Can Bitcoin Replace Government-Issued Money? A Debate

every time anyone pays for anything there's going to be an extra cost involved there isn't the single currency other than Bitcoin that has done anything that Bitcoin can do there is no way that you will ever have the speed of final settlement with Bitcoin or the low expensive accomplishing it then you can have today with all kinds of other monies compared to the real alternatives that exist today Bitcoin is the only one the only one that offers is the chance of having a monetary system free of government control about a third of all Bitcoin exchanges have been hacked at one time or another that's in comparison to about 1% of banks all of the people that are just constantly finding problems with Bitcoin need to just come to peace with it this is your only alternative to central bank's deal with it we now have to segue into the main event which is the debate on the resolution Bitcoin is poorly suited to the purpose of becoming any nation's main medium of exchange arguing for the affirmative george Celgene george please come to the stage arguing for the negative 70 and safe at the end a moose safe please come to the stage 15 minutes to establish the affirmative for the resolution Jane please close the voting Thank You Jean thank you all for giving me this opportunity to try to convince you that Bitcoin isn't quite as greatest you think I want to start out by saying that this is important I'm not against Bitcoin I'm pointing this out because I think it was late last week somebody on Twitter said oh I didn't know Celgene was against Bitcoin and I tweeted back I said not against Bitcoin I'm actually quite keen on Bitcoin in many respects I think it's a wonderful development and it's assuring in a whole set of technological possibilities that that I regard is extremely important and intriguing and I and in fact years ago before many economists were writing about this stuff I wrote an article about why I thought cryptocurrencies generally not Bitcoin specifically offered some possibilities for monetary reform that that were unprecedented and potentially the best some of the best possibilities we've seen yet and I'm not an apologist for official monies I want you to know that too because I'm about to claim that it's very unlikely think practically impossible that bit we'll take over from any established official money but that's not because I like official monies I've written most of my career against government monopolies of money and I favor privatization I'd like to see money privatized it's just that I don't think bitcoin is cut out for the job and that's the argument I have to make today I want to start by pointing out that it's an uphill battle for any new upstart money to replace to set aside an incumbent money to to to win people over from that incumbent money and that's because money is a network good it's perhaps the most clear-cut case of a network good out there what's a network good it's a good where the usefulness of the good to anybody is a function of how many other people are using it and money is a is a classic network good in that sense the first question a person asks about whether to use a money or not whether it's a good money is whether they can where is what can i buy with this stuff how many people will take it in exchange for things they have to sell that's the first thing that people want to know about any money and of course if you have an established incumbent money someplace then that's the stuff everybody is willing to trade for and it is disadvantageous to put it mildly to try to use something else anyone who's ever traveled knows that if you go to another country and you whip out your dollars you found it suddenly discovered that in most cases not in all because the dollar is one of the more widely used monies that your dollars aren't particularly valuable in other parts of the world and certainly true for Bitcoin that bitcoin is not widely used anywhere and in the world though it is used to some extent so I come to the proposition that's going to inform the rest of my remarks this evening and that is simply this that a necessary condition for an upstart money to succeed in replacing an established incumbent money is that it has to be considerably more attractive than that incumbent it has to be so attractive that it's able to overcome the fact that the incumbent money is already widely accepted has a big network compared to the upstart so you have to have a lot of attractive features and in that case the more attractive money can gain not only gained a footnote foothold but can acquire over time a successful network a network that grows so big that it can displace the established money so what I want to do in the remainder of my time is to talk about the features of Bitcoin and asks just how attractive is Bitcoin is it attractive in enough ways to give it a chance to take over from an established money if that money is relatively unattractive in some ways so let's talk about it I want to start with the question of trust trust I think is one of the things that makes Bitcoin attractive what I mean by trust here is one particular thing either we can hash it out in other ways but the sense in which Bitcoin is attractive with respect to trust is that there's no central authority that can suddenly create doodles of the stuff you all know I'm sure that there will be a maximum of approximately 21 million bitcoins issued ever that they we have a supply that grows according to a more or less preset schedule and that will asymptotically reach that amount and that's that this means that you don't have to worry about somebody pushing a bit point coin button somewhere where it's going to be 40 million or a hundred million or some large amount whereas with government money issuers there is some risk no doubt that they could abuse their powers of money creation and course in some famous cases they either have done it or are doing it and make their money's worthless as a result so this is a respect in which Bitcoin I think deserves a very high grade let's give it an a and must be said however that that many currencies in the world are not hyper inflating and that indeed if there's a problem with currencies around the world today in many cases it's that at least as far as there are issuing authorities are concerned they're not losing value quite quickly enough now I'll come back to the basket cases toward the end of my remarks and talk about why even in those risk in those cases I don't think bitcoin is likely to take over but I'm gonna save that for later so on the question of trust bitcoin earns a high grade it earns a high grade on privacy it's not quite anonymous as you know it's pseudonymous it gives people the ability to transact with an identity that is their own secret as it were and they can accomplish transactions with this pseudonym instead of having records that actually name them and they're allow people to find out what they've been up to this privacy acts aspect of Bitcoin deserves an a- for the simple reason that it isn't all that hard I'm told for people to find out through tracing different transactions to sometimes place names on to name the people who are transacting in Bitcoin to discover who they are as a result of a little bit of detective work but still it's not bad but now we come to some other features of Bitcoin that I think make it highly unattractive at least to the average person one of these is vulnerability to hacking here I'd give Bitcoin a c-minus or a D I think it's correct to say that about a third of all Bitcoin exchanges have been hacked at one time or another that's in comparison to about 1% of banks having been hacked I think that's for this country I don't know the worldwide figures the truth is a lot of money something approaching two billion dollars worth two billion dollars has been stolen and in Bitcoin that's quite a large percentage of the total so safety from hacking theft if you like not a very good score next let's take up value volatility things are getting worse people when they deal with a medium of exchange don't want it's to be risky for a very good reason a lot of us like to take risks but we like to do it on purpose we don't like the stuff that we passively receive in payments to be risky that means we have to go out of our way to avoid risk by investing it in something else and any amount that we keep on hand for exchange purposes is subject to big changes in value I know that I don't want the value of my money holdings to change dramatically while I decide where to go shopping or what investments to make on value volatility Bitcoin definitely earns an F most monetary economists will tell you that for the same reason gold is a very poor medium exchange its value is highly volatile it bounces around a great deal yet if you look at the standard deviation of value changes in Bitcoin they're about seven times as great that standard deviation is about seven times as great that of gold so this is a highly volatile medium of exchange or potential medium of exchange and that makes it quite unattractive now I'm going to come to the line point which is the cost of transacting or if you like the speed of transacting there these are related and here Bitcoin rates definitely a D to an F something like that it's it's notoriously non-scalable that means that in practice small transactions can be very very expensive for very large transactions it's not such a big problem there was something called the transactions crisis transactions fee crisis back in late 2017 during which it could cost anywhere from twenty to forty five bucks just to transfer any amount of Bitcoin any amount that's a fixed fee today it's much better but it's widely recognized in the Bitcoin community that the transactions fees are not competitive with other established monies just today I've been right lately I've been writing about dollar transfers and now it's possible to have instantaneous dollar transfers for basically for nothing a few pennies if that on all kinds of networks and that's only going to increase whereas with Bitcoin if you want an instant transaction it's going to cost you and that means every time anyone pays for anything there's going to be an extra cost involved now it's true that there are attempts to reduce this cost particularly the Lightning Network is is mentioned as one attempt to overcome the transaction costs of Bitcoin but it's still not clear that that will succeed and it involves at very least a second layer of transactions where the whole element of trust that is one of the key attractive features of Bitcoin now you have you have to rely on a centralized party to handle these transactions which are done off the chain so to speak and even so it doesn't work so well when you have non repeat transactions so now these are all reasons why Bitcoin