Often we see the qualms the traditional finance raised against the new age of money.
Former U.S. Federal Reserve chair Janet Yellen argued against Bitcoin.
“It has long been thought that for something to be a useful currency, it needs to be a stable source of value, and bitcoin is anything but,” she claimed, continuing:
“It’s not used for a lot of transactions, it’s not a stable source of value, and it’s not an efficient means of processing payments. It’s very slow in handling payments. It has difficulty because of its very decentralized nature.”
This is the same rhetoric that she has used in the past, and echoes the chorus of her compatriots of finance, such as economist Nouriel Roubini and billionaire investor Warren Buffett.
It seems these people are hellbent on killing Bitcoin and cryptocurrency before they even have a chance to really materialize. They consistently make shallow and one-dimensional assertions that have no ability to stand up to modest scrutiny.
“It needs to be a stable source of value, and bitcoin is anything but.” We just it a 17 month low in volatility and have shown to be less volatile than the S&P 500 and the DOW.
“It’s not used for a lot of transactions.” There have been 285,908 Bitcoin transactions in the past 24 hours. Bitcoin is just one of thousands of cryptocurrencies which are years away from reaching their potential.
“It’s very slow in handling payments.” How long does it take to send money across borders? Between banks? Days? The full settlement time for a Bitcoin transaction is 9m 40s (current average block time). I’d argue that’s lightning fast compared to traditional payments which are really just good at masking how long their ledger takes to update. This also completely ignores that there are instant and free cryptocurrencies now.
“It has difficulty because of its very decentralized nature.” What a weak position to take. It’s also extremely hypocritical. Are we not staring down the barrel of a gun because of the difficulty inherent in our very centralized economy?
I say that decentralization is not the problem, it is the cure. No one controls Bitcoin or can interact with it without consensus of the network. Without centralization we can strive for a more aligned incentive system that is likely to lead to increased global equality over time.
Is that not the end goal of a global economy? We can only play this prisoner’s dilemma for so long.
We aim to take control away from those that would continue a bloated and broken system.
No wonder those like Janet Yellen and Warren Buffet are continually painting Bitcoin as such a dangerous force — it threatens their position.
If nothing else, transparency is also something we demand. Everything about Bitcoin is viewable by everyone. The same cannot be said for the machinations of the Federal Reserve.
It really is sobering to know that the USD was taken off the gold standard 47 years ago. That’s 47 years that the USD has been a non-commodity backed fiat currency. We also know that the average lifespan of a fiat currency is 27 years. Nearly every man-made currency during our history as a species has spectacularly failed.
We’ve been down this road before.
It’s time for something new.
It’s time for something that Janet Yellen fears most: change.