Writing in his eponymous magazine, Steve Forbes explains to readers why cryptocurrencies cannot be “real” money, at least not the way they’re set up today. Forbes writes:
THE ASTONISHING FACT about the explosion in cryptocurrencies is that their creators have overlooked a fundamental fact: Money isn’t viable if it fluctuates in value, particularly with the wild swings characteristic of this sector. Most buyers are looking to make a quick buck, treating Bitcoin et al. like penny stocks of yore. They forget that the very instability of government-produced money is one of the two critical reasons cryptocurrencies were created in the first place (the other being privacy). If in 2013 you had taken out a mortgage for $250,000 in Bitcoin, you’d owe the bank roughly $18 million today.
Until one of these digital monies effectively ties itself to gold, a basket of commodities or a bundle of major currencies, it will never replace the flawed, traditional central bank currencies we’re currently stuck with. To be a true alternative, a cryptocurrency must also be easy to use for day-to-day transactions. Moreover, the supply can’t be artificially restricted. Fabricated scarcity doesn’t create value; utility and trustworthiness do. Look at the Swiss franc. Its supply is enormous. But because its long-term stability has been better by far than that of any other currency in the world over the past 100 years, people find it highly desirable.
Read more here.
Steve Forbes: Why Gold, Cryptos, and Free Markets Matter
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