SEN. RAND PAUL INTERESTED IN, CONFUSED ABOUT BITCOIN

Fortune magazine published an interview with Kentucky Senator Rand Paul yesterday that touched on the senator’s thoughts regarding Silicon Valley and Bitcoin.

The Bitcoin discussion came toward the end of the interview, and it was enlightening for two reasons. One, the senator appears relatively enthusiastic about Bitcoin as a currency. The senator also fails to grasp exactly how Bitcoin the protocol works.

From the piece:

[I]f I were setting it [Bitcoin] 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.

There is nothing in Sen. Paul’s comments that indicate his views from a policy perspective on Bitcoin, or whether he even feels cryptocurrencies require a policy at all.

Still, his apparent interest in digital currencies, coupled with his history of backing an individual’s digital privacy, might be of interest to cryptocurrency users who are also American voters.

Sen. Paul has also been penciled in by many as a serious contender for the Republican party’s nomination for its 2016 presidential candidacy. FiveThirtyEight.com put Sen. Paul as the fourth most popular candidate in March, based on early 2014 polling numbers, in a tight GOP field.

Sen. Paul’s poll position is certain to change between now and November 2016, but this interview does suggest the very real possibility that a contender for the White House in 2016 could be a cryptocurrency sympathizer if not an outright proponent.