Economist Steve Hanke Believes Bitcoin Is Not A Real Currency

The well-known economist Steve Hanke believes that Bitcoin is actually a speculative asset, rather than real currency, so let’s read more on what he thought in the Bitcoin news today.

If you have read Satoshi Nakamoto’s original whitepaper, the takeaway is that BTC is a currency:

 “We have proposed a system for electronic transactions without relying on trust. We started with the usual framework of coins made from digital signatures, which provides strong control of ownership… We proposed a peer-to-peer network using proof-of-work to record a public history of transactions.”

While Bitcoin is now becoming a currency that was eventually the goal of Nakamoto, it is a goal that was not widely accepted. The Economist Steve Hanke at the John Hopkins University said that he doesn’t think Bitcoin is a currency:

 “#Bitcoin is not a currency, it is a speculative asset. In order for a #crypto-“currency” to be an actual currency, it must be tied to gold.”

#Bitcoin is not a currency, it is a speculative asset. In order for a #crypto-"currency" to be an actual currency, it must be tied to gold. pic.twitter.com/yMcRjeQt25

— Prof. Steve Hanke (@steve_hanke) July 4, 2020

Like the US dollar and other assets, gold dropped against Bitcoin over the past few years and one ounce of gold can now purchase 0.20 BTC while the exchange rate was one ounce of gold to 10 BTC. Block Tower Capital’s Ari Paul, explained that in 1971 people said the same thing about fiat currencies which is a naïve take on the future of money. Paul is referencing the same about the US dollar because people see it as a reserve currency despite the gold standard being abolished back in 1971. Alex Gladstein, the CSO at the Human Rights Foundation reminded the economist that BTC is superior to many other similar assets fundamentally:

 “Did you know that if I send you Bitcoin, no one can stop us? That no govt or corporation or oligarchy can change its rules? That no one can alter its issuance? That if properly used it is incredibly hard to confiscate or to pair addresses with people? Why deny when you can learn?”

Another reason why many don’t see Bitcoin as a currency is because it is impractical to spend it in everyday life. Few vendors accepted the cryptocurrency which can sometimes cost up to $10 to send one BTC. Transactions can also take up to 30 minutes. Entrepreneurs in the space are coming up with many ways to fight against this. Developer Jack Mallers launched the “Strike” app which is a service that allows the world to interact with Bitcoin and its Lightning Network.