Earlier this month, the European Central Bank (ECB) published a paper in which the authors claim that the existence of bitcoin could impoverish non-holders and newcomers.
Specifically, they wrote:
“Since bitcoin does not increase the productive potential of the economy, the consequences of the supposed continuous increase in value are essentially redistributive, that is, the wealth effects on the consumption of the first bitcoin holders can only occur at the expense of the consumption of the rest of the society. “
It drew the ire of many bitcoiners, including Frank in his Take… but isn't this essentially what hyperbitcoinization is? If bitcoin becomes the world's money, HODLers become the new rich elite while fiat bag holders would effectively be ruined, right?
I think the real crux of the issue lies in the first part of the quote. Many bitcoiners, including me, believe that bitcoin actually wanted to increase the productive potential of the economy. (There are several reasons for this, but one of the most important is that it eliminates the Cantillon effect of fiat currency, which greatly benefits governments.)
If in 2009 it had been possible to exchange all of the world's fiat currency for bitcoin so that everyone received a representative share (and therefore without redistributive effects), that would arguably have been preferable… but ECB economists still be against: they just don't see the benefit of bitcoin in the first place.
Since Satoshi Nakamoto had no way to exchange everyone's fiat money for bitcoin even if he wanted to, it makes sense that he launched the project the way he did, allowing anyone to adopt this superior money as long as it fits their appetite for individual risk.
If ECB economists believe there is a better way to distribute this new form of money, I would suggest they use their Cantillon-funded salaries to write an article about that.
This article is a Carry. The opinions expressed are entirely those of the author and do not necessarily reflect those of btc Inc or bitcoin Magazine.
