Refusing to bite on Bitcoin

Thanks to Kenneth Rogoff for his sensible remarks on Bitcoin and other crypto currencies (“Has peak crypto already come and gone?,” Opinion, Dec 25). The Bitcoin fad, to date, has been fueled by a combination of technical interest, criminal activity, and what amounts to currency speculation. For most ordinary people (non-techies and non-criminals), the question is whether they ought to “invest” in it — hoping that, later on, others may value it more highly than they do now, so they can sell at a higher price. As long as speculation for profit remains a major market for Bitcoin, its value as a currency is pretty limited. Who would “spend” a currency that’s drastically increasing in value (deflation)? Who would save a currency that’s dramatically decreasing in value (inflation)?

Rogoff’s lottery analogy is right on, though we should remember that governments are certainly not averse to utilizing lotteries for their own purposes, namely raising money — “real” money.


Stephen Polit