Nobody seems to wonder why the world's leading economists of the era, faced with the stagflation of the 1970s, collectively recommended to move away from limited supplies of money (bimetallism, representative money
aka golden standard
et al) and towards fiat currency. Does everybody really think they were stupid or that their reasoning has been obsoleted? The core problem with those systems was not whether they were centralised or not, it was that ultimately the supply of money was fixed by the availability of the underlying asset, and decentralised
fixed supply blockchain technology such as bitcoin is solving the wrong problem. Indeed it is goddamn noxious for the economy at large to have a fixed supply of money, I wouldn't wish it on anybody: for starters, banks cannot do fractional reserve lending and are restricted to sharing out only the currency that has been deposited into their accounts by savers, driving up the cost of money (interest rates) to exorbitant rates (because, roughly, you lose the “economies of scale” inherent in wholesale banking and lending), secondly, you limit economic growth, because the lack of inflation does not mean debt-service becomes more manageable over time, and thus de-incentivise investment. The technologists that venerate bitcoin have certainly “disrupted” the financial order, but they don't realise how ignorant of economic orthodoxy their underlying assumption (that a finite, fixed amount of money) is. All these people approach money and wealth with the intuition of a zero-sum, ‘conserved’ quantity as momentum or the balance of mass are, but it's not. Wealth is not a conserved quantity: a marking an asset to market in a single transaction creating or destroying wealth for all the asset holders because the market capitalisation changes in response to the price change with a (comparatively tiny) amount of money having actually being transacted. These people are really ignorant of somebody else's field of expertise, and as usual the whole public is becoming enamoured of their muttering simply because speculative mania is setting in and driving the asset up and up in price.
You want to know what is scary? Two weeks ago my sister's former boyfriend, a private soldier that left school at sixteen, started gushing enthusiastically about bitcoin and about how he had made fifty euro on his investment over the past three weeks. I started to feel sick in the pit of my stomach and I thought of how Henry Ford called his broker and instructed him to “sell everything” when his doorman or elevator-operator (anecdotes differ in detail) started telling him about stocks in 1929.
Folks, sell everything.
EDIT: Oh heh today bitcoin crashed, again. How amusing.