The GDP of countries and their relationship with cryptocurrencies

In the 18th century, there was a huge debate among nations about how to compare them beyond military powers. During much of the Middle Ages and in the transition period between the Middle Ages and the Industrial Revolution, the power of a country was measured by its military capacity, both in relation to the forces themselves, as well as the entire logistical chain to place the machine. warfare in operation.Therefore, even the navies were considered key elements of this accounting. And this since the Greek era.However, as was seen between the 14th and 17th centuries, a large or powerful armed force can be destroyed by a storm. The best example is the invincible fleet of Dom Felipe of Spain being destroyed by storms near the English islands. Or the skirmishes between France and England which, in practice, ended in a draw.With the economic theories of the eighteenth century, clearer notions were obtained about productive aspects, about the capacity to generate wealth and to maintain these forces. That is, the beginning of economic control was the need to balance civilian government spending with military government spending. This process, or lack of it, is evident in the culmination of the French Revolution, where one of the main causes is the exhaustion of finances due to war losses.With that comes the concept of GDP: gross domestic product. In short, it is the internal wealth of nations, not the total wealth, but the monetary circulation of goods and services, that is, it is a relative value, not an absolute value, so placed by Adam Smith.GDP measures only final goods and services to avoid double counting. For example, if a country produces $100 of wheat, $200 of wheat flour, and $300 of bread, for example, its GDP will be R$300, as the values ??for flour and wheat are already embedded in the value for bread.The final goods and services that make up GDP are measured in the price at which they reach the consumer. In this way, they also take into account taxes on products sold.However, GDP is not the total wealth existing in a country. Apparently the GDP gives the feeling that it would be a stock of value that exists in the economy, as a kind of national treasure.In reality, GDP is an indicator of the flow of new final goods and services produced over a period. If a country does not produce anything in a year, its GDP will be nil.GDP is a measure of production flow - production per unit of time (year). Therefore, it does not consider capital stocks (economy), which ultimately are important determinant components of production flows, such as social capital, human capital, natural capital, level of institutional efficiency.In modern economic theory, GDP per capita is seen as an indicator, consolidating the notion that citizens would benefit from an increase in their country's aggregate production, also consonant with Adam Smith's idea of ??welfare.In parallel with the relative concept of national GDP, GDP per capita is not a measure of personal income.However, GDP can increase as the majority of the citizens of a country become poorer, or proportionately not so rich, as GDP does not take into account the level of income inequality in a society.- Factors not considered in GDP:Also, social or external issues that would affect the economy are not taken into account in the GDP. It does not take into account differences in income distribution between poor and rich. However, several economists stress the importance of considering inequality in long-term economic and social development.    Also conflicting with a basic law of economics, the law of competition, two goods that have different qualities, but are sold at the same price, will have the value registered by the GDP, in value, as being the same.This leads to distortions in the perception of well-being, for example, if a city produces great quality cakes for the same price as bad cakes in the city next door, the GDP calculated for both will be the same, however, the quality of life and consumption will be different between them.It ignores the presence of externalities, that is, any discussion that is much more qualitative than quantitative regarding the generation of production (effects not accounted for by the market). In the current global discussion, for example, a country that cuts and sells all its trees will have an increase in its GDP, even if the social effects are negative due to pollution, loss of biodiversity, leisure area. That's why the creation of carbon credits as a way to introduce these actions in a quantitative way, to show the economic impact on the social.He points to variations that can come from momentary economic fluctuations, such as speculative attacks, growth bubbles, discovery of deposits of natural resources. There is no guarantee that growth will be maintained or distributed by society.    Mainly, and at this point the focus on cryptocurrencies comes in, GDP excludes productive activities that do not take place within the market, such as unpaid voluntary services or freely accessible products and services exchanged over the internet.One of the problems discussed about cryptocurrencies is transnationality: how to account for the gains, or financial movements, of cryptocurrencies: would it go to the government of the citizen who moved them? for whom did you receive it? Who won?What socio-economic-social impacts would this financial flow cause on GDP?From an actual financial point of view, many transactions carried out in other countries are considered to be foreign exchange evasion. That's why many countries have restricted Binance's activities, for example.Current bodies cannot, in fact, track the flow of cryptocurrencies due to an intrinsic characteristic: normally the financial analysis of a citizen is carried out, simply, by the difference between income input and income output. If it is positive, the citizen has the difference in money in an account, if it is negative, the citizen owes this difference to some financial agency.But, when dealing with cryptocurrencies, the citizen puts money in limbo.....and the money either comes back multiplied from limbo, without capital-generating factor, or comes back without money and with more debt.Thinking this in thousands of citizens, would lead to inefficiency in counting wealth and flow of capital, goods and services.This is the current discussion, just as back in the 18th century there was a discussion about the power of armies.But now the discussion is about the power of the financial market, alias, of the world financial system in the face of new technologies.Hence the justification for the creation of national cryptocurrencies: to tie the citizen, once again, to the current system.It's not a matter of conspiracy, after all, it's a matter of survival or adaptation of an entire system that has more than 10,000 years of commercial support.This is the real impact of cryptocurrencies in the medium term in the world.