@Duke of Marmalade Bitcoin is technology. First and foremost that is what it is.
What value, in monetary terms, is derived from bitcoin and the price attributable to that value is the economic side. Keynesian, Monetarism, Austrian, Classical, Marxism etc are all abstract political concepts of how economies, the resources within, should be run to greatest efficiency. They provide the theoretical basis why their way is the best way. Those agreeing certain generalities on a broad basis form a 'school of economic thought'.
Economists are not technologists, they are not physicists, biologists, carpenters, civil engineers, administrators, computer programmers, hairdressers, chefs etc, etc.
A chef is better placed to know if a new recipe, or a certain restaurant ambience will likely serve as additional value to a business than an economist.
A hairdresser is better placed to know if a new hairstyle or coloring product will likely serve as additional value to a business than an economist.
An administrator is better placed to know if a new process or procedure will likely serve as additional value to a business than an economist.
Etc, etc.
All an economist will tell you is, that if a new product, good or service, does provides utility and is more resource efficient than the old product, good or service then, in theory, it will add value. That value typically reflected in monetary terms.
But we all already know that. We do not need an economic school of thought to come to that conclusion.
So the argument is not that bitcoin is not technology, it is, but rather what utility it provides and the value of that utility. And then how the value of that utility is reflected in a monetary price. This is where the argument rages.
Roubini proclaims it has no utility, that is his entitlement. I disagree. But I will try not to open another round of what is already said and instead try to communicate what I think is a (very distant) threat to bitcoin - interest rates.
I consider bitcoin to be a hard form of money and fiat to be a softer form of money. The lower the interest rate, the softer the fiat currency. If interest rates rise, it signifies a reduction in supply of currency. Money then becomes more expensive to borrow, and the holder can extract a rental payment in savings. The higher the interest rate, the harder the currency. The big problem however with monetary policy as I see it, is that other than the knights of the high central bank table, no-one, gets to decide how this currency is managed.
The monetary policy of some 400million (?) people in the EU is ultimately dictated by handful of decision-makers!
Now if we assume that their decisions are construed from a rigid set of policy dictats, and that those policies are not easily convertible into new rules and policies, then that adds strength to the value of the currency they manage. But that is not the case, not at all. Policies are changed, bailouts are granted, stimuli injected, pension funds raided, savings confiscated, currency printed, interest rates reduced, etc - all done in the name of preserving the value of the currency. It remains to be seen how successful the policy management will be. I have little confidence.
In my economic school of thought, interest rates are an economic force. They are not something to be unilaterally decided upon by small cabals of bankers. But that is our monetary system, we have artificially set interest rates by central banks, and we have
real interest rates set by the economy in the round. By businesses and individuals engaging in trade, price discovery, supply, demand etc - this os what forms the
real interest rate.
So bitcoin provides utility, to me, by providing a space to transfer soft digital fiat form money, into hard digital crypto form money. It is verifiable, the network is hard, the rules even harder to change, etc. I have bought it, sold it, transferred it, even invested some and received a return in btc.
So that is its utility to date, for me, not Roubini.
Roubini needs to be called out when he says it has no utility and no use case. This is factually incorrect.
The price attributable to avail of one full unit of that hard verifiable digital space is around $34,000. It is my belief, that the greater utility use of this space then the closer it will become to being a widespread mainstream medium of exchange, but I think that is a long way off yet.