is unlikely to be as popular with the average person as it is with many people in this room and this is the average person's willingness to use Bitcoin is an everyday medium of exchange that matters for its being able to take over an incumbent currency anywhere now having said that I have to say that it's true that in some countries not here not now but in some countries the incumbent currencies are terrible they're hyper inflating they're losing value very quickly they impose costs on their people the people who use them that are such as could make a currency like Bitcoin seem relatively attractive in that case we could say in those cases that Bitcoin does meet the necessary conditions that the necessary conditions for it to take over are met but those conditions aren't sufficient and here we come to the other part of the equation because even though Bitcoin might be more attractive than some incumbent currencies before people turned to Bitcoin they have many other options they could consider that could still be more attractive than Bitcoin they could turn to the dollar they could turn to the euro they could turn to any number of alternative means of payment that would make Bitcoin belong far down the list of prospective rivals so it's not just the case that Bitcoin has to be more attractive than an established currency it has to be more attractive than any number of alternative currencies that could be adopted instead of Bitcoin and that also have like the US dollar very large established networks around the world so for all of these reasons I think the likelihood of Bitcoin ever becoming any nation's main medium of exchange is vanishingly small I want to end with one final point among these other curve that could be more attractive than Bitcoin and might have a better chance of becoming a nation's money than it does I would name other perspective cryptocurrencies ice I think it's still a very early stage in the world of cryptocurrency in the in the story of cryptocurrency development and some of these other cryptocurrencies avoid the flaws of Bitcoin that make it a poor candidate thank you very much [Applause] okay thank you very much first of all to the Silva forum for the invitation and for the opportunity to speak here today thank you very much for professor Celgene for his comments I'm gonna get to the meat of it I guess straight away the I think the key thing to keep in mind is that bitcoin is already working Bitcoin is functional it's been operating non-stop for practically ten years and it is already I don't I don't remember the exact number right now but it is already one of the top 20 largest valued currencies in the world so it's already bigger than many currencies of many other nation states and most importantly in its functional role right now Bitcoin is the only working alternative to central banks in other words if you'd like to send money from here to China your only option up until the year 2008 was to go through the central bank now after Bitcoin was invented you are able to do it with the press of a button in an automatic way that doesn't rely on anybody else in the same way that when you call somebody you know you just press a bunch of buttons but there's nobody needed to let the call go through it's become a mechanical electronic process that takes you know that happens because machines do it and it's not because people intermediated so Bitcoin is already allowing for transfers across international borders and it's already breaking central bank's monopoly over that so I think the notion that Bitcoin has been failing I think is completely unrealistic or the notion of bitcoins likelihood of succeeding has been declining and is vanishingly small I think is contrary to reality because in reality we see that Bitcoin has been growing non-stop over the last 10 years and if you've looked at the growth rate and you think that oh Bitcoin hasn't grown fast enough over the last ten years clearly you haven't looked at the growth rate it couldn't possibly have grown and if I mean it could but it's been an enormous ly fast growth rate and the notion that we could get a monetary system and this is really I think the main problem with Professor surgeons comments the idea that Bitcoin has to basically be born ready to handle everybody's transactions overnight and to have all of the world's liquidity handed to it overnight from its creation or else it has failed I that is a completely unrealistic way of assessing it between has been growing in every metric that matters and bitcoins been improving in every metric that matters and there are simply no objectionable reasons why you would say that bitcoin cannot work as a monetary system and so to get to the point that Professor Celgene mentions that bitcoin you know displacing a money is something that is very hard I think it's not as hard as we as he makes it out to be hundreds of fiat currencies over the 20th century have been destroyed many several times over each you know many currencies were discord several times and they were replaced by new currencies or currencies of other countries silver was demonetized seashells all kinds of other kinds of money have lost their monetary role and you know the people who used to use seashells their network effect didn't protect them because when people came into their Island with gold the harder money won and this is the dynamic the professor Celgene ignores bitcoin isn't a startup that needs to do marketing to attract people bitcoin isn't going to win because it's going to you know have a better user experience or a you know nicer user interface than your Apple pay or whatever bitcoins value proposition is that it is hard money and hard money beats out easy money and soft money because soft money and easy money is easy to over produce and so anytime we look at history and this is what I discuss extensively in my book you know when people were using seashells Europeans arrived they can make seashells they can dig up for seashells easily they flood the supply of seashells seashells lose their monetary role people use gold and the same has happened with many other media and this is essentially the process that has been going on for the last 10 years with Bitcoin it's a harder form of money and it's gaining value because people would rather hold the harder money than the easier money and also it's gaining value because all the easier monies are being inflated at a much faster rate and so that really is bitcoins competition the problem we can always nitpick with Bitcoin and find things that we think are wrong with Bitcoin but that is the alternative that is that is the only working alternative that compete with government monies and the problem with the other currencies that Professor Celgene mentions and the problem with any other attempt to try and compete or to try and introduce a new monetary standard the problem that as libertarians I think we people who probably are a lot of libertarians in the crowd you know the problem is simply government won't allow a free-market monetary system to function because they want to take it over that's what happened with a gold system bitcoins most important most important characteristic probably other than its hardness is the fact that it resists government capture and control because of the evolution of Bitcoin and this is something that doesn't share with any of the other digital coins which are all centralized because they were all born after Bitcoin and because you know they'd never had the they never had the process of a neutral protocol growing on the internet on its own without a person being in charge because the person who created it disappeared all the other coins have someone in charge all the other coins are trivial to compromise and trivial to capture and therefore they are not realistic and any ideas of they are not realistic competitors to government money they can be easily shut down so the reason Bitcoin really can succeed is ultimately because of its hardness and because of its resistance the government captured I think those two things Trump all the other considerations that Professor Celgene had mentioned and to go to his points are saying on the issue of privacy I think you are giving Bitcoin a little too much credit bits it's not as good as you think it is but I don't think that even matters I think Bitcoin would function perfectly fine even if every single coins owner was well-known people would still own Bitcoin if it meant that you had to you have to have your ownership known I think it would still they use it because I think it's the hardness that is the value proposition it's not the privacy in terms of vulnerability to hacking I think of course the this is kind of unfair because Bitcoin is very new and the people who use the technology are still learning how to use it so it's natural that people will have all these growing pains and of course you know the infrastructure for handling Bitcoin better at an individual level and an institutional level is still in an infant stage and so also it's not fair to dismiss Bitcoin out of hand because you know it's still at the point where we're developing those technologies in terms of value volatility again this is an issue of maturity Bitcoin has only been around for ten years and yet it went from just a bunch of codes written on an email list to being worth around what two hundred billion dollars in total right now which is no joke now 200 billion dollars is no joke but it's kind of a joke on a global scale of the in total Globes money supply it's about 0.2 to 0.3 percent of the world's entire money supply there are people out there who own billions of dollars and if one of them decides to buy a billion dollars worth of Bitcoin they're going to eat up the order book in all the Bitcoin exchanges and that's going to cause the price to be very volatile because the liquidity is so small because this thing is embryonic the size of the order book the depth of the order book the size of the liquidity that's available though is obviously not very large and the size the people that the size of the money that wants to go into it is much larger and so these movements in and out are likely to have a big effect on the price but over time as you would expect a bit going to mature further as you would expect that the liquidity would grow you know if it's gone in 10 years from 0 to 200 billion well let's hypothesize that in another 10 years it goes from 200 billion to 2 trillion which is not that far of a stretch it's only 10 times but if it was a 2 trillion dollar market then it's going to be far less volatile because then you're going to have a very deep order book and individual transactions won't be able to move it and eventually you know a monitor is a monetary system a monetary medium gains stability in its value because of the fact that it is it has an enormous