Why Bitcoin is Here to Stay: Q&A with Jerry Brito

Don't bet on the decentralized currency Bitcoin as a retirement investment, says Mercatus Center policy analyst Jerry Brito, but go long on it as the payment system of the future. Reason's Nick Gillespie talks with Brito, the editor of the new anthology Copyright Unbalanced, about Bitcoin bubbles and why governments are so afraid of this virtual payment system.

For Reason's archive on Bitcoin click here.

About 5.20 minutes.

Interview by Nick Gillespie. Shot by Amanda Winkler and Joshua Swain; edited by Swain.

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    Don't bet on the decentralized currency Bitcoin as a retirement investment, says Mercatus Center policy analyst Jerry Brito, but go long on it as the payment system of the future.

    Can you really have one without the other?

    If bitcoin becomes a real payment option wouldn't the value have to go up? Hard to imagine a broadly used world wide currency only holding a total value of one or two billion.

  • ||

    This is my question. Maybe it's not a "retirement investment" but, if it's here to say, any logical person should use an inherently deflationary currency as their long-term savings accoung.

  • 0x90||

    Let's stipulate that it is year N, in which no state-monopoly currencies have survived. What does bitcoin look like in this environment, when compared as a currency with various competing currencies, and when compared with investment instruments. I do not see how commodity-backed currencies can compete with purely fiat ones -- gambling is something you want to do with money, not something you want to do as a function of holding it. Therefore, I do not see something like bitcoin being capable of serving as good money. But it may still serve as an investment, and the question there is concerned with its desirability, relative to other instruments. Its main advantage here, ease of handling, is basically nonexistent, since part of the function of the market is to abstract this problem away. Its main disadvantage, then -- that it possesses no secondary intrinsic value -- I think, means that it does not survive at all in the long run.

    In other words, I attribute its desirability at the current time not to the fact that it is deflationary, but to the fact that its competition is guaranteed to be inflationary. I see its deflationary nature as a distinct liability, though, when the comparison becomes bitcoin vs non-inflationary fiat (meaning, exhibiting neither inflation nor deflation, due to proper management on the part of the producer) currencies, and intrinsically-valued investments.

  • ||

    Let's stipulate that it is year N, in which no state-monopoly currencies have survived.

    I fail to see this ever happening.

    Bitcoin at most would force them to behave a little bit better.

    Of course if that ever happens i have faith that the US FED will try real hard to abolish bitcoin.

    Anyway commodity backed currencies have a huge problem...which is that they get cheaper to produce over time...sometimes that price can drop really really quickly.

    What will happens to the price of gold when in year N they invent a bacteria that can mine gold from seawater?

    How much gold is dissolved in the oceans? 10,000 times more then has ever been mined? 1 million times?

  • 0x90||

    Or conversely, perhaps it is discovered that the cure for cancer involves annihilating 1 oz of gold per case. Small price to pay for a life, but good luck to the monetary system.

  • forestgombosi39||

    Brody. I can see what your saying... Earl`s blog is amazing, last friday I got themselves a Jaguar E-type since getting a cheque for $4865 this-past/five weeks and-in excess of, ten grand this past month. this is certainly my favourite job Ive ever had. I actually started five months/ago and straight away startad bringin home at least $87 per-hr. I work through this link tinyurl.com/d8v6duz
    (Go to site and open "Home" for details)

  • ||

    Hahahhahaha. After the bubble and crash in the last few weeks, nobody is going to use Bitcoin as a secure investment for a long fucking time. If Ever. It's a nice outlet for gambling addicts. No so much for actually buying and selling things.

  • Cytotoxic||

    That's what they said when it spiked and crashed before and they're saying it now. As much as you want it to fail, BTC appears to have staying power.

  • ||

    I don't want it to fail. I think it WILL fail, and I don't want libertarians hitching their star to it.

  • Arminda321||

    until I saw the bank draft saying $4410, I be certain that my friend was like actually earning money part-time on their laptop.. there neighbour had bean doing this for only 6 months and by now repayed the mortgage on their apartment and bourt a new Citroën DS. read more at, kep2.com

  • ||

    The "crash" being it returned to the price it was a few weeks ago? Gold goes up and down all the time.

  • ||

    Volatility is not a good quality if you want to use something as a currency.
    Currencies need to have a stable value.

    For instance, if you're trying to sell things in bitcoins, you don't want your customers worrying that they would be better off holding onto the coins themselves for a few weeks. You don't want consumers hoarding coins because they think the value will rise. You also don't want to worry that the bitcoins they will pay you are going to suddenly fall in value.

    You want people making actual transactions. And for that to happen, both sides of the transaction need to believe that the currency they are using as a medium isn't going to suddenly change in value.

  • Jayrod||

    There is no real bubble and crash, it's just very volatile. Unless you're trying to make money short term, which is dumb, most people will get back exactly what they put in if they just wait a bit. It's relatively small use leaves it more open to volatility right now... if it manages to grow, I'd imagine this becomes less of an issue.

  • Brett L||

    What's the buy target in April 2013 USD? That's the importat question.

  • ||

    $10 to $20...but I would wait for a few months for it to come down to that price.

    last year it spiked and did not bottom until 6 months later....if that pattern holds then there is no good buy price for April 2013.

    Of course long term like 5 to 10 years I would say any price would be good if you are willing to hold it that long....

    ...if the US does not shut it down, if it does not get hacked, if a better competitor does not come along that is.

  • sandrajacob2||

    my neighbor's sister-in-law makes $88 every hour on the laptop. She has been fired from work for nine months but last month her income was $14634 just working on the laptop for a few hours. Read more on this site

  • ParadiseMisplaced||

    It's a good explanation of Bitcoin (probably among the most well-explained I've yet seen), but it doesn't live up to its headline: Why *is* Bitcoin here to stay? Why is it *vital*?

  • Jayrod||

    I don't know about vital, but there would certainly be a role to play as de facto "Internet cash". I see a big market there. Honestly, the biggest thing holding it back at this point is the fear because few people really understand how it works. Few people are willing to try it because of that, so it stays smaller and more volatile. Which is why Bitcoin will never endanger the dollar.

  • Avery56||

    my neighbor's half-sister makes $78 an hour on the laptop. She has been fired for 9 months but last month her payment was $19030 just working on the laptop for a few hours. Here's the site to read more http://www.wow92.com

  • WomSom||

    BitCoin reminds me a LOT of E-Gold. I lost a LOT of money when the US Government shut down E-Gold, several years later the cash is still pending!


  • lucien||

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  • hannah65||

    as Francis responded I'm shocked that you able to earn 4615 in 1 month on the computer. did you see this page http://www.wow92.com

  • obd2works||

    thank you for your sharing

  • obd2works||

  • TomRogers39||

    LvMI refutes the validity and staying power of Bitcoins - http://mises.org/daily/6411/The-Bitcoin-Money-Myth

  • andrew79||

    Start working at home with Google! It’s by-far the best job Ive had. Last Wednesday I got a brand new BMW since getting a check for $6474 this - 4 weeks past. I began this 8-months ago and immediately was bringin home at least $77 per hour. I work through this link, Mojo50.com

  • caroljonathan||

    what Annie said I'm in shock that people can get paid $6982 in a few weeks on the . have you read this site

  • lizmy||

    I have found that there was a nice shop online last time,the Jordan High Heels and Nike High Heels is so nice and price is cheaper.have you know that?
    Nike High Heels

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