Letter to the Editor: Bitcoin’s Best Use

Here’s a letter to the editor I wrote to The Economist, 2 weeks ago, in response to their Aug. 30 deep dive on crypto assets and blockchain. It doesn’t look like they’re going to run it, so I offer it up as a very brief note on Bitcoin’s utility in the world, today.

Even at today’s chastened rate, it’s self-evident that bitcoin’s price far exceeds the value of its use as money; but it’s a blind leap from there to conclude it has failed. Bitcoin, the network, has demonstrated definitively that value can be stored and transacted digitally, without recourse to trusted institutions. The combination of a crypto asset and blockchain technology is what provides the “economics” to make this demonstration work, as this newspaper wrote in June. The demonstration has inspired thousands of similarly principled projects, and become the blue-chip asset of this emerging industry. Bitcoin’s success is, then, not just academic: For the first time, anyone, anywhere, may invest speculatively in an emerging technology — a powerful parallel to the insular world of venture capital. When one considers the wealth disparity (not to mention race and gender discrimination) that has characterized VC’s first few innings, this accomplishment alone is cause for cheering.

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