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Bitcoin Skeptics
- Thread starter Millard
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In 2013/2014, Paul Krugman, the Nobel prize-winning economist and NY Times columnist, said Bitcoin was nothing more than a "long con" with an evil libertarian agenda:
"At the end of 2013 I wrote a post titled “Bitcoin is evil,” riffing off Charlie Stross’s “Why I want Bitcoin to die in a fire.” Charlie and I both keyed in on the obvious ideological agenda: Bitcoin fever was and is intimately tied up with libertarian anti-government fantasies."
Source: The Long Cryptocon
In an earlier column, Krugman cited Charlie Stross' explanation of that agenda:
"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions."
Source: Bitcoin Is Evil
"At the end of 2013 I wrote a post titled “Bitcoin is evil,” riffing off Charlie Stross’s “Why I want Bitcoin to die in a fire.” Charlie and I both keyed in on the obvious ideological agenda: Bitcoin fever was and is intimately tied up with libertarian anti-government fantasies."
Source: The Long Cryptocon
In an earlier column, Krugman cited Charlie Stross' explanation of that agenda:
"BitCoin looks like it was designed as a weapon intended to damage central banking and money issuing banks, with a Libertarian political agenda in mind—to damage states ability to collect tax and monitor their citizens financial transactions."
Source: Bitcoin Is Evil
Unless a currency has been authenticated by a government, it is unlikely to be fully trusted. But that does not mean that it cannot become a plaything for the naïve and gullible, or a weapon of financial mass destruction for political belligerents around the world.
Billionaire George Soros says the primary value of cryptocurrency is for “for tax evasion” and “the rulers of dictatorships.”
“Cryptocurrency is a misnomer and it’s a typical bubble which is always based on some kind of misunderstanding. Bitcoin is not a currency, because a currency is supposed to be a stable store of value, and a currency that can fluctuate 25% in a day can’t be used, for instance, to pay wages, because the wages could drop by 25% in a day.”
Source: http://fortune.com/2018/01/25/bitcoin-blockchain-billionaire-george-soros/
Agustin Carstens, general manager of the Bank for International Settlements (BIS), says Bitcoin is "a combination of a bubble, a Ponzi scheme" and an "environmental disaster":
“The tried, trusted and resilient modern way to provide confidence in public money is the independent central bank."
Source: History Bodes Ill For Bitcoin, Other Cryptocurrencies Warns Head Of Global Central Bank Consortium
Interview with Bloomberg
Interview with Yves Mersch, Member of the Executive Board of the ECB, conducted by Piotr Skolimowski and Carolynn Look on 6 February 2018
BIS General Manager Augustine Carstens said in his speech in Frankfurt the other day that there is a “strong case” for authorities to rein in digital currencies because of their links to the established financial system. How would you respond?
The General Manager of the BIS is usually also reflecting the views that are expressed around the table when central bankers come together. You won't be surprised to know that we at the ECB are fully in line with his views and we have similar worries, or similar endeavours we are working on.
The question is not so much that these virtual currencies (VCs) are already at a level that would cause huge disruption in the real economy, but we are currently more concerned about the social and psychological effect they seem to have. In this respect money has to do with confidence and that's why we, central bankers, feel that we have a certain role to play to preserve confidence of the public in our legal tender. There is so much money flowing in that it's like a gold rush - but there is no gold.
What specific role can the ECB as a banking supervisor play in reining in digital currencies?
It's important to stress that we are a supervisor and not regulator. But supervisors can also impose certain requirements in terms of risk mitigation and prudent behaviour. But by and large, many banks out of their own initiative have already taken clear positions that they will not venture into this gold rush. But that being said, it's not only the question of the bank supervisor. Also from the monetary policy perspective, the central bank has a mandate to promote sound and efficient payment systems. From that point of view, it remains appropriate that we keep a clear distinction between virtual private initiatives, not backed by anyone, and trusted public currencies that are legal tender and backed by whole economies.
Are you coordinating your efforts with other authorities?
