Is Bitcoin the Future?

We ought to harness the unique features of bitcoin to serve us more completely than traditional currencies have done in the past.

In January, I had the extraordinary privilege of attending the 2017 North American Bitcoin Conference in Miami. Among the many engaging speakers at the event was John McAfee, who was a 2016 Libertarian presidential contender and was the original founder of the well-known McAfee antivirus software. (Mr. McAfee is now the CEO of MGT Capital Investments). Mr. McAfee provided a conflicting message at the conference: bitcoin is user-unfriendly, confusing, and to a certain degree, vulnerable to cyberattacks such as keystroke or screen-logging spyware that can be easily hidden on smartphones. But in order for bitcoin to be successful and become a mainstream currency of exchange, your mother has to be able to use it.

I commend Mr. McAfee for saying what so few bitcoiners have had the humility to say. Let’s have a reality check. Outside the bubble of bitcoin aficionados, the currency is mysterious to the public at large. And when it comes to money, mystery is rarely tolerated. After all, you have probably heard very little about bitcoin: the pseudo-anonymous, international crypto-currency. If you have heard about it, you have probably heard mostly the criticisms—that (1) Bitcoin is a deflationary currency, (2) it enables criminals and money launderers, (3) it cannot be used to buy practically anything you would normally buy on, say, Amazon.com, and (4) its price compared to the USD fluctuates daily.

The scariest thing is that all of these criticisms are true. However, I would argue that none of these criticisms doom the currency or detract significantly from its usefulness.

(1) After a certain number of bitcoins are created, no more can be created. Hence, as global economic growth presumably continues past this point, the value of each bitcoin will increase rapidly. This is not as drastic as it may seem because bitcoins (theoretically) can be divided in arbitrarily small fractions, but this is a real concern nonetheless.