Encyclopedia of Opinion
Question
Is Bitcoin the future?
Position‹2 of 2
No, Bitcoin isn't the future
Argument‹3 of 3

Bitcoin isn’t a currency

Bitcoin doesn't meet any of the basic criteria of a currency.

The argument

Many retail outlets that originally accepted Bitcoins have changed their minds. In a BBC poll in 2017 among ten businesses in London that began accepting Bitcoin, four had reversed their decision and another two said they still accepted it but almost never received payments in Bitcoin. The direction of travel is what matters in that finding: these were not businesses that declined to try Bitcoin, but ones that adopted it and then withdrew, having had the experience of using it. If Bitcoin cannot gain traction as a vehicle of exchange for goods, then it cannot be considered a currency. The test is not an arbitrary one. A currency is defined by the functions it performs, and the first of those is being accepted in payment; something almost nobody accepts and almost nobody spends is not doing that job, whatever else may be claimed for it. Part of the reason why Bitcoin fails as even a basic currency is that without the backing of a central bank, its value is susceptible to wild fluctuation. Instability undermines both sides of a transaction, since a seller cannot know what a price will be worth by the time it is converted, and a buyer has reason to hold rather than spend anything that may be worth more tomorrow. Additionally, it is not very liquid. It cannot be carried around in a wallet like cash, and it cannot be integrated or stored in a conventional bank account, so it sits outside the arrangements through which ordinary payments are actually made. On each test a currency has to pass - acceptance, stability, and ease of use - Bitcoin falls short.

Context

To be considered a currency and have any use or application in economic markets, a currency must be exchangeable for goods. Bitcoin isn’t.

Premises

[P1]Many retailers that once accepted Bitcoin have stopped—in a 2017 BBC poll of ten London businesses, four had reversed course and two more almost never received Bitcoin payments—so it has failed to gain traction as a means of exchange. [P2] Without central-bank backing its value swings wildly, and it is illiquid: it cannot be carried like cash or stored in a conventional bank account. [C] Because it fails as a medium of exchange and lacks stability and liquidity, Bitcoin isn't a currency and isn't the future.

Counter-arguments

Just because Bitcoin is not used in the same way as a government back currency doesn’t mean it isn’t the future. Bitcoin has a future as a store of value. In a world where coronavirus, bank collapses and corrupt governments can cause turmoil in currency and capital markets, Bitcoin could emerge as a prominent vehicle for storing capital, immune from prying government eyes, global economic shocks and individual corruption.

Rejecting the premises

[Rejecting P1] Currencies are a vehicle for storing value. Bitcoin stores value. [Rejecting P3] Therefore, Bitcoin is a currency.

Framing

A currency is something that is exchangeable for goods or services.