Of course we have to talk about Bitcoin – a debate contribution

As a Bitcoiner, you have to listen to a lot of things: „Bitcoin is bad for the environment“, „Bitcoin is the wet dream of darknet libertarians“, you know the drill. But Bitcoin is more than that. Bitcoin is too important to laugh it off as a passing phenomenon. A call for more honest debate.

Economists who have enjoyed a classical education find it difficult to talk about Bitcoin. They simply cannot fit the construct into the canon taught at universities. A good Bitcoin Up review example of the reticence with which economists approach the topic is Adam Tooze. The British economic historian was a guest on „Wirtschaft aktuell“, a podcast series by rbb, on 3 March. Although Tooze doesn’t like to talk about Bitcoin, as he makes clear in the latest issue of his column Chartbook Newsletter, he has let himself be talked into it.

No, bitcoin is not a „corona-induced phenomenon“

„Conservative investors who are very concerned about inflation are looking for alternatives,“ Tooze tells the public broadcaster. So far, so true. Bitcoiners, in fact, see digital gold as a kind of hedge against the vagaries of central bank policy. For while central bankers are allowed to expand the money supply as they please, Bitcoin’s supply is limited and algorithmically fixed. However, the editor’s conclusion that Bitcoin is a „corona-induced phenomenon“ is wrong.

How could it be explained that the No. 1 cryptocurrency had already grown by several million percent by the end of 2019? Until now, Corona has not been an issue.

The Tooze article on Bitcoin is also worth reading insofar as it argues quite cogently. But the view is only half the truth. Time for the opposing side.

Among other things, the column states that „all money […] has fiat elements in it“. Bitcoiners would not disagree. In fact, money, just like all other goods, commodities and services in this universe, has no intrinsic value – that concept does not exist at all. People ascribe value to goods. But contrary to what is often argued, this value is not purely arbitrary and speculative, but has tangible reasons. Bitcoin simply has certain properties that make it good money (scarcity, divisibility, transferability, durability, et cetera). In essence, Bitcoin and fiat money are not that different; Tooze sees it similarly.