One of the biggest opponents of the popular cryptocurrency identified it as a means of “value preservation”.
The fight between bitcoin’s supporters and its critics will soon cease to be interesting. The reason is that the camp of critics is emptying at a faster rate than the one where the price of bitcoin goes up. The opposing are disappearing, and we won’t have anyone to quarrel with!
Even the fiercest critic of cryptocurrencies, the well-known economist Nouriel Roubini, is slowly starting to turn them around. We are referring to the same Roubini who for years has claimed that bitcoin is destined to end up in the museum of failed currencies.
That it’s worse than the tulip mania. That its value on the basis of fundamentals is zero. The same Roubini, who at a Senate hearing in October 2018, described bitcoin as the “mother of all bubbles.”
In his interview with yahoo finance – although he continues to insist that bitcoin is not a currency – he admitted that it may have to some extent the characteristics of value preservation (“maybe a partial store of value”).
Unlike thousands of other digital currencies that he called as shitcoins (p.s. and the cryptocurrency community also calls them that way), it [bitcoin] cannot be easily underestimated because there is an algorithm that determines how much its supply will increase.
Rubini claims it’s not a currency because nothing is priced in bitcoin. Moreover, there can be no mass transactions because the bitcoin network has the ability to validate only five transactions per second, unlike Visa, which can carry out 25,000.
Although he has moved significantly from his original positions, Rubini still falls into the same mistake that those who have dealt superficially with bitcoin make. Compares this to the documents issued by the Central Banks. This is a methodological error.
Although bitcoin is a category in itself, the only thing that approaches it as a concept and as such should be treated, is digital gold. It wasn’t created to buy our bread or coffee. We don’t use gold either, but that doesn’t mean it’s worthless. We don’t use stocks or bonds in our daily markets either. They’re not designed for that.
Bitcoin is not slow
On the issue of the speed of transaction validation, Rubini makes another mistake. Visa is actually much faster, but it’s not currency. It’s a payment system. It may seem to us consumers that payment is made in a few seconds, but the process is not complete. It is days or even weeks before the liquidation between banking institutions, that is to say, reaches the final stage.
In bitcoin, even an international transaction is validated without requiring any other stage within minutes of the hour. No liquidators, back office, costly infrastructure are required. The value is transferred from one to the other and that’s it. There’s no more. As with paper money.
It is indeed not convenient for the consumer to use it at the moment, although it is only a matter of time before it is resolved. Soon Visa will be connected to our electronic cryptocurrency wallet, as it is currently linked to our bank account in euros or dollars or pounds.
It’s already the beginning. In a similar way, we will pay directly with bitcoin through PayPal. In fact, due to increased demand, PayPal has raised the threshold for purchases in cryptocurrencies. From $10,000 a week, it has now raised it to $20,000.
Why it takes so long to establish
It is a fact that the first question one does by touching a new currency is what one buys with it. How many people accept it in exchange for other goods? That’s why everyone’s first preference is standard currencies.
Replacing a dominant monetary form is difficult, but not as much as it used to be. Too many fiat currencies have disappeared, most commonly the cause of hyperinflation. Some have been replaced by other currencies issued by the state itself or another state entity.
The argument that bitcoin has not yet been established is not based on realistic estimates. It was not possible to dominate within such a short time. What monetary form has achieved it in all human history? How long did it take the banknote to replace the gold? The important thing is that it’s growing all the time.
Its value has been revalued compared to any currency in the world, with any stock market value on the planet.
One step at a time, Nouriel. At least you finally realized it’s not a tulip. As soon as you know the rest, we’re waiting for you in our company.
Central Banks Digital Currencies
One final remark concerning the interview. The renowned economist foresees a major revolution taking place over the next three years. When it starts, we won’t have to have a bank account, not even checks.
Of course, he thinks CBDCs will also make cryptocurrencies useless. What he has not realized, however, is that bitcoin is the only alternative to the Central Banks. It is the only way to escape the absolute and suffocating control of the government.