number of people selling and buying it at the same time and so bitcoin doesn't have that yet but it is building it and there's no reason to suppose that it won't be able to build it we're just witnessing more and more liquidity being added onto the system and I think this is going to continue on with respect to the point 5 on the cost of transacting I think this completely misses the point and unfortunately shows that Professor Celgene did not prepare for this debate by reading my book and very disappointed because I've read a lot of his books and I should say I've learned a lot from his books and I've learned a lot from his work but the the point is that people compare the cost of Bitcoin transactions to your credit card transaction or a or you know your bank transfer and I think that misses the point because when you're actually making a payment with a credit card transaction you're not actually or with any kind of PayPal or venmo any of those things yes you're making it instantly and yes it's very cheap but it's really just an entry ledger at PayPal that is says money went from a account a to account B the actual final settlement of that transaction takes many more weeks and what bitcoin transactions are more comparable to is the final settlement transactions that happen between central banks and financial institutions because those transactions are final you know that and these transactions take much longer time to settle than Bitcoin but we can provide you finality of settlement across international borders within a couple of hours well but if you wanted to send money across international borders central banks take many days and weeks to settle payments between one another one another so bitcoins payments the base layer of Bitcoin the on chain transactions cannot really be compared to individual consumer transactions because of the cost but also I think more importantly there is no such thing as an instant Bitcoin transaction you should wait at the very least for two confirmations on any particular Bitcoin transaction but it's more advisable to wait for six confirmations which is about an hour and that makes it completely unusable as a commercial payment technology but that's fine because commercial payment technology is not a big problem it's a problem that has been solved by paypal and venmo and credit cards and it's the technologies for this are many and porting them over on top of Bitcoin is largely a trivial problem we can have Bitcoin backed credit cards in Bitcoin backed PayPal and we can have Bitcoin packed backed venmo it's pretty straightforward functionally and there's nothing that prevents it in other words if you stop thinking of Bitcoin payments as compared as being like your ven mode or PayPal transactions you realize that PayPal and then will can function on top of Bitcoin and all of the features that you don't like about Bitcoin that you like about venmo can be essentially ported over to Bitcoin by replacing the settlement transactions of a bit of PayPal and then more instead of them being carried out with Dollars and fiat currencies they can be carried out with Bitcoin and so you know does this introduce reliance on third parties potentially the Lightning Network is a solution that is going to minimise the reliance on third parties but it will never have the same level of trust lessness that the on chain transaction has but that's fine because the competition for second layer trusted Bitcoin transactions is not first layer Bitcoin transactions the competition is second layer trusted transactions over highly inflating currencies run by governments highly sensible and that's really the key point so don't compare Bitcoin with your credit card because your credit card can be added on top of Bitcoin but a credit or a PayPal or credit card payment done based on dollars is inferior arguably to a Bitcoin based payment because the Bitcoin is the harder money and that I think is really the the key value proposition and so if you compare Bitcoin to some sort of idea we can always nitpick about things that are bad about it but in reality compared to the real alternatives that exist today Bitcoin is the only one the only one that offers is the chance of having a monetary system free of government control the only one that offers it's a chance and I'm not saying it's going to necessarily happen but there's it can resist government capture and there's nothing wrong with its monitor properties that can make it that would prevent it from becoming a main medium of exchange of a country the Bitcoin supply being fixed is not is not a disadvantage it is the main advantage and I would say to people who are skeptical about it you know we should think you should think about why is it that gold became money why isn't it silver or copper or other mint became money and that's something I discuss extensively in my book gold became money because it is the hardest metal to who's who supplies the hardest to increase it's hard that the new supply of gold every year is tiny compared to the existing stockpile which makes it ideal as a monetary unit because the vast majority of demand and the back for Bitcoin is monetary and because the variation in the supply and variations in the production conditions are largely irrelevant to the market the market is largely monetary so Mises discusses gold as a monetary good and he says one of the drawbacks of gold is that it has industrial demand and that there is variation in its production because that prevents it from being a purely monetary good and a purely monetary good would be a good that is bought purely for the purpose of being held as a cash balance and demand for it is driven by time preference in people's changes in time preference that's what an ideal monetary good and Bitcoin in this regard even improves on gold because it doesn't have other industrial uses and that actually makes it even more suited as a monetary medium for for for an economy and I think you know the the test of the market has shown over the last 10 years Bitcoin has grown compared to every currency in existence so the score has been highly favourable for Bitcoin right now and I don't see why any reason why things could stop and I don't see any coherent explanation for why Bitcoin would is fundamentally unsuited you know there there might be problems that happen with Bitcoin Bitcoin might fail but I think the idea that it is unsuited is unfounded and I remain unpersuaded by all the arguments that Professor solution presented thank you five minutes of rebuttal you want to take the podium five minutes of rebuttal yes well first of all I let me say that as much as I like the idea of privatization of money even if I were to admit that bitcoin is the only hope for such privatisation I might still maintain I would still maintain that unfortunately it can't cut it and that's that so those are two different issues so the fact that it's the only possibility if we grant that doesn't prove that it's going to in fact succeed one of the things I'd like to rebut is the suggestion that's that safely made that the fact that the value of outstanding Bitcoin has gone up so much is a measure of how much progress it's making towards becoming widely used money the capitalization of Bitcoin and how extensively it's used as a means of exchange a means of payment are quite different things they're really mostly unrelated Bitcoin can be very very valuable because of the investment demand being high for it and yet it may not be used often at all in exchange and in fact we know that bitcoin is not widely accepted in exchange for normal exchanges it has a fairly good demand at least relative to other uses for remittances internationally but even there it faces very stiff competition from more established remittance means like Western Union but as a medium of exchange domestically it is really very very very small potatoes and the value of the outstanding stock of Bitcoin simply doesn't tell you otherwise is Bitcoin hard money in a sense it is the absolute amount is limited and in that sense it resembles gold or some other precious commodity it has an advantage over gold and not having a fluctuating non-monetary demand but there's also a disadvantage there which is that because there's no non-monetary demand for coin there's no basic fundamental demand for it independent of the demand for it either for investment speculative purposes or as a medium of exchange the reason gold became money and became so popular as money is because it was valuable before it became money and that was a very important reason for its popularity by the way when gold displaces wampum that's not proof that a currency can take place of it take over and established incumbent money even though the incumbent money has a larger Network in fact the gold traders were coming from big networks and you had two networks coming together right two economies that now become in come into contact with each other the larger economies network now becomes more important than the small economies network so final settlement this is the most important point I'm afraid I did read your book I'm afraid you're quite wrong about final settlement Zell venmo the real Times payment system that's just been set up these last two years by the New York Clearing House Visa MasterCard these all involve instantaneous payment clearing and settlement it's all done instantaneously whereas with where with Bitcoin even if you tried to create a sub superstructure of other payments vehicles on top of it at bottom those six confirmations have to take place with all the sluggishness involved before payment could be final it's the nature of the blockchain so there is no way that you will ever have the speed of final settlement with Bitcoin or the low expensive accomplishing it then you can have today with all kinds of other monies and in fact you have with most of those monies and everyone has got to think hard about what it's going to cost them what it would cost them to switch to a Bitcoin standard in their day to day payments every you pay for anything you either wait a long time or you pay a lot or both and stop thinking about whether the value of your bitcoins gonna go up and think about it as a medium of exchange think about it from the average point of person's point of view and ask yourself whether this is likely to be so attractive that the average person will want to switch even if it means going having to not deal with a lot of traders in the short run I don't think it's going to happen thank you so professor Celgene in his reply said two things that I think the contradiction exposes the problem with his argument he said gold became popular as money it the fact that it was used for industry and that it was used for jewelry is what drove demand for it and that's what allowed it to become popular as money and that this had a