We are obviously in a constant dialogue with other authorities, whose mandate is to maintain the integrity of the markets, protection of investors and of consumers. Therefore we should have a deeper reflection on where the action is needed. There is an area of investor protection, then there is oversight of the financial market infrastructure. If you increasingly have bridges between the virtual world and the real world and then there is a collapse in this virtual world, it could drain liquidity from the real world. This then becomes a concern for the central bank.
[...]
There seems to be a certain change of tone in how you and your colleagues now speak about digital currencies. In the past some of your colleagues largely dismissed it as, for example, Tulip mania with no immediate consequences for the central bank. What prompted this bigger sense of urgency that something needs to be done right now?
As long as it was negligible it was not considered a priority, but since this hype accelerated at the end of last year it has moved higher up on the agenda. If you see how fast something can develop, it can very quickly reach dimensions of past bubbles that also had negative effects on the economy. That we cannot ignore. The valuations are not at a level where you would now jump from your chair and say “you need to forbid this thing”. We are not there. But what I do not like is the public hype driving this thing. Also the amount in ICOs is rather small. But this is market integrity, this is protecting the consumer. Here you can't say it's also affecting monetary policy. One thing to remember is also that we target asset bubbles if they are a risk for financial stability, and are debt-financed.
If we could fast-forward a bit --- can you imagine a situation where there is going to be one day a digital euro? Do you completely rule out such development -- a digital fiat currency?
I'm not a science fiction writer so in my official imagination I would restrain myself at best to look at certain circumstances if citizens were to desert cash, which is not the case right now. I could imagine a digital representation of cash, meaning a digital issuance that would replicate the features of cash, not a new digital currency disrupting bank intermediation, in order not to rock the boat of our whole economy and put into question the functioning of a two-tier banking system. So why would we do it? For the sake of disruption? We have made so much effort to make our banking system safer and sounder again, and we are still not fully finished. Why would we then discontinue with that? I think there would be a price - and maybe not a small price - in doing away with the banking system from one day to the next
Interview with Yves Mersch, Member of the Executive Board of the ECB, conducted by Piotr Skolimowski and Carolynn Look on 6 February 2018
BIS General Manager Augustine Carstens said in his speech in Frankfurt the other day that there is a “strong case” for authorities to rein in digital currencies because of their links to the established financial system. How would you respond?
The General Manager of the BIS is usually also reflecting the views that are expressed around the table when central bankers come together. You won't be surprised to know that we at the ECB are fully in line with his views and we have similar worries, or similar endeavours we are working on.
The question is not so much that these virtual currencies (VCs) are already at a level that would cause huge disruption in the real economy, but we are currently more concerned about the social and psychological effect they seem to have. In this respect money has to do with confidence and that's why we, central bankers, feel that we have a certain role to play to preserve confidence of the public in our legal tender. There is so much money flowing in that it's like a gold rush - but there is no gold.
What specific role can the ECB as a banking supervisor play in reining in digital currencies?
It's important to stress that we are a supervisor and not regulator. But supervisors can also impose certain requirements in terms of risk mitigation and prudent behaviour. But by and large, many banks out of their own initiative have already taken clear positions that they will not venture into this gold rush. But that being said, it's not only the question of the bank supervisor. Also from the monetary policy perspective, the central bank has a mandate to promote sound and efficient payment systems. From that point of view, it remains appropriate that we keep a clear distinction between virtual private initiatives, not backed by anyone, and trusted public currencies that are legal tender and backed by whole economies.
Are you coordinating your efforts with other authorities?
We are obviously in a constant dialogue with other authorities, whose mandate is to maintain the integrity of the markets, protection of investors and of consumers. Therefore we should have a deeper reflection on where the action is needed. There is an area of investor protection, then there is oversight of the financial market infrastructure. If you increasingly have bridges between the virtual world and the real world and then there is a collapse in this virtual world, it could drain liquidity from the real world. This then becomes a concern for the central bank.
[...]
There seems to be a certain change of tone in how you and your colleagues now speak about digital currencies. In the past some of your colleagues largely dismissed it as, for example, Tulip mania with no immediate consequences for the central bank. What prompted this bigger sense of urgency that something needs to be done right now?
