Dollar or Bitcoin, Which Is the Real Fraud?
Why is the dollar better than Bitcoin?
1. Because you can’t forge the dollar. Wrong: You can forge the dollar bills ($5, $10, $50, or $100 bills), but you can’t forge the Bitcoin.
2. Because you can’t duplicate the dollar. Wrong: You cannot duplicate Bitcoin, but you can print as many dollars as you think you need.
3. Because the US government stands behind each dollar.
Wrong: You can buy things with the dollar but, if its value declines, the US government is not responsible for your lost buying power.
4. Because the US government and the central banks print only the amount of money the economy needs. Very Wrong: The US government prints as much money as it thinks the economy needs.
5. Because the US government will never fall. Wrong: The US government will not fall as long as the world will accept dollars.
6. Because the dollar is today the most transferable asset globally, usable almost anywhere in the world. Wrong: Cryptocurrencies are much more transferable with a minimum cost.
7. Monetary policy is much easier to control according to the amount of money printed. Wrong: Most monetary institutions print money as a response to historical data in what they mistakenly call “fixing the economy.” Over the last decade, governments have bought a lot of assets with the money they printed, in what we call “seigniorage.” The one controlling the supply of printed money has the power to take wealth from society. Cryptocurrency is much more trusted because no one can just print it and, in doing so, seize wealth from the public. There are formulas for mining a cryptocurrency (i.e., printing), and so none that can be changed when someone decides he wants to.
8. With the dollar, you can’t launder money. Wrong: The black market comprises more than 25% of the advanced economy. With digital money, each transaction can be easily followed, eliminating the phenomenon of money laundering, tax evasion, and black markets. It’s just a matter of time and combining technical solutions and suitable regulations.
9. Fiat money enables the government to help and support society’s weak and vulnerable members. Wrong: Inequality continues to rise throughout the world. Weak economies understand that they need to adopt other currencies to address growing inequalities but that adopting the same digital currency (or even a few such digital currencies) would help in reducing these.
10. Because there is nothing safer than a dollar in the bank. Wrong: Banks can fail and, when they do, in some places depositers have a small amount of insurance but, in others, depositers must pray to get their money from the central bank or another institute. Digital currencies, on the other hand, are much safer as long as each owner safeguards his or her own key.
Dear Jamie,
I heard that you are calling Bitcoin a fraud and I’m wondering if it’s because of what you know about the dollar … or because of what you don’t know about it.
Every kid knows that if diamonds could be printed with no limit and no cost, diamonds would have no worth. Only for this reason, Bitcoin is better than the dollar.