stabilizing effect on the value of gold and the Bitcoin without a stabilizing demand other kinds of demand won't have that stabilizing effect but then later on he was describing how the value but but I think this describes what and then when he talks about the difference between Bitcoin as a store of value and a medium of exchange I think this is opposes that there is no dichotomy there and there's no difference in fact the functions of medium of exchange and store of value are descriptive functions of the same thing you can't be a medium of exchange without storing value because that's you know and you can't store value without using something as a medium of exchange if you're storing value in something you're going to exchange it at a future date so it is used as a medium of exchange so those two things are two functions to describe the same thing and the key point is that it is precisely the fact that the growing and that's the original point that this is the contradiction we said you know just because bitcoin is worth two hundred nearly a billion dollars doesn't mean it's being used as money that's exactly what it means it means people are using it and they're holding on to more cash balances with it and as the cash balances in Bitcoin grow or as the value of jewelry grows or as the value of held the gold grows then the possible opportunities for trade begin to emerge more and so now yes within the u.s. bitcoin is not used but within the Bitcoin economy on the internet Bitcoin is already bigger than most national currencies and so it doesn't have to be bigger in any one particular country it just needs to be growing all over the world and as the demand continues to grow as people continue to hold it more as a store of value like this inevitably means that the opportunities for trading with others who also hold it as a store of value would be willing to accept it or will be willing to use it as payment these opportunities will likely increase more and more and so right now you know 200 billion dollars worth of Bitcoin distributed over let's say 1 million people around the world that means that for the mass majority of us it's highly unlikely that you're gonna want to buy something from somebody who's willing to accept Bitcoin at this point but when Bitcoin is worth two trillion dollars that equation changes people will have to spend more of it because they will need to make payments people will have to accept as payment will want to accept it as payment and so really it is the hardness it is the use of the store of value that is going to build the cash balances that would then allow for its use as as a means of payment more and more extensively just as was the case with gold and yes maybe the seashell network was smaller but remember in the 1860s silver was arguably more widely used as money than gold up until the early 1800s China India and Germany three major economies and much of the US economy we're using silver as money and all over the world people are using silver as money and yet silver was effectively demonetized by the 1870s because everybody switched to gold because gold was a hard there money that is ultimately what it comes down to and I see nothing about the problems that Professor Sam didn't mentions in Bitcoin that would prevent it from having this and I think the notion the the the professor Celgene says you know we are going to be losing the if you're going to be he's comparing it to the clearance that is instant but that is clearance that is instant and final on the database of a government central bank and so you know if this is not really a free-market money and that is the problem with it it's a it's there is no possibility for having a through free market in an economy if the one half of every transaction is controlled and owned by the government and that really is the problem with central banking and that is the problem that Bitcoin solves by making the final layer of settlement instead of it being one political institution controlled by governments it makes it into a distributed protocol distributed over thousands of nodes around the world that cannot change the monetary policy and cannot be again cannot use political censorship against people who are using the technology and that really is the real value proposition and I think if you think of it just purely as a technological tool it's clearly an example of you know a bicycle versus a car it's it's its current monetary systems they're using you know a centralized system where you have to basically tell the government every time you're spending money like you're a child telling their parents who keeps tabs on their you know allowance money and that's an incredibly inferior system to one in which we don't have to report to governments in which the final settlement does not require a government central bank to handle all of the clearance and that's really I think value [Applause] well thank you guys and now we get to the Q&A portion of the evening I want to start by taking moderators prerogative to basically clarify a question in my mind in terms of your exchange I mean we start with you safe it seems as though and Jorge can correct me in a moment if I got him wrong but that Jorge is basically saying that that there is no way for Bitcoin transactions to be cheap and speedy that that that it's simply inconceivable and so you know we take a credit card to the store they swipe it in a moment I mean the old days they used to look it up in a book they'd look up the numbers of the book it took a while and if you old enough to remember that but now it takes no time and the expense of the transaction is small and so it doesn't impede us if our you didn't are you saying that George is mistaken to say that transactions such as you go to the store and you buy things that those transactions can in in Bitcoin can indeed be speedy and and very cheap your tech take them back in they you can make these transactions based on Bitcoin and settled Bitcoin at the back end so in other words the Bitcoin transaction is better compared to the final settlement of physical gold between two central bank's so our choices before Bitcoin was invented was either we're going to have essentially one world government running one central bank for the world and deciding on everyone's you know who gets to spend how much and who can spend money anywhere or we'd have a neutral political a politically neutral international monetary system built on a neutral asset like gold and the problem with that of course is that you have to log gold bars around the world and ship them and that's expensive and insecure Bitcoin allows us to do that but instead of lugging gold bars we send the transaction that costs a few cents or a few dollars but the point is the cost of a Bitcoin transaction could go up to ten thousand dollars and it would still be a bargain compared to the final settlement of physical gold that's what it really compares to because well you're not getting any final settlement from your credit card company or from your banking for your central bank because it's all fake money effectively it's all just a data entry at the Central Bank and the central bank can take your money away any moment but bitcoin offers you a hard asset that is nobody's liability so it's more comparable to gold settlement alright but again I'm not clear that you that you face is you've gone into the other advantages of Bitcoin as you can see with them but but again you are claiming that I can take I think I heard you say I can take my big Bitcoin Visa card and and buy some toilet paper at Walmart and and the transaction will be very speedy and very cheap well you can you can sort of do that already because there are some companies that issue credit cards that can you can back them with your do that alright that's fine okay and and and do I understand you correctly joy to say that that's can't happen the criteria for speed of payment in is how quickly the payment is cleared and settled in the final payment medium then all the verification that Bitcoin requires all the confirmations has to be have to be completed before the payment is truly complete yeah and that's what costs a lot of money it it costs money because it's a all that computing power goes into it so basically every transaction with Bitcoin you you're paying these fees because of all the computing power that goes into the verification which takes time and a lot of money and that's all going to be added to the cost of any kind of payments in a Bitcoin system you can't evade that with credit cards because ultimately the verification has to go through as the final layer of the final process of the payment whereas with ordinary money with dollars we now have ways to do instant payments on a number of different networks and they cost practically nothing and the clearing is done instantaneously it's true that the final and the clearing and settlement are done instantaneously it's true that not all payments but many and it's getting to the point where it'll be everything the it's true that the final settlement often not always takes place on the books of central banks and so you do have a trust issue there's no question about it I'm not denying that if the proposition where Bitcoin is the only thing that could take over from central banks and be absolutely absolutely non government dependent then the answer might be yes but that isn't the proposition the proposition is an empirical proposition is Bitcoin likely to actually take over from any government money the proposition is whether it is suited suited to okay to take that it's likely we're not discussing problem okay fine whether it's well suited to take over from any established government money which requires that ordinary people in large numbers of them who don't necessarily consider getting away from government money as their prime goal will nevertheless jump on this Bitcoin bandwagon despite its many disadvantages including the fact that it's very costly to transact okay so again that's missing the point the Bitcoin can do more than about half a million transactions currently daily and that's nothing that's less transactions than happens in Soho in Manhattan every day probably well so the notion that we're going to have all of your transactions on Bitcoin is a complete non-starter there's only really any ways but point is those transactions will be like the final settlement transaction so instead of having a global monetary system which ships 100 international shipments of gold around the world we can have an international monetary system that is built on and half a million Bitcoin settlement transactions around the world okay finally okay in Georgia you're yours the difference between you again I'm just picturing the ordinary person going to Costco Walmart wherever we go and I'm gonna buy the equivalent of like a hundred 20 bucks