan suffers from just the same disadvantages as the US dollar.

As they see it, the problem with conventional currencies, like the US dollar or the yuan, is that they are issued by governments. And with control of the printing presses, indebted governments, they argue, will never be able to resist the temptation to print as much money as it takes to pay off their debts, debasing their currencies and destroying the purchasing power of their citizens' savings.

This libertarian fringe longs for a currency independent of governments, whose supply cannot be debauched by central banks, and which trades outside the normal banking system.

Some believe gold is the answer. But gold can get stolen, which means it has to be stored in a secure vault. And that means governments in financial trouble can always seize their citizens' holdings, just as US president Franklin Roosevelt did in 1933. As a result, enthusiasts have identified another possible replacement for the US dollar: the Bitcoin.