Travis Patron is the founder of Diginomics, a bitcoin news organization where professionals can enroll in the Bitcoin Economics Course. Here he explains why the stateless nature of bitcoin holds the potential to solve an age-old international monetary flaw.

Although the United States Federal Reserve Note carries with it many advantages for conducting commerce and serving as a world reserve currency, its makeup is not void of imperfections.

One of the main shortcomings of the US dollar is the Triffin dilemma, a problem which arises when countries must manage both short term domestic and long term international economic objectives.

Such a dilemma can lead to trade deficits when a country must also satisfy international demand of its currency.

Where the dollar falls victim to the Triffin dilemma, however, the stateless characteristics of bitcoin may hold promise to solve this international monetary flaw, and provide the backbone for a more interdependent global economy.

The economist Robert Triffin first brought to light an international monetary issue involving the nation holding reserve currency status and the impact such a role would have on domestic trade deficits.

Such a currency arrangement is usually cited to articulate the problems with the role of the dollar as the reserve currency under the Bretton Woods system.

The countries issuing a reserve currency, which foreign nations would wish to hold, must be willing to supply extra money stock to fulfill global demand. Such an arrangement would inevitably lead to operating a trade deficit.

In March of 2009, in the midst of the recent Great Recession, the People's Bank of China Governor Zhou Xiaochuan voiced his displeasure of the current makeup of the world reserve currency.

Known for his reformist tendencies, Xiaochuan made clear the need for creating "an international reserve currency that is disconnected from individual nations". Such an international reserve currency, he insisted, could provide stable value, rule-based issuance, and manageable supply necessary for achieving prolonged financial prosperity.

Zhou Xiaochuan's proposal went largely unheard, as economists were not clear if the International Monetary Fund's Special Drawing Rights (SDR) had the global adoption to overtake the dollar. No solutions have since been proposed.

Yet is it possible that such a "disconnected international reserve currency" has been in circulation since 2009? Is it possible that bitcoin could act as a domestically disconnected money supply and therefore solve the Triffin Dilemma?

The late mathematician John Nash, whom some believe to be a contributor to the invention of bitcoin, was also an advocate of monetary reform in order to solve the Triffin Dilemma.

The desirable goal, in Nash's mind, was to create an international reserve instrument capable of operating independent of individual nation states while remaining stable in the long run, severing deficiencies found in credit-based money.

Such a money supply would be able to provide a national savings outlet while operating in an autonomous, global manner. With an obsessive focus on cryptography and ideal money, the introduction of bitcoin is covered with the fingerprints of John Nash.

The Triffin Dilemma, where countries issuing reserve currencies attempt to simultaneously manage national savings levels with necessary international liquidity, continues to act as a barrier to economic growth. However, could it be that the introduction of bitcoin brings forth a viable solution to the Triffin Dilemma?

If we assume that the prerequisites for a currency capable of solving the Triffin dilemma were to provide the following, it may be possible to argue that bitcoin is the perfect fit.

1. Stable value
2. Rule-based issuance
3. Manageable supply schedule

In a recent analysis of the price volatility of bitcoin, Eli Dourado estimates that the stability of bitcoin could match that of the Euro within 15 years. Largely a product of an increasing number of active users, the Federal Reserve Board of Washington also estimates that the userbase of bitcoin is doubling roughly every eight months.

Rule-based issuance is perhaps the most interesting aspect of the bitcoin economy. Here, we have a paradigm shift in the management of monetary policy.

Where central banking and human decision making were the catalysts for monetary policy in the 20th century, that role is now filled by algorithmic time-bound issuance with cryptocurrency. A computerized function on the issuance of money has the potential to provide a sound basis for monetary policy because it is magnitudes more capable of adjusting to changing externalities, such as the bitcoin mining hash power index.

Finally, the supply schedule of bitcoin is relatively inelastic compared to traditional forms of money. We can predict with a high degree of accuracy the supply of bitcoin at any point in time (past & future) and make the necessary adjustments in domestic policy.

Peter Šurda, an economist from Vienna, Austria, argues that the inelastic supply function of bitcoin could result in a reduction of business cycles on a domestic level. This inelastic function of bitcoin's monetary supply could allow both domestic governments and businesses to forecast changes with a higher degree of accuracy, and therefore, could quite possibly mitigate the destructive nature of the business cycle.

Truly, as bitcoin gains new users in the form of individuals learning about cryptocurrency, transacting it, and crossing the psychological chasm of viewing it as a valid form of payment, it inches closer to its rightful place as a global reserve instrument. Such an instrument would hold tremendous potential to solve the age-old Triffin dilemma.

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