worth of groceries and and and and and paper and and you're saying that the cost of that hundred twenty dollar transaction is going to be a huge piece of that 120 bucks so that it's going to be prohibitively expensive that's what you're saying George yes 120 bucks in less smaller the transaction the the greater that hundred twenty bucks what do you think it's gonna be like 10 percent it's gonna be it's well it's very difficult to say because part of the problem is it fluctuates all the time depending on the computation this this is all a big misconception because if your $100 payment to Walmart is not going to register on chain Walmart is not gonna wait for six confirmations for an hour before they give you your groceries just like the you know if you're making an international payment you paying to somebody in China they're not gonna wait until the central banks settled the final payment before they ship you this stuff so in fact the your grocery payment will be part of thousands of transactions that will be settled between your bank and Walmart's bank in the end of the day and then the even if it was a thousand dollar transaction fee for a hundred thousand transactions probably it is gonna be worth it that's the key thing if you think of the final settlement transaction as a settlement proxying for many then yeah you're not gonna pay the transaction fee on $120 the transaction balance it's it's it's not accurate to continue to portray this problem and it's it's a bunch of propaganda that has plagued Bitcoin because of you know people who got emotional question only other questions are you George I had somebody transfer some Bitcoin to me just last week just to test this and in fact for $10 transfer what did it cost Jeff yeah yeah a dollar for $10 transfer that wasn't hypothetical well just did it maybe it's scalable Josh but my question for you George is this as well let's imagine that we we have a recurrence of what occurred in the late 70s even though worse you know the government the Treasury debt is ballooning the government starts pretty outcome and so it's printing money we we suddenly have what Greenspan anticipated could happen around 2030 inflation really heats up with a dollar the euro is unstable they're very wobbly so so exactly what we fear central banks are going to do which is inflate the currency starts to happen does that change the ball game at all from your standpoint with respect to Bitcoin if that would have happened well if you have enough national currencies all going blotto at the same time telling the Yerba well that still leaves let's see we've got the franc other alternative flame to the pound okay all right those I think that those would have a better chance than Bitcoin because they would be less costly all right but actually I would think the Canadian dollar would be more convenient okay you didn't mention that one I didn't the canook buck is gonna rule I guess that's your answer okay well I guess I'll look forward to that and you do have an answer for that safe good luck only a Canadian dollars okay all right okay okay and guys at any time you have the opportunity to fire a question at the other but maybe as usually happy just a little more serious answer just you know the path of government money only heads in one direction supply increases value drops and Bitcoin doesn't have that so it's if it's unsuited for you today you know let's check back 20 years later when Bitcoin supply has only gone up about 15% from where it is today whereas you know government monies have gone up 20x from where they are today on average and then imagine the overvaluation that will happen with Bitcoin compared to good national currencies and then think about what you know how easy it will be for people to get over all of your objections to Bitcoin when you compare the devaluation that is happening to the alternatives okay we I think we have good questions from the audience because I think neither if you want to fire a question at the other at the moment and so please ask your question ask the question and tell us who you're addressing it to if anybody so for for doctor I must you know one of the one of the questions was you said the hard money always drives out the soft money so gold drives out the seashells and professor Celgene tried to say that there's a difference between a store of value and a medium of exchange and so this was a misunderstanding on his part that really in the end there the the same the the better store value will be the medium of exchange will win so my questions about US residential real estate seems to me it's a very good store value seems to me there's a lot of Chinese and Russian billionaires that agree with me and buy u.s. residential real estate as a store of value it isn't a very good medium of exchange in my opinion so I I'm gonna go have sushi dinner with my wife we're not gonna pay with apartment Reid shares when the check comes we're gonna pay with dollars it's pretty tradable it's probably less volatile than Bitcoin don't you think does it do you really not believe there's a difference between do you always think the hard money drives out the good the gold is harder money than the dollar but we use dollars not gold for for paying for things you're cute are you gonna stick on this point it seems to me professor soldiering makes a really good case I'm gonna stick to it because actually the only reason we still use dollar the fact is that all the central banks in the world still continue to hold gold if we're using dollars they just dump all of their gold on the market and that would be the end of it but they don't because the only reason their money and you know they don't trust each other's paper they realize that the paper can be inflated to no end and therefore they only hold gold amongst themselves that's the first point to go back to your original question functionally speaking yes when you when you store value in your house you are also in a sense functionally using it as a medium of exchange but of course the house is a crappy medium of exchange and sorry excuse my language but it's also very bad a store of value because it's you know obviously it's good because it's hard it's harder to make more houses it's harder to inflate the supply but as you said it's very hard to pay with you know a chunk of your house when you need it and it's not liquid and it takes a lot of time to sell and you know moving in and out of a house is very expensive and very costly but the reason people are using real estate as a store of value the people the reason we have endless real estate bubbles endless art bubbles endless bubbles in everything is because people are using all of these instruments like stocks and real estate and art as a store of value because we are legally banned from having a good money we are not allowed to have a free market money because government restricts the Mavi market for money through central bank monopoly which means that as an individual if you want to hold money you need to hold money that is liquid across the world today so you want to hold dollars or your national currency because you need to pay with it and or if people outside the US you know they need to hold their national currency they need to hold the dollar if they want to pay abroad and if they would like to hold something that will hold value across time they need to hold gold or real estate or so on and so as a result we need to use several things as a store of value and as a medium of exchange because we don't have the one good thing that would do this job there was no real estate bubble happening on the gold standard because people weren't using their houses as a store of value if you wanted to store value you bought gold if you wanted a house you bought a house I bought some you George or do you want to pass the question you want to comment or you want to pet there were some real estate bubbles under the gold standard when well for one thing in the 1920s was a man that was not under the gold standard it certainly was no the gold Snider was suspended in 1914 and it was the suspension of the gold standard that led to the depression in 1929 they were back on gold they were bad she said it was a crappy gold standard I thought you that was your big point Joe so also the crisis was they went off the gold standard to print money in the 1920s okay we're gonna we're not gonna resolve that one next question primary doctor I moose my understanding is that in order to transact a Bitcoin like a single $10,000 Bitcoin the thousands of participants have to solve some mathematical algorithm which requires a lot of computation Yuuka hashes whatever those are and this is getting very expensive is it seems to me that the want the whole Bitcoin transaction procedure kind of strangle itself by just becoming so expensive that we can't afford to do these computations anymore is the Soho for I'm going to become so popular that we can't fit people into the place and then it's no longer functions if it becomes popular you know it's not gonna fail because of too much demand I think that's just a misunderstanding of how economics works if people are demanding the transactions and the value of the transactions going up and Bitcoin continues to refuse to die as we've been getting told by a friend in full four years that that's what's going to happen because of transaction fees perhaps it's time to revisit your priors and think about whether actually cheap transactions is the point of Bitcoin in fact it's yeah it's gonna require more and more energy and it's gonna become more and more expensive but it's gonna procs each more you know it's gonna proxy for more and more transactions so it'll actually be cheaper per transaction over time as more and more people continue scalable yeah coming from you George do the question would you want to pass and go to next okay next person yeah what do you think is gonna be an impact of regulations and why do you think that bitcoin is cannot be confiscated by the government well there were a number of cases when if coins were confiscated and when they facing life sentences recently probably might three call your private the key is pretty fast I guess it's a challenge to save so I guess safety will have you will have you come in I'm I wouldn't say it can to be confiscated I just say that it's much harder to confiscate than say gold because gold requires physical settlement and clearance which ends up because of the economies of scale involved ends up with you know one central bank in every country and so taking over gold was trivial in 1934 for the US government because they just banned the banks from using gold and they took over the gold that was already in the banks it's much harder with Bitcoin because instead of having one central bank you're gonna have thousands of nodes and so it's you know I'm not saying it will