A journalist asked me to comment on the statement of the economy Nobel prize winner - prof. Joseph Stiglitz who said that authorities will 'hammer' bitcoin and that it's prize will drop to $100.
Here's my response...
I feel pity seeing prof. Stiglitz who is economic Nobel prize winner, undermine the significance of bitcoin and cryptocurrencies. I understand it though - he’s dedicated his entire life to work for the establishment and centralized institutions like the World Bank, OECD or US governments. What we have to understand is there is no other system taken for granted and misunderstood as much as the monetary system we are currently living in. Taking on nearly religions proportions, the established monetary institutions like the World Bank exist as one of the most unquestioned forms of faith there is. Using the modern money mechanics and fractional reserve banking - there is no question that institutions like Federal Reserve Bank or World Bank, are responsible for increasing the global inequality gap and I really feel sad to see academics like prof. Stiglitz becoming lobbyists to maintain the status quo.
It’s important to understand that the World Bank is in fact a US bank supporting US interests because US holds the veto power over all decisions as it is the largest provider of capital.
A glance at the performance at the World Bank reveals that the institution which publicly claims to help poor countries alleviate poverty has done nothing but increased poverty and the wealth gap while corporate profits sore. In 1960 the income gap between the 20% of the richest versus the 20% of the poorest countries was 30:1. By 1998 it was 74:1, while from 1985 till 2000 the number of those living on less than $1 a day increased by 18%. In a world where 42 richest people hold same wealth as 3.7bn poorest people, it is clear that something is very wrong.
These inequalities can be fixed by technology and cryptocurrencies such as bitcoin. The nature of bitcoin is that it’s open, decentralized, neutral, borderless and censorship-resistant. It cannot be controlled or manipulated but it can be monitored in much more precise and transparent way than any FIAT currency out there. In fact anyone can use blockchain explorer to see the time and amount of transactions that happened as well as the digital wallets (parties) taking part in these transactions. Try tracking how much money exactly the US government sent to Iran or Saudi Arabia. Mr Stiglitz says that regulations will be like a hammer to cryptocurrencies and might drop down the price of bitcoin to $100 - that’s just absurd and arrogant to say. As an economist Mr Stiglitz should understand that the central banks and governments have zero chances of imposing regulations or control. Bitcoin is based on an open-access participatory model of market-based economic competition. Through risk and reward strategies based on game theoretical outcomes it ensures collaborative participation by multiple participants without anybody having the ability to cheat, due to a system of emergent consensus based on advanced maths and cryptography.
Unfortunately, today’s economics is often viewed with confusion and boredom. Endless streams of financial jargon coupled with intimidating mathematics quickly deter people from attempts at understanding it. However, the fact is, the complexity associated with the current financial system is a mere mask, designed to conceal one of the most socially paralyzing structures humanity has ever endured. Bitcoin is here to change it. Central banking institutions can either adapt it or continue it's illogical resistance only to realize that the last resort is lobbying to prohibit math and make smartphones illegal. Good luck with that!
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While writing this I thought of the lobbyist in the oil industry who throughout the last 50 years have been sponsoring wars, denying climate change and stopping transition to electric vehicles. With more and more car brands switching to EVs it looks like the oil lobbyists have finally been defeated.
With emergence of bitcoin a similar faith is now awaiting banking institutions.