What Are Bitcoin’s Critics Really Afraid of?
A recent opinion piece in The Nation by TIME Business reporter Sam Gustin tells readers to “Be Afraid.” He’s warning them about cryptocurrency and Donald Trump.
In it, the author quotes Nobel Prize-winning economist and Columbia University professor Joseph Stiglitz, saying: “There’s an enormous risk of self-dealing here.”
Economist’s Warning About Trump, Cryptocurrency
“The danger is not only conflicts of interest, but a mindset among Trump and his cronies in which they don’t even understand the concept of conflicts of interest,” Stiglitz said.
“The irony is that here you have a president who was elected on an allegedly ‘populist’ platform engaging in the most massive pro-billionaire, pro-wealth redistribution in US history.”
“The result, experts say, will be higher prices, reduced consumer protections, and deeper economic inequality in the United States,” Gustin writes.
But is that really true?
Is it true that cryptocurrency is transferring the most massive sum of wealth in history from the middle class to billionaires?
Bitcoin’s Populist Appeal
If anything, crypto’s most die-hard advocates would argue that the traditional finance system, based on credit, redistributes the most to billionaires. Because it constantly revalues debt with cheaper dollars. Billionaires and their companies use the most debt-based instruments.
Meanwhile, the ever-expanding money system causes prices to rise steadily. Crypto assets, on the other hand, cause lower prices by rewarding people for saving their money. The easy credit economy does reward businesses with large expense accounts to spend their money.
Moreover, the Republican Party’s reckoning with crypto is helping to ensure consumer protections for those who want them. But that doesn’t leave out allowing more freedom for others.
Many blockchain users are willing to take the risks that go along with pushing liquid financial markets and the Internet’s capability to their limits.
As for economic inequality, it has been a complaint of voters for decades under traditional finance systems. Their benefits only seem to kick in at a certain economy of scale unreachable by most people.
But that’s not so with cryptocurrencies like Bitcoin and Ethereum, which have made the profits of market capitalism available to all participants equally at any level of participation.
Bitcoin’s price was only $43,000 a year ago. But today, it’s more than twice that amount, trading at $103,000 on Saturday. That represents a gain of over 130% returns on investment for crypto buyers who purchased Bitcoin last January.
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