or it won't happen we'll have to watch and see but it has a much better chance of resisting capture than gold does comment George I've tried to steer clear from the the question of what governments might or might not do because it's of course possible that governments could themselves interfere with Bitcoin and make it less likely to succeed but I don't want to appeal to that possibility in this debate because I don't think it's really the relevant question don't vote for Georgia and that basis is what he's saying to you so the next question yes for professor Celgene of the three monies discussed tonight commodity money which is gold fiat money which is issued by governments and free market digital money Bitcoin we know historically why the first two or how the first two were adopted as money we're watching Bitcoin struggle to be adopted as money as you your position seems to be can you articulate a path that any new money of any form would need to take in order to be adopted as money and how can you be sure that the path Bitcoin is on is not taking the path of least resistance for some brand new money yeah that's a good question the the fact is that once you know Menger to talk a little bit about the theory here for me carl menger the Austrian founder of the Austrian school developed the most famous theory of the origins of money which explained how you could get commodity money from a situation where there was no generally used medium of exchange and so fascinating theory that same theory also explains the network problem that is it points to the fact that once something is established as a generally accepted medium of exchange in any community it's very difficult for something else to them get established the horserace having been run it's very difficult for anything so I'm not actually when I emphasize them the network problem and not really trying to say this is a prop that's a problem for Bitcoin it's a problem for any upstart currency and so they're all equally at a disadvantage in that regard but then the point is if such an upstart is going to try to get a leg up and it can under the right circumstances where the incumbent currency is distrusted depreciating there are many things that could make it make tempts people to take the risk of joining a smaller network and taking their chances with it but then it's a question of how relatively attractive the upstart is compared to the incumbent it has to be fairly attractive in a lot of dimensions and that's where I think Bitcoin suffers because in some crucial respects it has real disadvantages compared to other potential alternatives including gold by the way which hasn't come up enough in this context I think people will be more likely to use gold in an emergency would say the the euro and the dollar and the Canadian dollar etcetera are all going to plop that gold might have better chance of taking off than Bitcoin because despite its clear transactions cost of moving it around between it and claims to it it could have advantages compared to bit that Bitcoin lacks you'd mentioned cryptocurrency George you still cryptocurrency that you could like or do like aside from Bitcoin I won't mention particular names there are that it's so experimental at this point that there are some others that I think have advantages I will say that the second most popular aetherium has some of the same disadvantages as Bitcoin as far as transaction cost I think that it has roughly can handle roughly twice as many transactions that's not a big difference so it also has that that problem of high of a scalability disadvantage but some of the others may be better'n on those at that and other grounds a distributed network is going to inevitably be less efficient than a centralized network if you're gonna have one computer with a backup record the transaction it's much easier so on my laptop there's software that I could download that would allow me to run fifteen thousand transactions per second you know I could run a payment network on my laptop and do fifteen thousand transactions per second it's trivial the problem is my laptop is not very reliable and so you're not gonna build an international monetary system on my laptop however ten thousand laptops connected to one another is going to be very slow and very cloudy and very inefficient but it's reliable as and it's more reliable than anything else it's really reliable and so the notion that we are going to continue to judge cryptocurrencies by their speed is completely I think misplaced it's not it's never going to be able to scale to a scale that allows us to have mass consumer payments it's out of the question and you know we've had a few experiments with some of the altcoins they forked bitcoins code and they made the Bitcoin with a bigger block size and now nobody uses it and the coins are dying a painful slow death and it's just proof that this thing is not gonna be used for mass consumer payments it's never gonna work now I have to ask my question okay which is how can something be the main medium of exchange of any economy and not be used for mass consumer payments these are the same thing it's really hard that you're missing the distinction between something being used as a medium of exchange and something being used as a means of payment so in order to simplify this if I make a payment to Professor Celgene right now with PayPal what is the medium of exchange that we used the dollars yes not PayPal PayPal is the method of payment and the be cash people have made this such a big misunderstanding with all of the propaganda that they've done that people have missed the distinction when you're making a payment with PayPal you're using PayPal as the method of payment but the medium of exchange is a dollar and no actual physical dollars were harmed in the making of that payment so at the end of the week or the month my bank and your bank will settle with one another and you know there might actually be physical gold moving around between a physical money moving around between the banks and the central banks but we have to understand the distinction between the settlement layer and the consumer layer and so continuing to compare Bitcoin to the consumer layer misses the point because there's no way Bitcoin will ever handle one percent of the transaction that visa can handle Visa is just always going to be much faster than Bitcoin but that's fine it's a completely different engineering problem and so these are PayPal all of those things can are completely orthogonal to Bitcoin dollar gold and Bitcoin that's bitcoins competition these are PayPal and so on they compete with a lightning Network as settlements as payment solutions so there can be Visa PayPal bitcoins what you're saying okay yeah our next question thank you both for this fantastic check out saves book it's fantastic to either of you there's talk about clearance settlement if I were to take my dollars out of my bank account and put those in my safe in my house I now have those I mean those those are settled and cleared right in other words I own those is that right I mean could you guys perhaps speak to this idea of final settlement and clearance because in my mind there is no such thing as final settlement with a fiat currency because at any point in time take the indian $20 take the 1933 gold confiscation i mean there is no such thing as final settlement so the time to settle in a US dollar is i don't think it ever occurs and so in that regard I think Bitcoin settles at an exceedingly faster rate and perhaps you could speak to that thanks safe agrees with what you just said yeah do you agree too George oh I don't agree no there really is such a thing as final settlement it's I mean it's two different things here one is whether the government can grab your stuff that's one issue the other is whether it's such a thing as final settlement in the dollar Fiat system and there is and it occurs when the when the actual that when actual ownership of base dollars which are either cash or or credit balance on the in the reserve account at the Federal Reserve Bank has made its way to the bank that handled the transaction and that's finished when no one knows when no one owes anything anymore then it's final that's that's a great way of putting it when nobody owes anybody anything anymore then in the transaction has settled but that's not the case with your paypal payment it takes much longer for it to settle and so that's why that's what bitcoin is up against it's up against the bank's settling with one another in the central bank settling with one another and as as he mentioned the effect of real settlement time in fiat is infinite because you never know ten years later you can come and take your money they don't have to come and take your money your money is there so you just have you know they let you take it out and then occasionally but if it's effectively government money and government can confiscate it at all times so bitcoin is a massive improvement in that regard because it allows us the access to base money to be far more widely distributed and decentralized and available for more people next question hi thank you both professor you said in your opening that because centralized exchanges have been hacked somehow that makes Bitcoin the network vulnerable to hack considering Bitcoin the network has an uptime of ninety nine point six percent I'm just a little confused how the two are related you said that because the centralized exchange roping statement you said the centralized exchanges have been hacked which is true I think we're all aware of many you know hackings that have happened somehow that makes Bitcoin the network vulnerable to hack as well but my question is considering that Bitcoin the network has an uptime of 99 percent I'm just a little bit confused have one however had their equitable well I never said that the Bitcoin network was vulnerable I only said that the exchanges were vulnerable but that's where a lot of people keep keep their money much of the time so the the question is whether the storage facilities are vulnerable compared to the storage facilities for established monies like the dollar which would be banks and that was the comparison I made that's different from network vulnerability and I've readily concede that finally this unfortunate he's gonna have to be the final question of the evening I'll be very quick then say if I saw you speak about two years ago and I wrote at the time that you gave the most plausible case for the mass adoption of Bitcoin that I've ever heard and I agree that it continues to be I also wrote at the time that you characterized it as inevitable I didn't hear that tonight and I'm wondering whether I misunderstood at the time or whether you've lowered the probability in your mind if it happening I've got an older and I've got more gray hair and I've