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Steve Forbes: Here’s Why Cryptocurrencies Aren’t Money

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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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E.J. Smith - Your Survival Guy

E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris. Please get in touch with E.J. at ejsmith@yoursurvivalguy.com