When it comes to bitcoin, Megan McArdle is a believer … in utility:
Most of the value of a bitcoin has accumulated in the past 12 months, as the price of a bitcoin increased almost tenfold since April 2020. Yet underlying that value — bitcoin’s real-world, non-speculative, non-hobbyist uses — are things such as transferring money out of countries with currency controls or dealing in certain illicit goods or offering an alternative to currency in countries experiencing hyperinflation. In these contexts, it looks less like a currency than a substitute for expensive jewelry — something small, reasonably durable and highly valuable, which is thus relatively easy to move across borders undetected or to store and liquidate in case society collapses. But at least jewelry is pretty to look at in the meantime.
The more I think about it, the more I wonder if that isn’t the right analogy. Maybe techno-utopians just like looking at bitcoin the same way brides like being able to see two months of their spouse’s work flashing on their hand. And what’s wrong with that? [WaPo]
I’ll be keeping an eye out for other skeptical opinions on cryptocurrencies. Given how wrong I’ve been about Paypal (“What unique utility does it have?”), unpublished, I’m looking forward to someone unveiling why I can’t live without cryptocurrencies.
