Bitcoin

Stossel: Is Bitcoin Better Money?

Regulators hate Facebook's proposed "Libra” currency. They may kill it. But they can't kill Bitcoin so easily.

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Facebook proposed a new digital currency called "Libra." It would be backed by several different existing currencies.

The Libra might be better than the dollar, tech reporter Naomi Brockwell and investor Peter Schiff tell John Stossel. It's easy to send online. If a government currency has a lot of inflation, Libra holders will be largely protected from that.

But politicians oppose Libra. "Why, with all of your problems, should we trust you?" one congressman asked Mark Zuckerberg in a hearing.

"They're threatened by it," Brockwell tells Stossel.

Politicians may succeed in killing Libra. Paypal, Mastercard, and other companies were going to work with Facebook on the project, but they've bailed because they're scared of regulation.

That's why it's good that Bitcoin exists, says Brockwell. Bitcoin, unlike Libra, can't be stopped so easily.

"It is the first currency we've ever seen that is decentralized," Brockwell tells Stossel.

"They can't shut it down," Stossel responds.

"Exactly. That's why it's still around, because they haven't been able to have these hearings. They haven't been able to call on the CEO of Bitcoin and say, 'You'd better cease and desist.'…There is no server to unplug. There is no company to shut down, no CEO to throw in jail, so it persists. That's really exciting."

Bitcoin is mostly safe from government because it "lives" on thousands of individuals' computers, so no government can stop it by pressuring any one company.

But investor Peter Schiff says Bitcoin is a "bubble." He recommends investing in gold.

"Gold has worked for thousands of years. Bitcoin's only been around for ten," Schiff argues. "Gold has actual value. There's a huge industry that needs gold. Jewelry…you have it in consumer electronics and aerospace and medicine."

Stossel says: "I don't presume to know which way prices will move. But I do know that it's good to have alternatives to dollars."

The views expressed in this video are solely those of John Stossel; his independent production company, Stossel Productions; and the people he interviews. The claims and opinions set forth in the video and accompanying text are not necessarily those of Reason.

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  1. Yeesh. Arguments between goldbugs and HODLrs about which piece of shit is a better currency.

    Hint: If you ain’t willing to use the thing as a medium of exchange, then it ain’t a currency.

    1. Haven’t kept up with current events in Venezuela have you?

  2. I’m so in love with Naomi. She brocks so well.

  3. Bitcoin has value.

    The value is being a currency that is backed by the faith of those that want anonymity in business transactions and the ease of 100% digital transactions.

    1. From a semantic perspective, yes, Bitcoin has a lot of value, which is why it and other cryptos still exist. From a monetary perspective, it has almost no value. People want to transact anonymously and exchange back into real currency that doesn’t have 10000% inflation based purely on speculation. Ex. USD -> Bitcoin -> USD, so long as I’m getting close to the same amt of dollars as before, it will be used.

      What I don’t trust about Bitcoin is there are days where if you were unlucky exchanging back, you could easily lose 20% on any given transaction. That cost is not worth anonymity and crypto in general would fare better if they found a means to deal with speculator and investor pressure.

    2. the faith of those that want anonymity in business transactions

      The anonymous have no faith or, alternatively, they have no faith that you can recognize. The distinction is immaterial. You want (fully digital) transactions conducted in good faith (without anonymity)? Use credit. You want transactions conducted in anonymity (without good faith)? Use cash.

      1. The blockchain cannot be manipulated. It’s a permanent record of transactions. There is no trust involved. And I’d add there is nothing anonymous about Bitcoin. Buy Monero or Cardano for that.

  4. The real problem with bit coin is that advancing technology can make it obsolete. Right now bit coins abilities to be resistance to counterfeiting and anonymity do to the high amount of computation power needed to break it. It may not be feasible right now. In the near future ( 10 to 30 years from now ) it will be, if not sooner. Leaving those who still have it then with a worthless math formula. Sure new digital currency may show up. When that happens, it will not be Bit Coin. As for gold limitations, their minimal as show by smugglers willingness to take gold or gun’s as replacement for cash.

  5. When has Peter Schiff not recommended investing in gold?

    1. Historically, gold is a lousy investment when things are going well, and a great investment when things are going down the tubes. It’s more of an insurance policy than something to plan on retiring on.

  6. I wonder if it is really possible to have money in the absence of government. Money is essentially a convenient mechanism to enable trade. With money you don’t have to bring a wheelbarrow of potatoes to the store to get a hammer and nails. But ultimately money requires faith and that faith is largely a function of the government backing the money. Much of that faith rests on the security a government provides for its money. That why counterfeiting is a significant crime. That security means people will use it widely and that adds to the convenience. Until you can have that wide spread faith you can not go to the local hardware store and get a hammer and nails with Bitcoin or Libra. So whatever the problems I sticking with dollars.

  7. Why do you have to pick one? buy some gold and some bitcoin…if THSHTF, you can try both to get things done.
    the idea that you have to pick one is silly, and if TSHTF you want to have options.

  8. Most commenters here sound like they haven’t read the bitcoin white paper.

    A common means of exchange is always an agreement of value between multiple parties. The US Dollar is an agreement at the end of a barrel of a gun. Bitcoin and other decentralized cryptocurrencies are a voluntary agreement of value based on the nature of the technology itself, and the ability to be your own bank. What if small businesses could eliminate the transaction fees associated with credit cards? What if Phillipino workers in Hong Kong could eliminate remittance fees when sending money back home to their families? Do you know how much value banks and governments steal from us? They won’t go away quietly, but they’ll have a hell of a time trying to track down every last node on the network. This all just takes time. What we are seeing today is just the tip of the iceberg. Ignore it at your peril.

    1. There may be iceberg out there and there may not. For any cryptocurrency to succeed you need faith in the currency. I am not sure you can get over that tipping point. For every great idea that succeeds there are a number that fail.

      1. the blockchain requires no trust. That’s the point. There is actaully nothing private at all about bitcoin. Every transaction is recorded for all time for anyone to see and every bitcoin is completely unique. Really, read the Bitcoin white paper

  9. “But politicians oppose Libra. “Why, with all of your problems, should we trust you?” one congressman asked Mark Zuckerberg in a hearing.”

    The thing is, it’s a fair question. Regardless of the merits of digital currencies, why would anybody in their right mind trust one associated with a company whose business model is monetizing violations of its customers’ privacy?

    Libra only makes sense if you trust FaceBook, and you only trust FaceBook if you’re an idiot.

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