Refuting the “Financial Times” article: bitcoin is not worth a hair
This seems to have become a fixed pattern: if bitcoin prices, negative news Keynes who will start a whoop and a holler bitcoin. At the end of 2013, bitcoin prices have hit a record high, at that time, “New York Times” blogger Paul? Krugman (PaulKrugman, American economist, Nobel Laureate) in the premise of no evidence of directed bitcoin is evil.
Krugman because of the negative evaluation of the bitcoin was approved, has yet to recover from the soaring currency price shock, so the “Financial Times” reporter Dan Klum? (DanMcCrum) homeopathy took his stick.
As a reporter for the reader to popularize the knowledge of McCrum, and did not choose to take a rational narrative way, but directly pointed out that even if the bitcoin price of more than $1000, its true value is zero. The reason is nothing more than the bitcoin GDP compared with the world worth mentioning, the $16 billion market capitalization reached even trillions of dollars, if you can not guarantee the daily trading volume of billions, bitcoin is still not worth a hair. He repeated some of a commonplace talk of an old scholar points in the article, concluded that bitcoin is a Ponzi scheme, because currency price increases need more participants to promote. The mode of operation of bitcoin indeed and stock price movements of different. The stock will rise due to the injection of new funds, create new price by cost savings or a way to improve efficiency, so as to encourage the participation of more investors, until the stock is more potential shares instead of.
McCrum does not understand bitcoin, but part of his argument really gets to the heart of the problem. He said:
The problem is, compared with the application of currency exchange medium price collapse or exponential growth are of no use, no matter how elegant the essence of cryptography.
In the past few months, the dollar exchange rate to double growth rate; RMB prices fell a lot; Venezuela Bolivar almost fell nearly 40% pesos not worth a hair; Argentina; India has adopted strict regulatory measures, legal tender price is still very weak; Brazil, Nigeria, Russia, and the world currency status has been shaken. Even gold.
For this phenomenon, Krugman and McCrum explain only one: excessive currency leads to serious system problems and crisis. The Nobel prize winner Friedrich? Auguste? Hayek (FriedrichAugustHayek) on its monetary and economic theory, may make the following explanation:
The older generation of bankers or even impossible to imagine the mode of operation of the new system, so they will oppose the implementation of the new system. However, this expectation from professionals in the opposition should not be blocking our feet. I think, if there is a suitable opportunity, a new generation of the banking industry will be the rapid development of technology, not only to build safe and favorable bank mode, but also let the whole community benefit, even be better than the current community.
The Hayek has existed for nearly 10 years. The monetary system created by government policy is a “old generation banker” support, but always arrive but crumbling risk. In the past 10 years, there has not been a perfect solution, but without any preventive measures. But the more we hear the endless war of words. Perhaps the Hayek Adam? Smith (AdamSmith) has had the greatest economist mind the answer:
The market economy is not the stability of the market mechanism and the absence of monetary adjustment results…… Only the free market competition in order to accurately respond to all need to deal with the situation.
This viewpoint, all but before any click into place, no one can think like the Hayek so well. He explained:
When you study in the history of money, you will definitely not help but ask: why people can endure more than 2000 years since the government is autocratic, most willing to use, the exploited? May be only a myth (divine) to explain all this. For thousands of years, the power of the government is ingrained, even some of the top students (for a period of time even the author doesn’t think this problem is never questioned). However, once the “supreme” dogmatism has been questioned, it is the foundation of soon instability. From the Hayek “non national currency”
The main point of Hayek is that if the money is in the center of management, regardless of whether they intend to the central organization, money will inevitably be abused, because by special interests, is behind the manipulation can hardly be avoided. In addition, few people will question the ongoing currency crisis, most countries in the world have suffered different degrees of crisis, from small losses to hyperinflation or system collapse, and even the collapse of the financial system.
Hayek proposed a currency crisis solution appears to be very simple: to compete with private money. However, this competition is never allowed. Any attempt to create group or individual private money are immediately banned. The government through various means by us, let us think that these organizations only engaged in criminal activities.
One of the victims is bitcoin. There are many reasons to attract users of bitcoin, in my opinion, bitcoin was not out of danger and contrary to public opinion or any unrealistic concept, but to the mainstream view added Hayek represents, either for bankers, government or ordinary people, absolutely harmless.
The nature of bitcoin cost savings and efficiency brought huge potential value, from a certain extent, Nakamoto and Hayek agree without prior without previous consultation. At present, even the US government has acknowledged that bitcoin is unlikely to be banned. This also makes bitcoin become the only history of a global currency privatization, is not worth a hair.
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