The government of Iceland does not have the necessary skills to manage its own currency.
It should ditch the Icelandic krona and adopt Bitcoin, a nascent virtual currency that so far looks like the preserve of speculators, internet geeks, money launderers and illicit online gamblers.
That was the incendiary view being championed by an angel investor called Sveinn Valfells last week, as investors, computer programmers and users of the online currency gathered at Canary Wharf to attend the Bitcoin London conference. Despite the unorthodoxy of Valfells' points, he was actually making his argument from a position of some kind of strength in that he is a) Icelandic, and b) comes from a family with a history of running unofficial currencies.
"My grandfather co-founded a construction company in 1947 called Steypustodin – "the ready-mix factory" – and my father and his cousins were running the company in the 1970s and 1980s, a time of double-digit, and then triple-digit, inflation," he said. "In Iceland, people liked to build their own houses at the time, but they couldn't put the money they were saving to build their homes into the bank, because it disappeared. Somebody had the idea to buy certificates in building materials in advance, and those certificates were denominated in cubic metres of concrete.
"It became very popular on payday, and our company would issue the certificates. One day the company got a call from the inland revenue asking if we had issued these vouchers. We confirmed it, but asked why they wanted to know. The official said somebody was trying to use the vouchers to pay his taxes."
That the Icelandic revenue eventually accepted the vouchers shows, Valfells argued, that there are moments in history when people are keen to try out innovative alternative currencies.
This fascinating view was aired during a week in which the Bitcoin currency started to attract more mainstream publicity, with support from a pair of high- profile backers.
Tyler and Cameron Winklevoss, the former Olympic rowing twins who famously alleged that Facebook founder Mark Zuckerberg stole their website idea, revealed plans to float an investment fund based on the digital currency. Winklevoss Bitcoin Trust would, they said, initially sell $20m of shares, with each share worth a fraction of a Bitcoin. The shares are aimed at investors looking for a "cost-effective and convenient means to gain exposure to Bitcoins", according to a filing with US regulator, the Securities and Exchange Commission.
The twins' move comes after plenty of people have made (and lost) virtual Bitcoin fortunes in an extremely volatile market. The value of a Bitcoin at the start of 2013 was $13; it rose to a peak of $266 in April before slipping back to below $80 last week.
City sources say major financial institutions have started hiring researchers to analyse the market, the theory being that if the price rises above $400, Bitcoins will have become valuable enough for them to plough money into. Others, however, feel that will create an even bigger bubble, and potentially undermine the embryo of a decent idea.
Professor Jon Rushman, of Warwick Business School, says: "It is not going to help Bitcoin's quest for respectability to have associations with such thoroughbred vulture capitalists [as the Winklevoss twins]. The less people think of Bitcoin as a 'get rich quick' investment, the better its chances of survival. It needs publicity for its qualities as a neutral and universally accessible currency with a transparent exchange rate and immunity from central bank manipulation."
Certainly, Bitcoin's future as a serious currency was of more interest to the techies at last Tuesday's conference, albeit as part of a series of presentations that made the whole scheme feel like it is still an academic debating point. So what is the fuss about?
Bitcoins are a form of electronic money that was created by an unknown developer (or developers) in 2008 as a peer-to-peer currency, traded through online exchanges. They are not managed or traded by any company or government, and their release is tightly controlled by software running a set of algorithms. You can currently spend them only with niche merchants online, but there are obvious potential benefits in using Bitcoins for international transactions. Supporters also argue that they're a safer solution for online shopping, being cheaper and less open to fraud than credit cards.
But if you asked delegates at last week's conference why you might want to use Bitcoins instead of pounds, euros or dollars, the only convincing reason they can provide is that the anonymity the currency provides makes it easier to launder money, buy illegal drugs, and consume hardcore porn (or indulge in a combination of all three).
"They are very nerdy products," said Michael Jackson, a former chief operating officer of internet communications firm Skype and now a partner at Mangrove Capital Partners. "It is difficult to do this stuff unless you have a degree in computer science. That's no good. We have not seen anything interesting [to invest in involving Bitcoin]."
Jackson's views were largely echoed by other technology investors at the conference. Stefan Glänzer, who co-founded online auction site Ricardo and, more recently, Passion Capital, admitted he had yet to buy his first Bitcoin.
Had attending the Bitcoin conference persuaded him to make a purchase? "First, I have to understand exactly what you have to do before you buy one."
Taavet Hinrikus, another former Skype executive and the founder of online currency exchange Transferwise (which does not deal in Bitcoin) was more positive. "For the average person, there is no reason to have a Bitcoin," he said. "But most people tend to moan about their experience of the payments industry: if this brings about change, that would be awesome. Bitcoin may not survive, but it could be like [early online music service] Napster in that it highlights problems, then something else comes along. In music, now we have Spotify."
So maybe Valfells is right and there will be serious virtual currencies operating in the future. And maybe one of them will be Bitcoin. Or maybe not. After all, those 1980s concrete certificates are not as popular as they once were.
guardian.co.uk © Guardian News and Media Limited 2010
image: © Zach Copley