Not just the dollar, but quite possibly national currencies as effective instruments of policy. This is what I would describe as an "all that is solid melts into air" moment. I imagine that most people on hearing about this think either that its a crackpot scheme or if they are willing to contemplate that its not then they think its simply beyond their own understanding. I'm not personally qualified to comment on the soundness of the underlying code and algorithms, but the concept seems clear enough and even if bitcoin itself proves fatally flawed in one or another respect its hard to imagine something like it not eventually succeeding and it having some significant consequences.

The status of the dollar today (like the British pound before) as the international reserve currency is an incredibly powerful instrument of US imperial policy. While there has been lots of speculation about its eventual displacement, the obstacles to such a displacement are significant. Not least the reluctance of those (like China) who hold large amounts of dollar-denominated T bills to see their holdings massively devalued. Bitcoin opens the possibility of that whole system being radically undermined.

The incentives for using bitcoin or something like it are huge for all sorts of actors. Not just obvious ones like international criminal enterprises, but also multinational banks and corporations and even small states. Presumably huge numbers of folks are watching from the sidelines to see how robust the particulars are. Bitcoin took two big hits recently - a theft of roughy $500,000 worth of bitcoins and a hack on the main online bitcoin market. While bitcoins have not entirely regained their peak value of $30 each, they have recovered some of those losses and are still trading at $17.50, well above their pre-June peak of roughly $9.

The emergence of phenomena like this will likely only contribute further to the overall volatility of the international financial system while undercutting the power of state actors to effectively manage it. Understanding how international currency markets, and other elements of the world financial system, work is not simple. But neither is it impossible. Too many revolutionaries are content to let others do their thinking for them when it comes to matters of political-economy and that leaves us disarmed when confronted with new and unfamiliar phenomena like this. We need to raise the general political economic literacy of the revolutionary movement if it is going to fight effectively on a terrain which is so powerfully shaped and reshaped by forces the nature of which resists comprehension.