learned to be less certain about things in life to the kids who acted on your advice thick that's funny all right through it yeah yeah the resolution is just has to do with suitability and neither side is talking about inevitability George is saying that nothing's inevitable with either of these guys so we've clarified that suitability not inevitability is the resolution I will give it one front one final question yeah so my question is do you think that the portion of Bitcoin that is used as a speculative asset is significant and how would it affect it becoming a medium of exchange I think all bitcoins are used as speculative assets and that's fine money is a speculative asset and you know speculation gets a bad rep because you know it's always blamed by governments you know whenever inflation happens it's always because of the speculators and the evil foreigners or whatever but really speculation is what you do every moment of your life you're speculating on economic activities and you're making decisions on it and holding money is a speculative act because the only reason as Mises explains the only reason people hold money is because of uncertainty life is uncertain and therefore you have to hold money because you don't know what you're going to be doing or what you need to spend in the future so in that sense you know Bitcoin being speculative me holding Bitcoin speculatively is no different than holding dollars or anything else it speculatively you hold it so that you can exchange it in the future for something else and you hope that you can get a lot for it it's no different when you do it with dollars and bitcoin is just Bitcoin is you know it's going through the process of monetization at a very fast rate so at this point Bitcoin can be better thought of I think as sort of like a seed investment in a startup that is planning to replace all of the world's central bank and you this startup is a sort of a self-organizing spontaneous startup that you know instead of shares it has the own Bitcoin coins and instead of having a management it just has a bunch of algorithm that will take the value that would issue new coins and provide it to the people who secure the network and you know it's just this random and not random this spontaneously emergent organization that's going to eat all the central banks of the world and if you buy a Bitcoin right now effectively you're feeding that monster and you're speculating on the monster growing further so it is it is more of a speculative asset than just money right now but that's fine that's how we're gonna have to eat central banks George you want to respond with your party's summation okay five minutes of summation or do you want to insist on an answer Oh take you to the podium with your five minutes for summation is all right all right it's good okay I was going to say very briefly that all monies are speculative as as I said but some of them are more risky than others and that I say is the difference between Bitcoin in a lot of established money's but it's by way of summary I guess all I really want to insist upon is the fact that when when ordinary people when ordinary people which excludes many of you when ordinary people think what should I watch what what what kind of money do I want to equip myself with what what should I use as a medium of exchange the answer again first of all is what's everybody else using what if there's a store down the street take what what do my workers want to get paid in these are the the mundane issues that are asked and they speak of the importance of established network size but beyond that they ask how risky is this stuff going to be to have on hand all the time do I risk losing a large percent of the value just while I'm waiting to do my shopping is it going to fluctuate a lot do I have to make all kinds of elaborate plans to protect myself finally they're going to ask every time I shop with this how long is it going to take for my payment to be complete and what's it going to cost me how they're gonna is there gonna be a an art substantial fee extracted from every payment to cover the costs of verification etc do I have to pay extra if I want it done quickly if I sure the payee that the money is going to be there on time these are the questions people ask and if their aunt and if the answer is that an established currency is more attractive on many of these scores than an upstart the upstart has no chance if the answer is that the established currency isn't all that attractive but there are other currencies with large networks that might be used instead they're going to have a better chance than that new currency and for all these reasons bitcoins odds its suitability if you prefer since we're talking about that its suitability to take over as the main currency of any country is very very poor I hope the private marketplace will come up with new alternatives potentially new cryptocurrencies that beat Bitcoin in many of these respects and make for a better alternative to established fiat money's but if we stop now if we say Bitcoin or bust I think it's going to be bust I mean ultimately I think I was some up and say that you know the the Freudian slip fascist Alton said about you know the odds it's still thinking of it in terms of probability and I think you know he hasn't provided anything in terms of the actual suitability that could sway somebody to change their mind on this I think we went over the points and I don't think you know the cost of transacting is not an issue because it's not you're not going to be paying that transaction fee that transaction is going to be divided over many thousands of transactions the volatility is purely a function of the size and I think the same as in terms of the liquidity available in what is the neighboring grocery store using I see these as purely functions of bitcoins nation's bitcoins use and I would have imagined six years ago for instance if somebody had told me yet this thing is never gonna take o take over I think it might have made more of a compelling case because at that point you know Bitcoin was worth a few hundred million dollars or whatever but now we've seen it grow so much and we've seen how it has been able to handle that growth we've seen how you know security continues to work even as it grows and you know that there's nothing to suggest that it would stop functioning as it grows and then there is that means that basically there's there's no compelling reason why it wouldn't be suitable and the fact is Professor Selden goes back to talking about people's choices in this and whether people will choose it or not but that again is irrelevant to the suitability and ultimately the choice of money is not a democracy you know we don't get together and decide we want to use you know silver as money or gold as money or seashells as money it's cold hard economic reality that imposes it use a store of value that is easy to inflate and you will not have any value left so it's not even about your choice because if you choose badly you just don't have any more money left and then only the people who chose wisely have money left and that's how hard money works that's how gold drove out all the many other pretenders and the people who had that money you know their vote about whether they like gold's color whether they prefer Silver's color whether they prefer the network effect of their local seashells doesn't matter anymore gold one because they stored their wealth in an easy money and that easy money was inflated and professor Celgene is I think is missing the fact that this is what is happening all over the world you know with negative interest rates and with the inflation around the world it's just becoming harder and harder for people to be able to store value in their money in their national currencies and so bitcoin is um is essentially winning by default right now because nothing else is even trying to be a store of value because the world is full of Keynesian who think that store of that use a bad thing and that you know people shouldn't have a store of value because you know the government knows what they should invest in or whatever so in a sense bitcoin is already winning in this regard it is already growing and I don't see anything compelling to suggest and I think the the suggestion that you know hopefully other cryptocurrencies come about is you know it's it's been used to promote many thousands of cryptocurrencies but none of them has introduced any thing at all that Bitcoin cannot do there isn't a single currency other than Bitcoin that has done anything that Bitcoin can do yet and you know we hear so many promises and so many ideas but I think the key point is this as Professor Celgene is one of the foremost scholars who's written on money being free and on the free market and money I think the point is in terms of suitability I think it's clear that it is suitable it's already more suitable than most national currencies because it's already an economy much larger than most national currencies and the reality is this is it this is the only chance we have of a free market money we can argue theoretically in like you do in some of your papers about possible better models for bitcoins monetary policy maybe days are indeed better maybe you know having a money the supply that grows at 2% is better I don't think it is but you know even conceding that it is doesn't really matter at this point because that money is not going to come about we're not going to have a central bank implement an algorithmic rule it can't be implemented it can always be overrun we're not going to be able to develop something that is completely trustless anymore bitcoin was really a truly one-off experiment that can't really easy to be repeat and it doesn't need to be all of the people that are just constantly finding problems with Bitcoin need to just come to peace with it this is your only alternative to central bank's deal with it well thank you guys for a very spirited debate very lively and done you both behaved like ultimate gentlemen so you're both won tonight in that sense a very important sense we now want to open the final vote which you've done Jane opened the final vote again the resolution is Bitcoin is poorly suited to the purpose of becoming any nation's main medium of exchange both sides were dressing suitability that word said ability very important and so where do we send like okay we've got the final vote well okay poorly suited it is poorly suited to be a main medium of exchange the pre vote was thirty nearly 35 percent on that that was in favor of the resolution it gained a little over seven points to 41 percent so that's the number to beat George gained seven points on the other hand the no vote went from 28 percent to 50 percent so safe picked up 22 percentage points safe against the trophy [Music] [Applause] [Music]

