As the phenomenal growth of cryptocurrencies proceeds, and as fiat currencies in the centers of finance and around the world continue their long, slow slide into irrelevance, oblivion, and true worthlessness, RT hosted a short debate between Max Keiser and Steve Keen to discuss the merits of bitcoin.
Steve begins by stating that the price of bitcoin is rising only because people are rushing to jump on the bandwagon.
Steve Keen – “People are diving in because the price is rising. But that’s one of the definitions of a bubble.”
Max counters by asserting that bitcoin is both “a store of value” and “a means of exchange.” He adds that many other assets, including all fiat currencies, are in bubbles and set to implode – not least the almighty US$.
Max Keiser – “Bitcoin’s not in a bubble. The US dollar’s in a bubble. The fiat currency world is in a bubble. Stocks and bonds … are in a bubble.”
While Steve agrees that bitcoin can be seen as “a store of value,” he does not believe that it is “a means of exchange.”
Steve – “You’d be a madman to use it for transactions.”
Steve claims that bitcoin is not money, because people aren’t spending it; they’re holding on to it as it increases in value. (In the hope that they’ll get rich, he implied.)
He said anyone would be “an idiot” to spend bitcoin, because if you just hold onto it for a few weeks, you will be able to buy much more. Consequently, he believes the price will eventually fall “dramatically.”
Max – “We’re entering into a period of transition, where fiat money is effectively being replaced by cryptocurrency.”
Max believes that the price will eventually stabilize, once it reaches its true value in relation to fiat currencies. According to him, the change “from a store of value to a means of exchange is gonna take another few years.”
He points out that cryptocurrencies are being adopted because they easily outperform fiat currencies in most aspects.
Steve relies on the standard trope that blockchain technology is great, but cyrptocurrencies are flawed. That’s kinda like saying that the internal combustion engine is great, but cars are lousy methods of transportation.
Like Jamie Dimon and others who are happy with the current mess of affairs, Keen wants to apply distributed ledger technology (DLT, or blockchain) to outdated and failed systems. (Kinda like powering a horse with an internal combustion engine. It seems pointless and in fact foolish.)
Max – “Bitcoin is unique. … It’s gold 2.0. … The perfect cryptocurrency.”
In his closing remarks, Max rails against criminal organizations such as JPMorgan, Wells Fargo, and HSBC, saying that we have to “get rid of all those financial terrorists,” and that “bitcoin will do it.”
Steve – “The current rate of increase cannot be maintained.”
Steve is right when he states that the current rate of growth cannot be maintained. But everyone involved with bitcoin or holding bitcoin realizes that.
All in all, this debate is between two very astute observers of the current trends. Keen has appeared on the Keiser Report many times, and he and Max have had great discussions about various subjects. In this debate, each held his own, each presented his argument effectively, and each raised several valid points.
See for yourself.
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