David Morgan: My Two Bits About Bitcoin...The Pros And Cons
Some have asked our view on Bitcoin, and my response is simply—I view these things from a Free Market perspective. I have often stated that “The Market knows more than any of us”. I would not want to be labeled a hypocrite by stating my conviction that the “real” free market is capable of making decisions that are in the best interest of masses, and then proceed to disparage Bitcoin through a personal bias.
However, I do have a personal bias as to the basic construct of money, or what I would prefer to think of as “real” money. Here the span of history has given us a very clear message that a fair exchange of value for value is the only ethical way for people to conduct a transaction that is mutually beneficial for both parties.
Essentially, a cryptocurrency is a digital medium of exchange. The first one, created about four years ago, was Bitcoin. Since then, scores, if not hundreds of various permutations of the concept have been launched. Even the Royal Canadian Mint has gotten into the act, announcing the MintChip. They call it “the evolution of currency” – with a billing as the world’s first government cryptocurrency. The MintChip site states that “until now, there has been no electronic solution that cost-effectively addresses the very-low-value transaction markets, protects privacy, is available to everyone and emulates the characteristics of cash.” Well, time will tell…
Byron King unreservedly comments:
“For all the current problems of the dollar, Bitcoin was not the answer…To be perfectly blunt, Bitcoin always struck me as an overambitious ship awaiting its iceberg. Now, looking ahead to far horizons… the holds of our respective ships are filled with dollars, although the ballast near the keel of my hull, at least, is formed of real gold and silver. Gold, silver and dollars… That’s how the world works. It’s how the world has worked for a long time.”
Bitcoin opens a whole new world of hacking…
Andreas Antonopoulos’ biographical site lists him as having founded three bitcoin businesses and launched several open source projects. In an online interview earlier this year he stated:
“Bitcoin is not a safe investment. Bitcoin is the first experiment in a global distributed currency, stuff that’s never happened before; we have no idea how this is going to work out. “We’ve never had a currency that can enable distributed consensus without a third party (without a sovereign actor behind it; transmitted across borders without controls).”
Andre, who stores 90% of his Bitcoins off line (encoded/stored on a piece of paper) continues: “Bitcoin are an asset class of their own – not commodities, not strictly currencies, not stocks. Bitcoins can be stolen/hacked from your online “wallet”. Bitcoin opens a whole new world of hacking.”
Taking the longer view, he posits, “I’m not sure Bitcoin is going to be the ultimate crypto currency that wins. I am sure that crypto currencies are here to stay. Crypto currencies were invented, and once they were invented, they’re not going anywhere…”
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