As long as it was negligible it was not considered a priority, but since this hype accelerated at the end of last year it has moved higher up on the agenda. If you see how fast something can develop, it can very quickly reach dimensions of past bubbles that also had negative effects on the economy. That we cannot ignore. The valuations are not at a level where you would now jump from your chair and say “you need to forbid this thing”. We are not there. But what I do not like is the public hype driving this thing. Also the amount in ICOs is rather small. But this is market integrity, this is protecting the consumer. Here you can't say it's also affecting monetary policy. One thing to remember is also that we target asset bubbles if they are a risk for financial stability, and are debt-financed.
If we could fast-forward a bit --- can you imagine a situation where there is going to be one day a digital euro? Do you completely rule out such development -- a digital fiat currency?
I'm not a science fiction writer so in my official imagination I would restrain myself at best to look at certain circumstances if citizens were to desert cash, which is not the case right now. I could imagine a digital representation of cash, meaning a digital issuance that would replicate the features of cash, not a new digital currency disrupting bank intermediation, in order not to rock the boat of our whole economy and put into question the functioning of a two-tier banking system. So why would we do it? For the sake of disruption? We have made so much effort to make our banking system safer and sounder again, and we are still not fully finished. Why would we then discontinue with that? I think there would be a price - and maybe not a small price - in doing away with the banking system from one day to the next
Robert Shiller, professor of economics at Yale University and co-founder of the Case-Shiller Index, says Bitcoin bubble may stick around for a while in an interview with CNBC's "Trading Nation" on April 12, 2018.
Nobel-winning economist rails against bitcoin, says it's a perfect example of ‘faddish human behavior'
"I'm interested in bitcoin as a sort of bubble. It doesn't mean that it will disappear, that it'll burst forever. It may be with us for a while.
"To me, it's interesting as another example of faddish human behavior. It's glamorous," he added.
...
"I don't mean to dismiss it. Some smart people went into these and other cryptocurrencies," said Shiller, who won the Nobel Prize for economics in 2013. "But it's a story that I think goes way beyond the merit of the idea. ... It is more psychological than something that could be explained by the computer science department."
...
"Part of it is political. Economists tend to neglect the political side," he said. "There's a big element of people [who] don't trust the government anymore. They like the idea that this didn't come from the government. It came from some real smart computer scientist. They like that. It's a great story for today's markets."
Source: "To me, it's interesting as another example of faddish human behavior. It's glamorous," he added.
...
"I don't mean to dismiss it. Some smart people went into these and other cryptocurrencies," said Shiller, who won the Nobel Prize for economics in 2013. "But it's a story that I think goes way beyond the merit of the idea. ... It is more psychological than something that could be explained by the computer science department."
...
"Part of it is political. Economists tend to neglect the political side," he said. "There's a big element of people [who] don't trust the government anymore. They like the idea that this didn't come from the government. It came from some real smart computer scientist. They like that. It's a great story for today's markets."
Nobel-winning economist rails against bitcoin, says it's a perfect example of ‘faddish human behavior'
Interesting perspective comparing a very new crypto exchange to Deutsche Bank.
Microsoft founder Bill Gates calls Bitcoin "greater fools theory" investment on CNBC's Squawk Box on May 7, 2018
"As an asset class, you're not producing anything and so you shouldn't expect it to go up. It's kind of a pure 'greater fool theory' type of investment," Gates said. "I would short it if there was an easy way to do it."
Source: Bitcoin almost broke through the $10,000 mark—then Warren Buffett and Bill Gates came along
Berkshire Hathaway CEO Warren Buffett called Bitcoin "rat poison squared" at 2018 Berkshire Hathaway annual shareholder meeting on May 5, 2018:
Berkshire Hathaway CEO Warren Buffett called Bitcoin "non-productive asset" on CNBC Squawk Box on May 7, 2018:
Source: Bitcoin almost broke through the $10,000 mark—then Warren Buffett and Bill Gates came along
"[Bitcoin] itself is creating nothing. When you're buying nonproductive assets, all you're counting on is the next person is going to pay you more because they're even more excited about another next person coming along."
Source: Bitcoin almost broke through the $10,000 mark—then Warren Buffett and Bill Gates came along
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