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Top economists call bitcoin legal tender “stupid”. Here’s why he’s wrong.

Let’s not joke with ourselves, someone like Steve Hanke has a lot of incentive to defend the status quo. This has benefited him a lot. It could be argued that their livelihoods depend on the failure of bitcoin. A project to make it legal tender in any country directly goes against Hanke’s interests, and it’s no wonder he spoke out against it. The humiliation was over the limit, though.

We’re going to be on the high road and will answer all of its points elegantly. The tweet in question was this:

Is bitcoin a store of value?

Who decides this? people. If a person uses an asset to protect his wealth, it is a store of value. So the question is, is bitcoin an effective store of value? Well, given that it’s the only object in Earth’s history to present a complete reduction, it’s probably a safe bet. Make no mistake, though, it’s still a prerequisite. Bitcoin experimentation is an ongoing process and nothing is set in stone.

Related Reading | Why bitcoin declared legal tender could have major implications beyond El Salvador

No, One It’s a matter of stone. There will only be 21 million bitcoins. Supply is constant, so if demand increases, so will the price. Its as simple as that. To add credence to the argument, let’s quote Saphedian Ammos’s “Bitcoin Standard”:

Until the invention of bitcoin, all forms of money were unlimited in their quantity and thus imperfect in their ability to store value over time. Bitcoin’s immutable monetary supply makes it the best medium to store value produced by limited human time, thus making it arguably the best store of value ever invented by humans. In other words, bitcoin is the cheapest way to buy the future, because bitcoin is the only medium that is guaranteed not to be debated, no matter how much its value rises.

Did you know that 40% of all US dollars that have ever existed were printed in the last twelve months? This is what the debuggement looks like. And the whole world is feeling its effects.

Is bitcoin a medium of exchange?

Our friend Steve Hanke was replying to Congressman Carlos Rezala of Paraguay but, as you probably know, first country to approve bitcoin as legal tender El Salvador was. It’s no coincidence, because “A real village with real bitcoin uses in daily lifeRight there in El Salvador.

bitcoin beach There is also a main real-life use case for the Project Lightning Network. If there is one place where small bitcoin transactions are an everyday thing, it is this one. as Nasdaq As reported last year, when the project was still under development:

For example, in the major bitcoin village of El Zonte, you can use bitcoins to get a haircut, get your nails done and chew on some local delicacies (like some delicious pupusas). Soon, you’ll be able to buy a cup of coffee with it and go to the doctor’s office for a checkup.

If there is any doubt that Bitcoin Beach was the impetus for El Salvador’s historic move, Stephen Livera explains what President Bukele said on the clubhouse:

So yes, bitcoin is a proven medium of exchange with real life use cases. We can include the incredible amount of bitcoin transactions that the virtual world sees every day, but there is no need.

BTC price chart on Bitbay | Source: BTC/USD on

Is bitcoin a reliable unit of account?

Let’s admit it, the price of bitcoin is volatile. Why is it like this? Let’s quote the “Bitcoin Standard” once again:

As it stands, given that bitcoin accounts for less than 1% of the global money supply, large individual transactions in bitcoin can have a large impact on price, and small changes in demand can cause large fluctuations in price. Huh. However, this is a feature of the current situation where bitcoin as a global settlement network and currency is still a small fraction of the global settlement payment and money supply.

Bitcoin is still in its infancy. You can’t ask a 12 year old to behave like an adult. What does it need to grow? To nurture And since it is a currency, nutrition equates to widespread adoption. This is exactly what is happening, with all of these countries looking to emulate El Salvador in making bitcoin legal tender.

Related Reading | Time to Pay Attention: Bitcoin Indicator Behavior Mimics Historical Rally

If bitcoin becomes the world’s global reserve currency, volatility will not be a problem. And the entire planet would be an equal playing field as one country would not have the immense privilege of issuing a global reserve currency. And debugging it of your own free will.

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Avinash is a blogger, Enterprenuer, marketer and author. He is very good affiliate marketer and Product Reviewer.