Earlier this month, the European Central Bank (ECB) published a paper in which the authors argued that the existence of Bitcoin could deprive the have-nots and late-comers.
Specifically, they wrote:
“Since Bitcoin does not increase economic productivity, the effects of the assumption that it continues to increase in value are actually distributive, i.e. the effects of wealth on the use of the first Bitcoin owners can only come at the expense of consumption by the rest of society. “
It has angered many bitcoiners, including Frank in his Take… but isn’t this hyperbitcoinization? If bitcoin becomes the world’s currency, HODLers become the new rich and fiat wallet holders go broke, right?
The real crux, I think, lies in the first part of the phrase. Many bitcoiners, including myself, believe that Bitcoin is real would be increasing the productive capacity of the economy. (There are several reasons for this, but the main one is that it removes the Cantillon effect of fiat money, which greatly benefits governments.)
If it was possible in 2009 to replace all the fiat money in the world with bitcoin so that everyone gets a fair share (thus no redistributive effects), it might have been better … but the ECB economists still against it: they just don’t see the benefit of bitcoin in the first place.
Since Satoshi Nakamoto didn’t have a way to exchange everyone’s fiat bitcoin even if he wanted to, it makes sense that he launched the project the way he did, allowing anyone to take this high currency whenever it suits their individual risk appetite.
If the ECB economists believe there is a better way to distribute this new currency, I would suggest they use their Cantillon-funded salaries to write a paper on that.
This article is a Take it. The views expressed are entirely those of the author and do not reflect those of BTC Inc or Bitcoin Magazine.
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