Economist Rebuttal Part I
I used to read The Economist religiously when younger but I gave it up. I don’t know if it was the dogma or pontification, but I felt someday I’d read of the Editor-in-Chief “On the third day He rose again”.
Like the Prodigal Son, I took a long “Economist” sabbatical. I’m still AWOL.
My State Department cousin – now on his third tour in Africa – is positively on the fence about cryptos. He asks me about the terrorist money behind BTC. I gently remind him the US dollar is the filthiest currency on the planet; he acquiesces.
The diplomat sends me an Economist essay entitled: “Show Me the Money – Bitcoin & Other Cryptocurrencies are Useless; For Blockchains, the Jury is Still Out”.
He’s seeking my rebuttal.
Let’s tackle this in reverse chronological order. Bear in mind this is the same “newspaper” that called for $10 crude oil – before it subsequently years later traded $145.
First fallacy: “The Jury is Still Out”. Hogwash. Every Fortune 500 company is grappling with blockchain. Look no further than ICE’s Bakkt deal with Microsoft, Starbucks, Boston Consulting, Susquehanna.
Blockchain, still in its infancy, is here forever; it’s the third leg in the “information troika”: printing press, Internet, blockchain.
Blockchain ain’t going away in my lifetime or yours. Print it.
The Economist Rebuttal Part II
Fallacy II: “Bitcoin is Useless”.
Disagree. A Bitcoin is worth $6,305.74 less commissions.
An asset is worth what a buyer & seller agree it is worth. Not a penny more or less. In this regard, it matters not what economists, speculators, or regulators proclaim. Bitcoin has value, and that value is transparent & transferable. Tomorrow BTC may be worth more or less. Just like your house, an ounce of gold, or a share of Apple stock.
Look at the Venezuelan bolivar, Turkish lira, Zimbabwean dollar: are these stores of value? I think not.
People who live in countries with massive corruption, weak economies, and rudderless politicians, are clamoring for currency alternatives. Indeed, many central banks in the developing world are buying BTC as a hedge against their own currencies & balance sheets. Bitcoin is already a global currency & it cannot be gamed by elected officials with private agendas. This is blessing not a curse.
Adoption is moving slowly as regulators can’t confirm or deny their objective. Change won’t wait on bureaucrats. Adoption will accelerate & that is more important than price. Bitcoin, like blockchain, is here to stay.
The Economist, like the pugnacious Nouriel Roubini, is wrong. The earth is not flat; nor is Bitcoin a mere fad.
The Economist Rebuttal Part III
The Economist takedown of blockchain, BTC & alt-coins hinges on the argument many cryptos are a joke – and this is the strongest aspect of their critique.
The Economist is spot on in their assessment that besides BTC, there are too many over-hyped, under-developed projects, too many scams & rules violations, and more problems than solutions in the global alt-coin ecosystem.
I won’t challenge this verdict because – tough as it is – I agree with their scathing analysis in this regard.
My biggest complaints about alt-coins are two-fold: one, you have to show how you’re going to make money or you need 10 million users +/-, or you’re dead on arrival. Many projects have neither, nor do they have a credible plan to get there.
Two, a lot of false claims exist about how blockchain will be transformative but this is merely lip service to the Next Big Thing (and a ploy to raise cash).
To the positive, the free market is still functioning as weak projects are folding while legitimate companies are now using crowdfunding, with real assets & business models, executive leadership, & legitimate blockchain technology – all coming to the fore. Alt-coins are down but not out & the failure rate is hardly different from the real economy. It’s still early days.