Channel: ReasonTV

Views: 70,367

Rating: 4.8832893 out of 5

Keywords: libertarian, Reason magazine, reason.com, reason.tv, reasontv, Todd Krainin, Soho Forum, cryptocurrency, bitcoin

Id: MN4klUUx8fM

Length: 82min 39sec (4959 seconds)

Published: Thu Aug 22 2019

Reddit Comments

[u/[deleted]]

The guy to the left knows very little about sound money. This is not a debate, just another attempt to manipulate with words that have no meaning.

[u/Bruceleeroy18]

Guy on the left does not really know much about bitcoin or lightning network. Makes it very clear around 13 mins or so.

[u/veganic11]

It's amazing how professors can't be so misinformed and make such erroneous claims about something they clearly don't understand with such confidence.

[u/Jac_Ky]

Exhanges getting hacked has nothing to do with bitcoin , stopped watching after that bs. Nacho keys, nacho bitcoin.

[u/dietrolldietroll]

not really a debate. just an engineering problem being worked on.

[u/slamtrade]

thank you for sharing.

[u/xi27pox]

Seems like pure FUD debunking. Nothing new here.

[u/po00on]

Is this another one of those debates where the person arguigng against Bitcoin lacks any real deep understanding of the techniology ? This seems to be the trend for these types of things... and they serve only to frustrate those who have even a small degree of technical compentence